Rebound of Tourism in Italy 

The Italian hotel real estate market is experiencing a strong rebound phase after the negative impact of the Covid-19 pandemic. 

Even in 2024, the hotel real estate market, following the trend started in 2023, continues to grow in the first quarter, with a 9% increase in the number of transactions compared to the same period last year. 

In fact, hotels account for €330 million in investments in Q1 2024, surpassed only by office assets, which have been revived by the end of remote work. 

The positive data are mainly driven by the solid performance of Italian art cities, particularly Rome, and the growing international demand, which is diversifying across the entire territory of the “Bel Paese”. 

The Continuous Attractiveness of Italy 

Although 2023 did not surpass the record of 97.8 million arrivals in 2019, the data highlights Italy’s constant attractiveness. 

In 2023, Italy ranked fourth in Europe with a recovery rate of 4.8% compared to the previous year. Conditions remain favourable, although the sector still has a long way to go for a full recovery and alignment with international markets. 

Dynamics of the Hotel Industry 

The penetration of hotel chains in Italy remains around 6% of the total offer, stable in absolute terms. 

Among the preferred management formulas, Management Agreements grew by over 14% in the past year, indicating a trend towards international commercial standards. This trend is further supported by the entry of prestigious international brands that are expanding their presence in Italy and prefer this contractual formula over the more classic lease. 

In the next three years, numerous new hotel projects will be realized, especially in Lombardy and Lazio, and in emerging regions such as Sardinia, Puglia, and Sicily, with a focus on the “Sun & Beach” market. 

An example for all is the Borgo Egnazia Resort in Puglia, which gained worldwide fame after the Italian G7. 

Challenges and Opportunities 

The hotel industry in Italy is rapidly evolving, shaped by new traveler behaviors and post-pandemic market dynamics. International travelers increased by 11% in terms of overnight stays and by 17% in terms of spending in 2023 compared to 2022. While domestic tourism is stable, foreign tourism is set to grow, presenting opportunities for the sector to adapt and meet travellers seeking unique experiences. 

The great challenge in the coming years will be to offer lodging formulas that are less focused on “tourist consumption” in favour of more authentic “live local” stay experiences in hotels preferably located in the historic centre of a characteristic Italian city, in direct contact with local traditions. 

The Determining Role of Hotel Chains in the Development of the Hotel Industry 

Hotel chains play a crucial role in the development of the hospitality sector in Italy and in promoting lesser-known destinations. 

The diversification of hotel brands, ranging from lifestyle to ultra-luxury, meets the needs of different market segments, increasing the attractiveness of the Italian hospitality offer. This trend is seen as an opportunity for Italian operators to improve their products and create unique and memorable experiences for travellers from around the world. 

Future Prospects 

The future of the Italian hotel industry is promising, with trends towards internationalization and investments in quality hospitality services. 

Significant events such as the Milan-Cortina 2026 Winter Olympics and investments from financial markets and the real estate sector support this positive outlook. 

The main drivers in selecting investments in the hotel sector will be related to contract formulas between property owners, increasingly represented by large institutional investors, and hotel managers: as a result, the management agreement formula will be increasingly used compared to the classic lease contract or direct property ownership. 

Additionally, the size factor will become increasingly choosy, favouring properties with significant surfaces to amortize the considerable management costs, ideally with more than 150 keys and in any case not less than 100. 

This will be a challenge for those aiming to meet the demand for a “local experience,” considering the morphological characteristics of our historic centres and the existing buildings, which are small and old in most cases. 

Tourism Trends and the future of Tourism Market 

The tourism market is set to evolve significantly, shaped by emerging trends and changing travellers’ preferences. Here are some potential developments: 

• Sustainability: With growing environmental awareness, sustainable travel will become even more central. Tourists are expected to increasingly opt for eco-friendly accommodations, low-carbon transportation options, and experiences that positively contribute to the ecosystem and local community. 

• Technological Integration: The integration of advanced technologies such as AI, VR, and IoT will enhance the travel experience, offering personalized itineraries, virtual tours, and seamless connectivity. 

• Experiential Travel: The demand for unique and engaging experiences will continue to rise. Travelers will seek activities that offer deep immersion in local cultures, cuisines, and traditions, moving away from generic tourist attractions towards more authentic and off-the-beaten-path experiences. 

• Health and Wellness Tourism Trends: The focus on health and wellness will intensify, with tourists seeking destinations that offer wellness retreats, spa experiences, outdoor activities, and culinary tours centered on healthy eating. 

• Bleisure Travel: The combination of business and leisure travel, or “bleisure,” is expected to increase, driven by remote work trends. Professionals will extend business trips for leisure purposes, seeking destinations that can cater to both productivity and relaxation. 

• Microcation and Staycation: Shorter and more frequent trips, or “microcations,” along with staycations, will become popular choices for travellers seeking quick breaks without the hassle of long-distance travel. 

• Digital Nomadism: With the rise of remote work, destinations offering “digital nomad visas” and long-term stay facilities for remote workers will attract a new wave of travellers. 

• Accessible Tourism: There will be a greater emphasis on making travel accessible to all, including people with disabilities, ensuring that accommodations, attractions, and transportation are inclusive and barrier-free. 

• Cultural and Historical Preservation: Tourism that supports the preservation of cultural and historical sites will gain traction, with more conscious tourists participating in conservation efforts and educational tours. 

• Safety and Security: In the wake of global challenges, including health crises and geopolitical tensions, tourists will prioritize destinations known for their safety, stability, and robust healthcare infrastructures. 

(Source: Horwath HTL) 

Agedi is at your disposal for any hotel properties in Italy, in the most sought-after destinations.