Christie & Co launches Italian Hotel Market Review 2024

The report highlights the contrasts and dynamics of the regional markets. Italy’s robust tourism industry is poised to offer more investment opportunities. 

THE MARKET AT A GLANCE

The report shows that Italy, the third-largest economy in the eurozone, remains a leading destination for tourists and investors alike, despite facing challenges such as slow economic growth and high public debt. Notwithstanding the tourism industry being a substantial economic contributor at 10.5% of GDP in 2023, it is forecast to grow at an aggressive 6.5% compound annual growth rate (CAGR) over the next decade, likely to be powered by leisure travel making up just over 3 out of every 4 overnight stays in 2023.

Looking at the three economic regions, the North (Valle d'Aosta, Emilia Romagna, Friuli Venezia Giulia, Liguria, Lombardy, Piedmont, Veneto and Trentino Alto Adige) contributes to more than half of all national output, while Central Italy (Tuscany, Lazio, Umbria and Marche) features a diverse economy with strong industrial, agricultural, tourism and service sectors. The South (Abruzzo, Apulia, Basilicata, Calabria, Campania, and Molise) despite its higher unemployment rate and slower economic development is experiencing a surge in tourism supported by public investment in infrastructure.

TRANSACTION VOLUME

In the first half of 2024, the Italian hotel market saw a transaction volume of over €600 million, doubling on the same period in 2023. Christie & Co completed a significant transaction involving three business hotels with a total of 535 bedrooms: The Holiday Inn Naples, My One Hotel Bologna, and Hotel Villa Ducale Parma, which have been sold to CHC Holding S.P.A.

REGIONAL PERFORMANCE

Lombardy, often referred to as the "industrial heart of Italy", is the most economically productive region, generating approximately 23% of the country’s GDP and ranking among the top five regions in Europe in GDP terms. Quite logically it also concentrates 10% of Italy's total bedroom supply, and continues to be a driving force of the hotel transactional market, accounting for over 11% of total transaction volume (€) in H1 2024 and approximately 38% in 2023 (full year).

Milan, home to several financial services and the region's capital, is widely regarded as the primary business hub of Italy and has historically been attracting significant corporate demand whilst becoming increasingly appealing to leisure travellers. On the back of the 2015 Expo, this gradual shift in demand profile underpinned hotel development and transaction activity in Milan, making it one of Italy's most attractive cities for hotel investment, with exciting new openings such as the 70-room Rocco Forte The Carlton Hotel and the 50-room Soho House due for 2026. This dynamic demand environment and evolution of the offering fuelled one of the highest RevPAR growth rates in the region, jumping by 30% between 2019 and 2023. 

Piedmont boasts a diversified economy, driven by the textile and agriculture sectors, as well as the automotive and aerospace industries. The region’s tourism industry is primarily driven by the leisure segment, thanks to extensive ski facilities and the landscape surrounding Lake Maggiore and the Langhe wine region. Turin, however, is one of Italy’s primary business travel destinations complemented by a diverse range of leisure activities and events including the Turin Film Festival, for which approximately 250,000 visitors are expected in November 2024.

With 20 million visitors annually and a 13% contribution to the region's GDP, the Lazio region boasts an active tourism economy and hotel sector, which captured approximately a fifth of Italy’s overall transaction volume over the past five years and 30% of last year's volume.

Home to approximately 10% of Italy's hotel and bedroom supply, the tourism sector holds an important role in the economy of the Veneto region. The region is the most visited in Italy capturing 16% of the country’s overnight stays, and therefore is logically one of the most prominent in terms of hotel transactions, with investors’ interest boosted by its association with Venice.

Liguria, celebrated for its scenic landscapes and maritime traditions, continues to attract visitors to its coastal communities. The wider region's hotel market is dominated by three- and four-star establishments. However, Portofino and Cinque Terre, which attract significant international demand, have long been focused on boutique luxury accommodation. These areas already include LVMH's brand Belmond and a stop on Four Seasons' yacht service across the Mediterranean Riviera. Meanwhile, the rest of the region is still developing as a hotel market. Further hotel investments and international brands' growth are expected to enhance the region's positioning.

The Tuscan hotel transaction market and new openings have typically been centred around Florence – over the past five years, approximately 70% of the region's transactions were related to the “flowering” city as suggested by its Latin name. Tourism plays an important role in the Florentine economy, with visitor numbers often exceeding the local population during the peak season.

TRENDS AND FORECASTS 

With Italy preparing for major events such as the 2025 Papal Jubilee and the 2026 Milan-Cortina Winter Olympics, the country's tourism and hotel sectors are poised for continued growth and investment.

“Despite its long history of tourism and hospitality, and consequently an advanced degree of maturity within the upscale and luxury segments, as evidenced by the numerous new internationally branded openings in key cities, there is a sizeable opportunity for further regeneration of the offering, through conversions, rebranding and new development within the economy to upper-midscale segments. This boost in investment should find a home within both established areas and the wider tourism landscape of Italy”, said Gabriele Capacci, Hotels Consultant at Christie & Co.  

Carine Bonnejean, Managing Director – Hotels at Christie & Co, commented: “Italy continues to attract significant interest from investors, operators and brands due to promising market indicators, a highly fragmented ownership structure and low international brand penetration. As investors familiarise themselves with this opportunistic market, there is growing interest in more secondary markets also demonstrating healthy fundamentals. With that in mind, we are launching this market review to share more insights across the regions of Italy and the opportunities each offers.”

To read the full Italian Hotel Market Report, click here: https://www.christie.com/italian-publication/

For further information on this press release, contact:
Jasmine Davis, Corporate Communications Manager
P: +44 7561 115179
E: jasmine.davis@christie.com