Italy braces for take-off as investors check in

The hoardings are coming down on Rome’s Via Veneto, as this once iconic street gets ready to return to the spotlight.

While tourists have traipsed for decades along the winding avenue, immortalised in Federico Fellini’s 1960 film, La Dolce Vita, the dusty, bus-lined road with dated hotels and a rotation of uninspiring restaurants has largely been a ghetto of anaglypta wallpaper and Air Mile travellers in recent years. Now, the opening of half a dozen new, five-star hotels is signalling this starlet’s return.

Launching on 17 April, InterContinental Hotels & Resorts is settling in with a new flagship, the Ambasciatori Palace. Acquired by funds controlled by Oaktree in 2018, this refurbishment project of a former hotel and erstwhile embassy library will boast 160 rooms and suites, the Scarpetta NYC restaurant, Charlies rooftop plus Anite Lounge & Bar. Over the road, Colliers Global Investors has backed the transformation of the former BNL bank into Rome’s first Rosewood, next to the future headquarter offices of Deloitte, a refurbishment project by French group Ardian. Half-way up the street, Robert de Niro’s Nobu in partnership with a local fund is six months off completion, while, down a side street, the Rome Edition, a tie-up between Marriott and Ian Schrager, is also due to open in April. Mandarin Oriental meanwhile is rumoured to be heading for a new development off Via Veneto, according to media reports, in the Villini Sallustiani, a multiple-asset site purchased from Colony Capital by Merope Asset Management 18 months ago.  

And that’s not all that is taking shape in the Eternal City. In Via del Corso, the city’s first Six Senses and the Bulgari Hotel are months away from launch. Meanwhile, in a parallel street, the Zaha Hadid designed Romeo hotel is currently a building site next to the brand new five-star, Palazzo Ripetta, an independent project that opened at Christmas. The Reuben Brothers are months into another monumental bank refurbishment in the same district with a view to opening a Corinthia hotel, while there is talk of Four Seasons coming to Piazza San Silvestro, across from the new Apple flagship store. Meanwhile, in the EUR district, the brand-new Hilton Rome Eur La Lama, backed by Italian investor Icarus, opened in the last week in February.

“It’s a special moment for Rome,” says Luca Cerretani, recently appointed head of Italy for PKF hospitality group. “There was a real lack of modern, luxury product considering the significant demand in the city. This new wave of openings is likely to bring a much higher level of service and a significant increase in ADR.”

Cerretani was promoted to his new role in January as PKF and other professional services firms look to bolster their ranks in the country. “The Rome office will be expanding,” he confirms, “as will our main office in Milan.”

PKF’s Italian peer Dils also unveiled plans in January to launch a division dedicated to hospitality and international growth, as it spearheads expansion across Europe. The new business line will be led by Roberto Galano and Leonardo Gloor and is already active in the Italian and European markets, with a view to assisting clients throughout the entire hotel life cycle.

Geographical range

What is perhaps most exciting about the new investment wave in Italy is its depth and geographical range. While Rome’s dramatic supply-demand dynamics have already attracted a host of investors, dozens more are betting on Milan and Cortina d’Ampezzo – twin host cities for the 2026 Winter Olympics. “Italy is introducing a special planning regime to allow the redevelopment of older stock to cater for the Games,” notes Alexis Pipilis of Invel, a private investment manager which recently bought an historic hotel in Cortina, Hotel Bellevue Suites & Spa, as part of its Italian expansion plans. Notes Pipilis: “We are most likely going to demolish much of the existing structure and create a highly sustainable new-build constructed out of wood.”

Italy’s strength is also its regional diversity, as Cerretani notes. “Hotels on the Costa Amalfitana came back very quickly from COVID, as did Tuscany and Puglia,” he says. Minor Hotels will be launching the Anantara Convento di Amalfi Grand Hotel in the spring, taking over at the heritage site from the NH Collection. The islands are also doing well.  Sicily, which already rebounded fiercely in summer 2022 is seeing a “White Lotus” effect, with hoteliers in Taormina anecdotally besieged with requests in the wake of the HBO hit. Luxury group LVMH has agreed a deal to manage two Sardinian resorts. Meanwhile, tourists, keen to discover the next Chiantishire, are also exploring Le Marche, Basilicata, and Umbria.

Yet while institutional capital continues to pour into the country, flanked by international flags, Italy’s hotel stock is still majority owned and run as independent operations. In Umbria, Borgo La Chiaracia is the brainchild of two local video-conferencing entrepreneurs, Eugenio Vinciguerra and Anna Ramazzotti. The majority of bookings to this five-star resort and spa, which fully launched post-pandemic, are made directly, despite around half of its guests coming from overseas. “We’re expecting a very good year,” says Ramazzotti, “between leisure tourism and conferences.”

Invel is one firm which sees opportunity in this dynamic. “Italy and Greece are probably still the European markets with the lowest number of flagged hotels. We believe that there is an opportunity to change that narrative and introduce many more third-party brands, typically through franchise agreements,” says Pipilis.

While hospitality comes easy to the Italians, the country may still need to work on its reputation for sustainability. In the European Parliament, the country has fiercely resisted mandatory emissions targets for real estate, fearing an expensive day of reckoning for much of its poorly aging stock. The vote at European level on February 9 over the Energy Performance of Buildings Directive (EPBD) saw Forza Italia, Silvio Berlusconi’s party, withdraw its support for the green bill, although a compromise version of the regulation eventually passed. While all new builds are expected to have zero emissions from 2028, the use of gas boilers will no longer be phased out by 2026, but instead see their use tapered to 2035 or potentially 2040.

Still, much of this will be small change for the slate of brand new, upscale hotels coming to Italy, largely funded by international investors with their own ESG targets. Next year, The Social Hub Rome, formerly The Student Hotel, will mark one of the city’s greenest launches, transforming a brownfield railway yard, backed by €145 million of social and environmental impact financing from Unicredit. The forward-looking project is unlikely to be the city’s last.