The covid19 pandemic has had an impact on a number of aspects of our society, primarily on the healthcare system and the economy, but also on the hospitality industry. This situation has affected many countries but especially the ones whose economy is greatly dependent on tourism, such as Italy.
Nevertheless, assets in the hotel industry remain attractive and there are a number of opportunities for real estate investments especially in cities like Venice, Milan, Florence and Rome. Some examples are represented by the French group Covivio which purchased seven hotels in Italy in September for €573m, or the New York hedge fund Elliott Management which sold the well-known hotel Bauer in Venice to the Austrian real estate group Signa. According to a number of Italian hotel owners, international speculators are taking advantage of the lack of government intervention to purchase hotels at very low prices. This was the case for Compagnia Italiana Grandi Alberghi, for instance, which owned the country’s biggest hotels in Venice, Rome and Milan and was sold to the US hotel group Sheraton International in 1995, following a painful debt restructuring.
In order to promote investment in the hospitality sector, the state-backed investor Cassa Depositi e Prestiti, the biggest institutional hotel owner in Italy, has launched a €2bn real estate fund to take over the properties while leaving the management to the former owners with the aim of selling them back to them after 10 years. But even if this opportunity may seem advantageous, some investors believe this cannot be a long-term solution. According to Paolo Barletta, chief executive of Gruppo Barletta, Italy needs international luxury hotel brands that can bring affluent tourists to the country. As a matter of fact, together with Nicola Bulgari (Bulgari’s founder’s grandson), Mr. Barletta has recently launched Arsenale, a company that will focus on purchasing and renovating hotels in leading Italian tourist destinations that will be run by international hospitality brands.
Will this crisis be an opportunity for change? What is the outlook for the Italian hospitality system? While these questions remain unanswered one thing is certain: the Italian hospitality system will need to rethink strategies for post-covid development and revenue management.