Southern Europe

Investors comb the Italian market for new opportunities

Between 17 and 18 October, senior representatives from across the hospitality industry will head to Rome for the Italian Hotel Investment Conference (ITHIC).

Last year’s speakers included: Charlie MacGregor, CEO of The Social Hub; Manfredi Lefebvre D’Ovidio, Executive Chairman of Abercrombie & Kent; and William Heinecke, founder & Chairman of Minor International. 

The following story is part of a series aimed at bringing you a flavour of the conversations you can expect on stage, highlighting some of the big-picture trends and themes ahead of the event.

Please keep an eye our for more Italian-focussed content and stay tuned for further announcements of this year's speaker line-up.

When the 111th edition of the Tour de France departs from Florence on 29 June it will mark a historic first for the cycle race – and for Italy – bringing tens of thousands of additional tourists to Tuscany. In Rome, hoteliers and tour operators are already gearing up for the Papal Jubilee in 2025, forecast to attract some 32 million pilgrims over the year. Meanwhile, deadlines are looming for infrastructure developments in Milan and Cortina, who as joint hosts of the Winter Olympics 2026, are expecting a new wave of sporting tourism.  

Yet Dario Leone, head of hospitality and leisure at Savills Italy, suggests that these events are likely to just be the “cherry on the cake” of an already buzzing hospitality industry. “With the exception of Expo 2015 – which transformed Milan, and therefore Italy – events don’t always create a noticeable boost,” he says. “The story behind Italy’s current hospitality boom is one where both tourism and real estate are performing incredibly well.”

He adds: “They don’t always go together. For example, during the pandemic, occupancy plummeted but hotel capital markets held up well as investors saw the potential in hospitality. Today, we have both.”

In the first quarter of 2024, Italian hotels have already registered around €215 million of transactions, a rise of 38 per cent year-on-year, according to Savills data. And that is on top of a very impressive 2023 when the investment market both strengthened and deepened.

More granularity

Italian hotel investment volumes in 2023 reached €1.6 billion, with some 10,000 rooms transacted, according to data from EY. Although deals were slightly below the record year of 2019, the volumes were respectable considering macroeconomic headwinds which have dampened real estate transactions across the board. Despite issues including inflation and interest rates, the final quarter of 2023 saw deals surge as some 58 per cent of the total year was transacted in just three months.

The transactions data also shows that the market is increasingly granular, with smaller deals taking place in secondary and regional markets, a sign of further maturity. Accordingly, 2023 registered a mix of resort deals – such as the Pellicano Hotels portfolio and the Grand Hotel Gardone on the shores of Lake Garda – as well as value-add transactions involving conversions and refurbishments. Core investments still took the lion’s share of dealmaking, including the acquisition of the Six Senses in Rome by Italy’s Gruppo Statuto and the deal for Il Sereno on Lake Como by Denver, Colorado-based private-equity firm KSL Capital Partners.

Hospitality Investor is a partner for the upcoming Italian Hospitality Investment Conference (ITHIC). The event takes place in Rome between 17 and 18 October. You can buy tickets here.

“Investors in Italy have moved beyond the big four markets of Rome, Milan, Venice and Florence and are looking at both regional and secondary markets, as well as diversifying in terms of asset type,” Leone notes.

The data shows that Rome remained investors preferred destination in 2023, with €412 million transacted in the Italian capital. This was followed by Milan, Florence and Venice. Yet secondary and regional cities increased their appeal for investors, accounting for 16% of the total volumes. These destinations included Sardinia, Lake Como, Lake Garda and the Tuscan Riviera, namely Forte dei Marmi.

International flags

With overseas capital increasingly prevalent, major international flags have followed too. Hyatt Hotels Corporation will debut its Thompson brand in the Italian capital later this year with the Thompson Rome in a downtown location near the Capitoline Hill, while Hilton will launch its first LXR Hotels & Resorts property in the refurbished Grand Hotel Gardone in 2026.

Finally, IHG Hotels & Resorts recently announced that its first Kimpton Hotels & Restaurants property in Italy will open in Taormina, Sicily. Slated for the second half of 2025, the deal represents a management agreement with partner Società Turistica Alberghiera Taorminese. The move follows six other luxury and lifestyle openings and signings by IHG in the country in 2023, including the Six Senses in Rome, the InterContinental Rome Ambasciatori Palace and Hotel Indigo Florence. Two further Hotel Indigo properties are due to open in Turin and Trieste over the coming years, as well as IHG’s first Vignette Collection property, Hotel Alexandra, in Rome in 2025.

In May, Leonardo Hotels acquired the Hotel Cicerone Rome from Banco BPM for around €70 mln, with a view to reopening the property as NYX Hotel Rome by Leonardo after a comprehensive renovation. That will mark Leonardo’s second hotel in Rome and seventh in Italy.

Italian investors

While overseas buyers are busy combing the market, Italian investors are keen to keep pace with their cross-border rivals.

Italy’s Gruppo Statuto continues to be a conspicuous player. Apart from buying the new Six Senses in Rome last year and backing the launch of the first Six Senses in Milan, Statuto is in the midst of redeveloping Palazzo del Toro in Milan’s Piazza San Babila. 

The group is also working on a raft of other luxury hotels in Italy, including a new Mandarin Oriental in Sardinia’s Porto Cervo set to open in 2026. This will launch after the conversion of the 4-star Hotel Le Ginestre, which Statuto acquired in 2022 through its Slhre Fin 1 entity. The firm is also overseeing the transformation of one of its longest held properties, Venice’s Hotel Danieli, into a Four Seasons, expected in 2025. Meanwhile, Rosewood Hotels & Resorts has signed with Statuto to debut Rosewood Mian in 2025, with 70 rooms, including some 20 suites.

Another powerful Italian real estate group eyeing the domestic hotel market is Coima, the Milan-headquartered investor behind major regeneration schemes in the northern city, including the Porta Nuova office district and Porta Romana, where it has developed the Olympic Village for the upcoming Winter Olympics. While legacy plans for the Olympic Village will see the athlete accommodation turned into student housing, the group has been acquiring hotels in Milan and overseeing the renovation of Venice’s Hotel Des Bains, one of three Lido properties it owns. In May, Coima pounced on three trophy office assets in Rome – one of which is used by the Italian Prime Minister – but Coima CEO Manfredi Catella said that assets also had long-term appeal as “hospitality or luxury residential schemes in the future”. He added that Coima was exploring the creation of an Italian luxury hotel operator to compete with overseas operators.

Luxury continues to prove popular in the investment stakes – last year transactions in the 5-star sector accounted for 43 per cent of investment volumes, despite representing only 7 per cent of rooms. This week, French private equity firm Extendam pounced on the Soiftel Rome Villa Borghese as part of its pan-European luxury strategy. And others are likely to follow, Leone confirms. “The luxury sector is itself layered, so there is room for a range of hotel types,” he notes. “There are just a handful of ultra-luxury properties and upper upscale, charging over €1,000 per night, but upscale 5 stars in the €700-€800 range attract an even broader clientele and are performing strongly in key markets.”

To book your ticket for ITHIC, go here

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