The penetration of budget hotel chains is still contained in Italy also due to the wide spread of small independent hotels, often family-run. In my opinion, there is a high potential for the budget chains in Italy and the fast increasing of B&B, holiday homes and atypical accommodation is symptomatic of a strong interest and a need for many customers, looking for services with a good quality (no frills). HTMG (Hotel & Tourism Management Group) has been running a network of budget accommodation (B&B, little hotels, Guest houses and so on) for two-year, and I was able to verify the high degree of preference by many tourists.
Today, for example, the business customer appreciates budget hotel for a good value-for-money. With the international crisis and the consequent slowdown in the economy, companies have become more attentive to travel expenses and, therefore, to value-for-money. Initially, small media companies were the first to book rooms in mid-range hotels, but today big companies also look more closely at their budgets. The services field is surely the most "sensitive" one, in particular banking and insurance and information technology.
The hotels in Italy is still inadequate in terms of organisation structure and dimensions, energy facilities and services offered, compared to the world average, although a good process of upgrading has been started in recent years. This problem, together with the high impact of property taxes, sometimes discourages investment in the Italian hotel industry.
Today we have different gross returns in relation to typology: trophy asset from 5% to 5.5%, prime locations in Rome, Florence, Milan and Venice from 5.5% to 6.5%. A 46% of hotels in Italy and 43% of the beds belong to the category of 3 stars. 40.6% of the hotels are medium size and have a number of rooms between 25 and 99; 55% have less than 24 rooms.
The tourism field represents 11% of the Italian gross national income. In the last 10 years, incoming in Italy grew by 32.2%. Italy is ranked fifth in the world, representing 4.3% of the international movement. An increase of about 5% is expected for the next 2018.
The Federalberghi calculates that these are the characteristics of a three-star hotel in Italy, with 36 rooms and 74 seats:
• 12.6 employees per hotel;
• 1 person every 2,86 rooms;
• Cost per employee, 25,000 euros per year;
• Revenue per employee, 55,000 euros per year;
• Revenue per room per year, € 20,000 per year;
• Average overnight stay rate, 50 euros;
• Overnights represent 58% of revenue;
• Food & beverage represents 30.4% of revenue;
• Other services represents 11.6% of revenue;
Italy is among the most sought after destinations by tourists from all continents. This success has many factors, including the uniqueness of art cities and the immense cultural heritage, in a context of natural resources and scenic landscapes of great beauty. Alongside these values, our lifestyle and high quality food and wine products contribute decisively to make our country particularly attractive and well-known in the world.
In few words:
1. tourist vocation: seas, mountains, spas, a huge cultural offer based on innumerable and important sites of world interest
2. offer accomodation: hotels, campsites, villages, apartments, B&B excursions, amusements and especially food and wine.
3. Staff: courtesy, hospitality, efficiency, professionalism.
In Italy, the phenomenon of chains has not yet been fully established, today the most famous hotel indipendent chain is the Best Western. In my opinion, the causes of the lack of interest are mainly due to these factors.
- high affiliate costs together with royalties to be paid
- the strong individualism of most of the owners who in large proportion do not come directly from the hotel industry but from other sectors such as building business. Most of them see the hotel as a tangible asset and do not apply in the start up phase, the right steps (promotion and marketing to the right “clusters”, continuous training of staff, application of revenue management)
However, In my past experiences and during my current work as hotel consultant, during project presentation and revenue forecasts it is important to explain to owners, the project development, relative times of application and expected results, they must be "formed" in a few words. Concluding, it’s possible that the owners may be interested but it all depends by the minimum business guaranteed, It’s very important in this step to present the project in a best way.