Something is moving in Italy’s travel-and-tourism sector

Despite widespread insatisfaction about Italy’s economic trends, one sector is burning as bright as a campfire on the beach.
Tourism appears to be outpacing the national gross domestic product. This happy trend began at the outset of 2016. In the first quarter, hotels recorded a 5.3 percent annual growth in visitors. Anecdotal reports suggest that Italian hotels saw a 10 percent jump in bookings over the summer. Official data has yet to be made available but all signs are that tourism is expanding at five times Italy’s real GDP.

“It was a summer of growth,” says Gianfranco Battisti, the head of the Federturismo branch of the Confindustria business association.
The strong hotel occupancy data also shows that Italian visitors are expanding even faster than foreign ones. Vibrant domestic travel and leisure flows suggest an attractive product and offer more resilient support for prospective investments in the sector. In fact, the lower share of hotel rooms taken by residents actually makes Italy a bit more like France and Germany and less like Spain or Greece.

There are other incipient signs that, amid a still-weak general economic backdrop, many Italians are exploiting their proximity to cultural wonders that have brought visitors to the country for centuries, as well as a countryside remarkable for its resilience and diversity – as reflected in many local trattoria menus.

Preliminary data from Autostrade per l’Italia show a 2.9 percent increase in kilometres driven along the highway network this summer compared to the last one, maintaining a trend that has lasted throughout the year.

While road traffic is commonly a leading indicator for economic growth, it appears in this case that it is telling a different story: people are keen on exploring Italy, especially its own citizens

To be sure, some of Italy’s gains are the reverse side of the woes experienced by Egypt, Tunisia and Turkey, whose Mediterranean beaches have lost some of their appeal due to recent terror attacks. But it appears there is a deeper drive, one that has everything to do with exploring what Autostrade’s marketing campaign aptly describes as a “marvellous country.”

Take Basilicata. One of the more obscure regions, it has seen breakneck growth in tourism. While it is nearly dead last in the national rankings for tourism, it is far and away the winner for growth, with an annual jump of 15 percent – and a more impressive 25 percent jump in tourist presences, suggesting people are staying for longer.

It’s the territory

There are further signs that Italy’s tourism sector is benefiting from renewed interest in the local.

Experts at the Vinitaly wine fair this summer noted tourists are spending record amounts on food and wine in the Bel Paese. Revenue from that should amount to EUR12 billion for the summer season alone, according to Coldiretti, an agricultural association. Its poll found that shopping for local culinary delicacies has become more popular than shopping for luxury goods and fashion accessories.

Actual tourism flows are probably higher, given that Federalberghi, the hoteliers’ association, can’t keep tabs on the growing popularity of private informal rental arrangements such as those found on the AirBnB portal.

According to national statistics agency Istat, there are 177,865 homes available to rent for short holiday stays in Italy on AirBnB. That’s five times the number of registered hotels.

Something is definitely cooking as there has been a 9.3 percent jump in visitors to Italy’s state-run museums, monuments and archaeological areas so far this year. Ticket receipts have risen by even more, 16 percent, according to the Culture Ministry.

Robust domestic tourism flows are a key driver of the sector, as it allows investments to cater to a perennial base even as it expands to attract the volatile desires and spending capacity of foreigners.

On that front, Italy is well served by its role as a magnet for vacationers from Germany, home to more than one in four of all foreign visitors to Italy – more than French, British and Americans combined.

But the penchant for local quality could, if governed and marketed well, provide an extra fillip to visitors from further afield. Chinese overseas tourists should double by 2025, to a whopping 250 million, according to a recent benchmark report on the subject by Goldman Sachs. These will not only be fairly affluent but a hefty two-thirds of them will likely be millennials under 35 years of age.

Facilitating visits is key to attracting Chinese tourists, many of whom struggle to visit closer Asian countries due to visa requirements. But successfully conveying the “marvellous country” – starting with hassle-free logistics and culminating with zero-kilometer prosciutto served with local wine - will prove just as important.

Ultimately, that is not dissimilar to what Italians want, especially given youth have somewhat tighter budgets and easy access to last-minute lower-cost options.

Mediterranean: the northern rim

For now, and presumably for a long time, Europe will be the premier destination for international tourists, accounting for more than half of the entire world’s cross-border leisure visits, according to the World Tourism Organisation.

As to where those tourists go, Eurostat’s updated map is instructive. Darker blue areas have five times the tourist draw as the lightest blue ones. While France’s Atlantic coast is impressive, the arc from Barcelona to Naples – nudging up into the Alps – is clearly the prime destination of choice. A must-add to the list is Croatia’s coastal region, which is one of the continent’s top five tourist recipients.

The Mediterranean has clearly kept its allure and its pleasant landscapes outshine even metropolitan superpowers such as London, Paris or Berlin.

That allure is an opportunity the country cannot neglect or fail to cultivate.

Atlantia has taken note, evidently, and is making some key strategic steps. In September 2016, it took a financial investment (21 percent stake) in SAVE, the operator of Venice’s Marco Polo airport, home to the premier landing slot of the Adriatic’s queen city – not to mention an ideal hub to serve Croatia. SAVE also has key stakes in the airports of Verona and Brescia, as well as Ryanair favorites Treviso and Charleroi in Brussels.
On the other side of Italy, Atlantia – acting with Aeroporti di Roma and EDF Invest, an arm of France’s electricity giant as partners -  in July was selected as preferred bidder from the French Government to take a 60 percent stake in the Nice-Cote d’Azur airport, the third-largest in France with 12 million passengers a year and intriguing growth prospects as it sits at the heart of Europe’s most true-blue areas.