The third ‘Hospitality Forum 2021 - System Italy’ also attended by Riccardo Serrini: “The hotel market has to take advantage of the enormous changes triggered by the pandemic to deal with the structural problems underlying size and supply that have always hampered the sector”
July 8, 2021
Tourism is one of the industries hardest hit by the Covid-19 pandemic. Worldwide, it reported a loss of 1,300 billion dollars in 2020, eleven times larger than the 2009 financial crisis. A fifty-year process of uninterrupted growth has stalled, but will pick up again quickly because people want to travel and tourist operators want to innovate. These points were highlighted during the third ‘Hospitality Forum 2021 - System Italy’ organized in Milan on July 8 by Castello Sgr and Scenari Immobiliari.
In Italy, the crisis fueled by the pandemic has cost the tourism sector 28 billion euro, or 1.5 points of the country's domestic wealth. Around 90,000 jobs have been lost, notably among women. Italy's art cities have been particularly affected. The number of foreign visitors has fallen by more than two thirds. Scenari Immobiliari opened the forum by presenting the 2021 Report on the hotel property market: at European level, the market hit the lowest levels of the century in 2020, with transactions of 12 billion euro (down 68 per cent from the previous year). A recovery is underway and should take sales up to nineteen billion euro by the end of the year. The 2019 record of forty billion euro will only be beaten in 2023.
Castello SGR Chairman Francesco Canzonieri observed: “The hospitality sector has huge strategic importance for Italy and one of the factors in the country's recovery is necessarily the ability to attract the leisure public as well as business travelers. In recent months we have redoubled our efforts because we want to be ready to respond to the important challenges that lie ahead and take a key role in the new Italian renaissance. For this to happen, we expect a further boost to the system to enhance the whole of Italy, with measures to strengthen the transport infrastructure and the introduction of policies to encourage deseasonalization.”
For Prelios Group Chairman Fabrizio Palenzona, who took part in the round table moderated by Francesco Canzonieri, “international tourism was one of the sectors worst hit by the Covid-19 crisis, although encouraging signs are already beginning to emerge in 2021. As managers of Intesa Sanpaolo Unlikely to Pay credits, we have a special insight into the tourism sector. We are currently handling about 300 crises: what we are finding is that for complex situations in large cities, it is easier to find a solution agreeable to the manager, the investor and the owner. The real problems lie with small players in small towns. They need to be tackled with a new system, a new mentality that acts as an ‘accelerator’: the focus has to be on size, sustainability, quality, digitalization and accessibility. The investments of the Italian Government’s National Recovery and Resilience Plan need to target these goals too by creating a system, especially in the most deprived areas of the country where attention to tourism is nonetheless possible.” According to the Prelios chairman, “there could be NPEs for between 2 and 3 billion in the hotel sector. Often, excessive debt stems not from working capital, but from the purchase of the property, since these tend to be family-run businesses. There are also problems in management professionalism. Providing assistance in these situations, as we at Prelios do, requires skills, professionalism, commitment and care in understanding the problem, drawing up a business plan and deciding how to intervene in each specific case. There are a variety of tools, for example debt rescheduling or new finance, creation of support funds: there may also be new investors who, in turn, establish appropriate management and, when conditions are right, try to link up with large hotel chains or other potentially interested players. The goal is always to maintain close ties with the local real economy and develop ways to provide these companies with finance, so facilitating the resolution of the problem.”
After last year's lull, there has been a sharp increase in investment in the Italian hotel industry in 2021. Italy is one of the preferred choices of the major international players and Italian investors too are watching the sector with growing interest. The meeting on July 8 at Borsa Italiana was also attended by Prelios Group CEO Riccardo Serrini: “The hotel market has to take advantage of the enormous changes triggered by the pandemic to deal with the structural problems underlying size and supply that have always been a characteristic of the sector. I’m talking above all about the tens of thousands of family-run hotels unable to withstand the impact without creating new chains to pool management and services. There will be no shortage of investment opportunities, including indirect opportunities through loans. These will contribute to the growth of an industry that accounts for 13% of Italy's GDP and was reporting pre-Covid annual average growth of more than 2%.”