No attribution required
English

Italian hospitality goes far beyond simple real estate

2 MIN READApril 11, 2019
GRI Club Hospitality met in Milan on 4 April 2019 to discuss how to create value in hospitality in Italy, drawing upon perspectives from across the industry, including investors, developers, lenders, hotel operators and hotel brands. Given how broadly the term ‘hospitality’ can be defined in the first place, it may come as no surprise that the sector is rapidly converging, changing and evolving.

What is hospitality?

Efforts at agreeing an initial definition of ‘hospitality’ tended towards a broader understanding of the word, to include all forms of temporary living. Hotels are, in this sense, part of this definition as much as serviced apartments, B&B, hostels, student houses and senior housing, for example.  At the same time, participants emphasised how other asset classes are deeply influencing the hospitality sector. Hotel lobbies are becoming more and more similar to co-working spaces, with both big hotel chains and younger brands actively embracing the concept.

Global formats for globalised customers

It feels that new formats are being created on a daily basis in order to serve new market niches. Different brands offer the market ever-increasing diversification and new concepts are popping up everywhere. At the same time, these new formats need to address the global market as a whole, in order to offer continuity to customers across the globe, from Rome to Beijing. All the while, standards are losing ground to a rediscovered authenticity of local places and experiences.

The development of Italian hospitality

Whilst administrative headaches and the uncertainties of local government pose a severe limit to the expansion of international chains in the country, investors seem eager to find new opportunities; likely sub-sectors include urban hotels, resorts, hostels, student housing and serviced apartments. Potential deals face the complexity of having a number of different players sitting at the table, with equity leading the way, and sometimes struggle to meet all the requirements on the lending side. 
 
Leasing vs. management: is there a third way?

The control of both prop-co and op-co could be, for some, a way to pursue double-digit returns in the market. Many investors feel that a real estate approach is not enough anymore and that the decisive factors are the operators and their teams, more than the pipelines of new developments. Will this become an increasingly common approach to the market? 

Italy’s real estate markets and hospitality investments will be discussed further at Italia GRI 2019 on 22-23 May in Milan. Italian players active in hospitality can also meet their European counterparts at GRI Hospitality Europe 2019 on 11-12 September 2019.
Related News
←  SHARE
Real Estate
GRI
X
Privacy policy and how we use cookies
We use cookies to give you the best experience on our website.
By continuing we'll assume you're on board with our privacy police
Accept and hide this message