Hotel Market Beat 2024 H1 - Italy
Investment TrendsItalian hotel transactions exceeded €800 million in H1 2024, involving over 30 properties and nearly 4,500 rooms. This marks a 90% increase compared to H1 2023, positioning Italy as the fourth largest European market by transaction volume for the first half of 2024, behind the United Kingdom, Spain, and France. Hotel investments were primarily driven by domestic and European investors, amounting to 85% of the volumes in H1.
Photo by Cushman & Wakefield
Investment Trends
Italian hotel transactions exceeded €800 million in H1 2024, involving over 30 properties and nearly 4,500 rooms. This marks a 90% increase compared to H1 2023, positioning Italy as the fourth largest European market by transaction volume for the first half of 2024, behind the United Kingdom, Spain, and France. Hotel investments were primarily driven by domestic and European investors, amounting to 85% of the volumes in H1.
Prime Yields
Yields remained mostly stable in the first half of 2024. The European Central Bank's interest rate cut in June, coupled with improving debt liquidity, suggests further stabilization in 2024. Looking ahead to 2025, a gradual sharpening of yields for prime assets and value discovery for secondary assets and opportunistic investments is anticipated.
Market Performance
Italy recorded a robust performance in H1 2024, with RevPAR surpassing H1 2023 by 5.2%. This was driven by a 5.7% increase in ADR (+47.9% vs 2019), while the market experienced a minor decline in occupancy (-0.3 percentage points, -1.0 p.p. vs 2019). Overall, Italy experienced the second highest RevPAR in Europe, after Switzerland.
Supply Outlook
Supply growth remained mild in H1 2024 (+1.7% vs last year). Italy saw recent hotel openings, rebrandings, conversions and renovations, focusing on smaller-scale properties (<100 rooms) targeting both budget-conscious guests and luxury seekers. Notable openings were the Anglo American Florence, the Max Brown Missori in Milan, the Radisson Collection Hotel Roma Antica and the Veridia Resort in Sardinia (member of Radisson Individuals).
Demand Outlook
According to Bank of Italy data, international demand drove tourism flows during H1 2024, with 168 million bed nights recorded, representing a 4% increase relative to the same period in 2023. Meanwhile, domestic demand recorded 129 million hotel bed nights, a 9% increase compared to last year.
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