As a major tourist destination and with the bulk of hotels still running independently, Italy is a workshop for trends in hotel investment. The impact of the largest global firms is random, if not disparate, as they scramble to expand their footprint.
The glut of luxury hotels in Rome, Milan, and Florence suggests that the most prominent deals are down market, especially in the serviced-apartments and student-housing segments. Overbuilding in the ultra-premium tier spotlights a rebound from a pandemic-induced collapse in the business. Luxury hotels can take anywhere from three-to-five years to open.
The student-housing angle is noteworthy, in part because of complementary headlines. Just this month, Australia-based Macquarie announced that it was buying two student-housing platforms in Europe for a total of 12,000 beds. The spark here may be as much about social responsibility as financial prowess. Among hotel investors, stable returns can be fleeting.
The Italian South is resonating more and more with investors. One reason is the role of public grants from regional governments, defraying the costs of expansion, modernization, and renovation. Calabria, in particular, is pursuing this development model as a long-term approach to building its hospitality industry. The region has a significant under-tourism problem. ■
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Image show skyline of Oriolo, Calabria. Credit: Freesurf at Adobe Stock.