October 24, 2025

Milan Hotel Market Spotlight YE JUL 2025

The sample of branded full-service hotels* in Milan recorded a slight increase in profit during the 12 months ending in July 2025, compared to the same period last year. GOP per Available Room (GOP PAR) rose by 0.9%, driven by a 0.2% increase in revenue and supported by a 0.2% decrease in expenses.

By Davide Barbaro and Francesco Calia

Milan, Italy

OVERVIEW

The sample of branded full-service hotels* in Milan recorded a slight increase in profit during the 12 months ending in July 2025, compared to the same period last year. GOP per Available Room (GOP PAR) rose by 0.9%, driven by a 0.2% increase in revenue and supported by a 0.2% decrease in expenses.
The revenue growth was driven by the Rooms department (+0.9%) as ADR increased by 2.2%, reaching €250, compensating for the -1.3% occupancy decline to 68.4%.
F&B revenue declined to €44.3 PAR (-0.7%), albeit less than occupancy, resulting in increasing F&B revenue per occupied room (+0.6%), reaching €64.7 (POR).
The decline in expenses was driven by Cost of Sales (-€0.7 PAR) and Utilities (-€0.2 PAR).
Occupancy rates dipped primarily in August (-14.9%), September (-13.4%) and October (-7.6%) (YoY). Conversely, hotels recorded +10%, +4.5%, and +5% increases in February, April, and May 2025.
The occupancy pressure was partially caused by the opening of 11 hotels during the past 12 months (+616 rooms) and one closure (62 rooms). However, as the additional rooms represented only a +0.9% increase in annual supply (YoY), the impact was limited.
Overall, due to the declining expenses, 142% of the revenue increase flowed through to the bottom line (GOP). The profit margin improved by 0.2pp, reaching 38.8%.

*Quality hotels in the city - excluding luxury properties

SUPPLY

Over the last 12 months (YE July 2025), the Milan hotel market recorded 11 hotel openings (+616 rooms), including 10 new hotels (536 rooms) and the re-opening of Casati 18 hotel (80 rooms) in July 2025, following a complete renovation.
The new openings were partially offset by the closure of Hotel Scala (-62 rooms), with a potential reopening in 2027.
Overall, the hotel supply in Milan increased by +0.9%, compared to the same period last year (weighted by opening and closing dates).
The majority of the new room supply was within the full-service sector, with Luxury Class hotels representing 42.9%, followed by the Upscale properties accounting for 30.3%.
Most of the new hotel supply (74%) opened in the city centre of Milan between the historical part of the town and the Centrale Railway Station neighbourhood.
Furthermore, the Four Seasons (118 rooms) underwent a full renovation throughout the year without fully closing.
Going forward, the New Rocco Forte Hotel is expected to open in the city center in November 2025 (71 rooms).

PAYROLL COSTS

The labor expenses decreased by 0.2%,reaching €61.4 PAR during YE July 2025. The F&B department led the decline, where payroll dropped by €0.5 PAR (-2.2%), while the labour costs in the A&G department recorded the most notable increase (+€0.4 PAR, +4.7%).

OTHER EXPENSES (excl. Utilities)

Other expenses remained relatively stable, recording a minor €0.5 PAR increase (+1.1%) to €46.3 PAR. The departments mostly contributing to this overall increase were S&M (+€0.5 PAR) and A&G (+€0.4 PAR).

COST OF SALES

Total Cost of Sales decreased by €0.7 PAR (-3.8%), primarily in the Rooms (-€0.6 PAR) department.

UTILITY COSTS

Utility costs decreased by €0.2PAR (-1.9%), driven by a reduction in electricity expenses (-€0.4 PAR).

Markets & Performance Europe Italy Milan