Luxury developers turn to Italy

INTERNATIONAL REPORT — Under the spiraling demand of record international tourists, Italian markets are diversifying, analysts say, as resort towns gain luxury investment traction from Lake Como to Sicily and the Tuscan coast.

A record 65 million international tourists came to Italy in 2024, including 235 million overnight stays, led by visitors from the U.K., Germany and the U.S., according to the Italian National Tourist Board. That trend is expected to continue through 2025, fueling a dramatic surge in demand, investments and room rates.

Beyond Rome, there has been a notable concentration of investments in locations like Sicily, Sardinia and Turino, traditionally considered secondary markets, according to PWC’s latest Italian Market Snapshot, indicating investor interest has expanded outside the traditional hospitality markets.

Marco Zalamena

Marco Zalamena, head of hospitality at EY in Italy, agrees.

“While Rome, Venice and Milan lead the way, foreign investment is turning towards luxury resort destinations, which accounted for 39% of the total investment volume in 2024 — an 11% hike from 2023,” he said. “After record hotel investments rising 30% last year to €2.1 billion, the Italian market continues to be very attractive to investors this year. High-end properties, 4- and 5-star, dominate, representing almost 90% of total investments (45% each).” 

Half of the recent hotel transactions, Zalamena added, involved international investors — mainly global hotel operators from Europe and the Middle East. Other resort destinations seeing a lot of investment activity include Sicily (15% of the transactions) and Forte dei Marmi (11%).

Brand interest in Italy

Hilton is targeting both Sicily and Sardinia, said David Kelly, Hilton’s senior vice president for Continental Europe, and the 2024 rebranding of Mangia’s Santa Teresa Sardinia into a Curio Collection by Hilton after a €12 renovation topped off three existing properties on the island.

As we continue to expand our portfolio of resorts across Southern Europe, Italy continues to be a key strategic growth market for Hilton.

David Kelly

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“As we continue to expand our portfolio of resorts across Southern Europe, Italy continues to be a key strategic growth market for Hilton. Sardinia is a dream destination for many of the group’s loyalty program members with its incredible landscapes and hospitality … We also recently opened a hotel in Sicily under the Tapestry Collection by Hilton brand and are set to open another property there under the Curio Collection by Hilton brand in the coming weeks.”

Beyond the islands, Hilton continues to invest in Italy, said Alan Mantin, vice president of development for Southern Europe, with 109 trading and pipeline hotels.

The opening of the Canopy Milan Duomo later this year in partnership with the Roscioli Hotels Group will become Hilton’s 11th brand trading in Italy, Mantin said, “demonstrating both the strong appeal of Italy to a variety of travelers, and the continued rise in demand for lifestyle accommodation.”

With surges in visitors to Sicily, up to over 5 million in 2024, hotel investors are taking note, with local operators keen to form partnerships with international brands.

The Grand Hotel Imperiale in Moltrasio is converting to a Raffles Hotels & Resorts.

Mangia’s €250M investment

Italian resort operator Mangia’s says it has been rolling out €250 million in investments at its beachfront resorts, which are concentrated in Sicily and Sardinia, after a 40% increase in year-over-year revenue in 2023.

Mangia President and CEO Marcello Mangia said the group’s recent acquisition of the Grand Hotel et Des Palmes in Palermo was “the first step in a strategic expansion into the luxury 5-star city hotel sector, with plans to extend to other Italian cities.” He predicts the hotel will contribute to a revenue increase of 12% this year.

The entry of Raffles into the Italian market confirms the growing appetite of luxury hotel brands for this region.

Marco Zalamena

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Mangia sees strategic partnerships with hospitality brands as “essential for capturing the 5-star clientele” and international demand, which now accounts for the majority of guests.

Several of its properties have undergone upgrades and repositioning after a 2021 joint venture with Hotel Investment Partners (HIP) involving €90 million in outlays. Mangia’s Brucoli, Sicily, reopened in 2023 under Marriott’s Autograph Collection after a €27 million refurbishment.

From the southern islands to the northern lakes, “almost a third of recent resort transactions are in Lake Como and they accelerated in Q4 2024,” said Zalamena, “particularly conversion and renovation projects to develop ultra-luxury properties.”

One of those is rebranding the art nouveau villa, Grand Hotel Imperiale in Moltrasio, to a Raffles Hotels & Resorts with local developer CL Hotel scheduled to open in 2027. EY assisted in the operator selection process, said Zalamena, adding it’s just the tip of the iceberg for global investors teaming up with Italian operators on luxury resort developments.

“The entry of Raffles into the Italian market confirms the growing appetite of luxury hotel brands for this region," Zalamena said. "We will also see the opening of Ritz-Carlton, Six Senses, Belmond (LVMH), and Edition on Lake Como. Furthermore, Four Seasons is set to open in Puglia in 2027 and Mandarin Oriental in Cortina d’Ampezzo in the Dolomites (due to open in summer).”

Andrea Girolami

Andrea Girolami, CL Hotel’s principal, is also president of AG Hotels (the hospitality division of AG Group) whose acquisitions and franchise agreements are snowballing after partnering with Hyatt in 2021 to manage the Il Tornabuoni in Florence under The Unbound Collection brand (acquired by Torino, Italy-based VOIhotels as part of its V Retreats portfolio in 2023).

The group’s relationship with Hyatt continues with the late 2025 opening of the Thompson Rome by Hyatt, the second for the brand in Europe. The hotel is a conversion of the former Italian Communist Party headquarters into a luxury lifestyle hotel near the Capitoline Hill.

“The ambitious renovation marks an expanding relationship with Hyatt”, said Girolami, adding the hotel is under joint ownership with financial holding company Rossfin.

Girolami said that the group aims for a €220 million turnover from hotel activities by 2030 as it pursues expansion plans for its high-end offerings in Italy’s top destinations.

B&B Hotels’ push in Italy

While luxury investments dominate, Paris-based B&B Hotels is focusing on mid-range 3- and 4-star investments and wants to double its Italian presence by 2030, said the group’s President and CEO for Italy, Hungary and Slovenia, Liliana Comitini.

Liliana Comitini

An ambitious expansion plan across key and secondary cities and well-connected resort areas has seen a handful of openings in the past few months, from Turin to Sardinia, both new builds and conversions, lifting B&B’s Italian portfolio to 81.

“Our goal is to reach 150 hotels by 2030 that will cover the Italian territory and gain an ever wider international audience”, Comitini said. “Our strategy is... embracing a very broad target of customers from business to leisure as well as families and baby boomers, who are forever growing in the leisure sector.”

B&B opened its first property in Sardinia last October with the B&B Hotel Sassari. For Comitini, the foray into the island’s second biggest city is part of the chain’s drive into Southern Italy and the Mediterranean.

The constantly growing American market also plays a vital role in Sardinia’s hotel development, according to Franco Cuccureddu, the island’s general counselor for tourism.

At a trade show in March, he said the U.S. “is firmly the first non-European market in terms of presence. It is particularly significant in terms of spending capacity.” This has contributed to a 10% hike in hotel stays and airport traffic in Sardinia since 2023.