Italian hotels set to thrive with less red tape
 
Italian hotels set to thrive with less red tape
20 APRIL 2016 8:04 AM

With a settled government now involved in the hotel industry, the formerly sluggish sector is getting its act together, with domestic chains looking to grow. 

BERLIN—Governmental changes are making it easier for the hotel industry to thrive in Italy, sources said.

A settled government and regulatory changes that allow state-owned assets to be sold off to private bodies, as opposed to being always given out to public tender, are among the changes in the Italian market that are being hailed as positive, according to sources.

Speaking during a panel on Italy at the recent International Hotel Investment Forum held in Berlin, Italian hoteliers, consultants, lobbyists and government representatives said their country’s famous red tape is disappearing, but some challenges still remain.

On 30 March, Italian chain Starhotels, in partnership with TDA Capital Group, bought five high-end Italian properties, in Rome, Florence, Siena and Vicenza. The company owns 29 of its now 30 properties, with 27 of its hotels in Italy.

During the panel, Starhotels’ CEO Elisabetta Fabri said she believed management was the way to grow in the country.

“Things are changing. Despite challenges, Italy does offer opportunities,” Fabri said. “Labor laws are changing, and there are lots of magnificent buildings that are abandoned. You do need patience, though.”

Investors such as Lorenzo Luca Vianello, global account manager of real estate at UniCredit SpA, were open to all operating models.

“We have an appetite for (Italian) hospitality, and the banks are now selling underperforming loans from beneath hotels. What is important is cash flow (generation),” Vianello said.

Government joins in
Panelists said the Italian government is looking to sell off some key real estate, including some of the “magnificent buildings” Fabri referred to, in order to reduce public debt, according to Riccardo Pacini, real estate development manager at Agenzia del Demanio, an Italian governmental body.

“We’ve made changes, to restructure real-estate deals so that it is possible to sell to private entities, not to public tender, which is very bureaucratic. … Assets also are now on websites,” Pacini said.

Pacini added that 83% of all its assets are owned by local authorities, potentially adding to bureaucracy.

“Between 2012 and 2014 (the Italian government) sold €4 billion ($4.55 billion) of assets, with one-third of those owned by local authorities,” Pacini said.

Sunshine in Italy
Consultants say the mood is changing for the better in Italy.

Marco Malacrida, founder of Italia Hospitality and area director of Italy for Hotel News Now’s parent company STR, said, “we are entering a new era in Italy.”

Malacrida said 48.6 million tourists came to Italy in 2014. The number of luxury hotels in particular is on the rise, which he said was largely to cater to the growing number of Chinese guests. The luxury hotel count currently has pipeline that will increase the total number to 417 from 385 in 2014.

Ezio Poinelli, senior director at business consultant HVS South Europe, said market conditions make this a good time to invest in Italy but the country can still be challenging because the “structure of the sector in Italy makes it difficult for international investors.”

“No domestic chain has more than 100 hotels. In fact it is the opposite, as most of (Italy’s) 30,000 hotels are, let’s face it, artisanal,” Poinelli said.

Sources said some Italian brands could be looking for growth opportunities outside their country.

Speaking to HNN outside the panel, Heike Hoerdemann, business development manager at AllegroItalia Hotels & Resorts, said her company’s two brands—upscale AllegroItalia and budget Espressohotel—have a similar structure to Starhotels, with all of its 10 properties in Italy, apart from one in Beijing.

“All are managed by us, and we own three,” Hoerdemann said. “We’re looking to grow Espressohotel, in Germany where the Italian lifestyle, music and art sell well.”

She said her company also owns a cooking academy, which allows them to stage classes at hotels as another venture selling the Italian culture.

According to year-to-date February numbers from STR, Italy saw occupancy rise 3.7% to 51.2% from the same time period a year before, while revenue per available room and average daily rate increased across the same two periods by 6.1% to €55.20 ($62.81) and 2.3% to €107.85 ($122.68), respectively.

Milan over the same period saw RevPAR and ADR increase by 1.1% to €80.27 ($91.31) and 2.2% to €136.06 ($154.77), respectively, although occupancy declined -1.1% to 59%.

More tourist-oriented Florence, again for the same period, enjoyed RevPAR and ADR increases of 6.9% to €63.60 ($72.34) and 7.1% to €118.54 ($134.85), respectively, but also saw occupancy drop, by 0.2% to 53.6%.

No Comments

Comments that include blatant advertisements or links to products or company websites will be removed to avoid instances of spam. Also, comments that include profanity, lewdness, personal attacks, solicitations or advertising, or other similarly inappropriate or offensive comments or material will be removed from the site. You are fully responsible for the content you post. The opinions expressed in comments do not necessarily reflect the opinions of Hotel News Now or its parent company, STR and its affiliated companies. Please report any violations to our editorial staff.