Luxury hotels are driving Italy’s hotel transaction market, according to the Italy Market Outlook 2025 from Global Asset Solutions. The company reported that luxury properties made up 45% of all hotel investment volume last year, with total hotel deals reaching 2.1bn euros – 30% higher than the decade-long average.
Alex Sogno, CEO, Global Asset Solutions, said: “Italy has always been a popular destination for international travellers and recent years have seen the brands come into the market to meet this demand, in particular at the luxury level. “Rapid pipeline growth threatens to put pressure on markets such as Milan, encouraging investors to look at secondary locations and resort destinations including Taormina and Lake Como.”
Italy’s hospitality sector has demonstrated strong financial performance, with Average Daily Rates (ADR) rising by 4% in 2024 – one of the highest increases in Europe. This growth was fuelled by a combination of leisure and business travel, with projections for 2025 remaining optimistic.
Rome, Venice, and Milan continued to dominate as top investment destinations. Rome led the way with €465m in investments, followed by Venice at €353m and Milan at €173m.
Beyond these urban hubs, resort destinations such as Sicily and Forte dei Marmi emerged as key hotspots, accounting for nearly 39% of total investment volume.
International investors remained a driving force in deals, comprising 53% of total investment. European, Middle Eastern, and US buyers were particularly active, reflecting Italy’s global appeal. Hotel operators also played a significant role, accounting for 38% of investments as they increasingly sought direct acquisitions to gain greater control over assets.
Looking ahead, the market was expected to see continued yield compression for premium assets, making core investments more competitive. Italian hotels have also seen wage inflation and surging utility costs in 2023, with growing tourist demand bringing with it staffing challenges.
Sogno concluded: “Italy’s popularity is surging ahead and returns are at risk in increasingly crowded markets if owners do not ensure a rigorous view on operations.
“Engaging a specialised asset manager ensures that the profitability of a property remains the focus, even when costs and staffing issues are putting the hotel under strain. An experienced asset manager can ensure that owner and brand are aligned on the best strategy for your property.”
Tatiana Rokou
