Trends

Market Conditions Tighten For Italian Hotel Industry

Italian hoteliers reported mixed revenue per available room (RevPAR) results year to July (YTD), according to STR Global. Sicily’s Taormina & Messina market led RevPAR growth and is one of four markets to report increases year on year

STR Global
Italian hoteliers reported mixed revenue per available room (RevPAR) results year to July (YTD), according to STR Global. Sicily’s Taormina & Messina market led RevPAR growth and is one of four markets to report increases year on year.

“Whilst Italy has been working toward its economic recovery plan, hoteliers will be looking at signals of improvement, particularly with regards to stimuli for future demand growth”, said Elizabeth Randall Winkle, managing director at STR Global. “Our latest forecast for Rome and Milan predicts declining demand in the two markets for year-end 2012, which will negatively affect occupancy for the rest of the year. For 2013, occupancy is forecast to remain weak, with more positive news for average room rates. However, the market situation for the two markets and the rest of Italy remains volatile”.

Looking at the best performing markets across Italy, the seasonal market of Taormina & Messina in Sicily reported double-digit RevPAR growth (+18.4 percent) YTD. Benefiting from an earlier Easter weekend compared to the previous year, RevPAR growth was led by increased ADR (€144.24) and occupancy growth of 6.8 percent YTD.

Florence also reported RevPAR growth following ADR increases. Florence’s ADR grew from €133.94 to €143.59 YTD, leading RevPAR to increase by 4.6 percent. Naples reported occupancy improvements (+3.2 percent) YTD, and with ADR practically unchanged year on year, saw RevPAR increase by 3.3 percent YTD. Udine, the fourth market reporting RevPAR improvements, reported RevPAR growth of 1.9 percent, which was led by improving occupancy to 55.1 percent.

The top four markets, in terms of absolute RevPAR achieved, were Venice, Rome, Florence and Milan, which achieved RevPAR between €81.98 for Milan and €176.76 for Venice. In fifth place, with some distance, was Taormina & Messina with €64.33.

Declines for the Padua, Genoa and Bologna markets highlight the difficult market conditions. Padua saw occupancy decreasing for all months this year, dropping 12.3 percent YTD. Genoa, located on the Italian Riviera, reported 9.6 percent RevPAR decline YTD. Known for its seaport, the city has suffered from occupancy drop year on year (-7.7 percent). Bologna, one of Italy’s main industrial cities and trade fair hubs, saw decreasing occupancy (-4.7 percent) and ADR (-1.1 percent) YTD, resulting in a RevPAR decline of 5.7 percent.

STR Global reports on 52 markets and more than 80,000 rooms across Italy.




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