Hotel Intelligence Florence 2013
Hotels & Hospitality
Considered one of the most beautiful cities in the world, hotel trading
in Florence remained surprisingly robust throughout 2012 despite
Italy’s on-going economic difficulties. After a solid rise in occupancy
levels in the first seven months of 2013, the Florence hotel market is
expected to continue improving throughout the year, supported by
increasing demand from the BRIC nations.
2 Hotel Intelligence: Florence
Contributors Table of Contents Market Snapshot Overall tourism demand contracted while international tourism peaked in 2012 Strong overall growth at Venice airports in 2012 International meetings grow in Venice in 2012 International tourism expected to fuel growth in 2013 Stable hotel supply in the city driven by boutique hotels Subdued growth in hotel trading performance in 2012, growth expected for 2013 Notable growth expected in the short term
Alexander French Research Assistant, EMEA [email protected]
Sara Ferrajoli Associate, Italy [email protected]
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Hotel Intelligence: Florence 3
Market Snapshot
Tourism: The tourism market in Florence is heavily dependent
on international leisure visitors, who accounted for 77% of total
bed nights in 2012. Tourism demand to the city achieved
significant growth rates in 2010 and 2011, reaching an all-time
peak of almost 6.4 million overnight stays by the end of 2011.
Results in 2012 were less promising, driven by a reduction in
domestic demand due to the continued weakness of the Italian
and European economies. Demand for upscale hotels reported
positive growth, whereas a reduction was recorded in the
number of bed nights to lower tier hotels.
Supply: At March 2013, the graded hotel supply in Florence
comprised 378 hotels, offering a total of about 14,100 guest
rooms, which is in line with the previous year. The majority of
hotels are concentrated in the 3 and 4-star segments,
accounting for approximately 80% of all graded hotel rooms in
the city. In light of very tight planning regulations, hotel supply
is not expected to increase significantly in the foreseeable
future.
Trading: Florence’s hotel market recovered quickly from the
dip in performance in 2008 and 2009, and hoteliers reported an
impressive 10.2% growth in revenue per available room
(RevPAR) by the end of 2010. In 2011 trading performance
remained very robust, with hoteliers posting a further 16.1%
appreciation in RevPAR, one of the highest growth rates in
Italy. Performance remained stable in 2012, with RevPAR
substantially unchanged (−0.7%) compared to the previous
year, as a result of a slight decrease in both occupancy and
average daily rate (ADR). In spite of the euro crisis, hoteliers
saw a further growth in performance at year-to-date May 2013,
driven by a rise in occupancy of 8.5%.
4 Hotel Intelligence: Florence
Florence remains a key leisure destination
Birthplace of the Italian Renaissance, Florence was the most
important city in Europe for around 250 years. Florence is
considered a cultural, artistic and architectural gem, and it
contains a high concentration of works of art for the size of the
city.
Florence has been an international tourism demand generator
for centuries and is heavily dependent on international leisure
tourism, which is concentrated between April and September.
2011 proved to be a record year for the city in terms of arrivals
and overnight stays, with annual growth of 5.0% and 7.0%,
respectively. This was driven by a strong growth from the
international markets, although a solid result was also
recorded for the domestic component, especially in the first 9
months of the year.
At year-to-date March 2013, domestic demand had weakened
further, whereas international arrivals and bed nights reported
positive results compared to the same period in 2012.
International demand accounted for around 77% of all bed
nights in 2012, in line with its market share in 2010 and 2011.
Florence’s major foreign source markets include the USA,
Japan, Spain, the UK and France. In recent years, demand
from Brazil, Russia and China has been increasing
considerably.
Source: Provincia di Firenze
Florence: Tourism Trends
2005 2006 2007 2008 2009 2010 2011 2012
CAAG 2005–12
(%)
Visitor Arrivals (000s)
Domestic 680 691 710 699 698 733 729 726 0.9
International 1,616 1,714 1,755 1,588 1,498 1,862 1,995 2,019 3.2
Total 2,296 2,405 2,465 2,287 2,196 2,594 2,724 2,745 2.6
Growth p.a. (%) 8.4 4.7 2.5 -7.2 -4.0 18.1 5.0 0.8
Bed Nights (000s)
Domestic 1,422 1,510 1,461 1,432 1,475 1,457 1,498 1,480 0.6
International 4,060 4,187 4,275 3,961 3,765 4,546 4,926 4,883 2.7
Total 5,482 5,697 5,736 5,393 5,240 6,002 6,424 6,364 2.2
Growth p.a. (%) 2.4 3.9 0.7 -6.0 -2.8 14.5 7.0 -0.9
Source: Provincia di Firenze
Florence: Tourism Demand
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
0
500
1,000
1,500
2,000
2,500
3,000
2005 2006 2007 2008 2009 2010 2011 2012
Bed
Nig
hts
(000
s)
Arr
ival
s (0
00s)
Visitor Arrivals Bed Nights
0 200 400 600 800 1,000 1,200
USA
Spain
France
Japan
UK
Germany
Russia
Brazil
Bed Nights 000'sVisitor Origin 2012
Florence: Top Feeder Markets 2012 vs. 2011
Source: Provincia di Firenze
Hotel Intelligence: Florence 5
Pisa’s Galileo Galilei international airport is considered the
major Tuscan airport due to the size of its runways, which
enable large long-haul carriers to land. Pisa’s airport is located
80 km from Florence and handles the majority of the low-cost
and international air traffic in the region. The airport is served
by 17 airlines, offering flight connections to 78 national and
international destinations. A handful of European and
domestic flights serve Florence’s smaller Amerigo Vespucci
airport, situated just northeast of the city, close to the A1 and
A11 motorways, in the rapidly developing commercial and
industrial district of Peretola.
During the global financial crisis, total arrivals at the Florence
airports fell by only 3.1% (2009). Passenger numbers
recovered from the crisis very quickly, with a year-on-year
increase of 1.7% in 2010. In 2011, passenger activity
exceeded the previous year by 11.0%, with new record
passenger levels of 4.5 million at Pisa and 1.9 million at
Florence. International passengers recorded a robust growth
and continue to dominate passenger movements, accounting
for 71.2% of the total volume at Pisa and 78.3% at Florence in
2011.
In 2012 passenger arrivals declined by 1.3% compared to the
previous year. The decline in volume was largely a result of
the generally weaker domestic economy, with the strongest
contraction recorded for domestic traffic at Florence airport.
Decrease in domestic passengers at
Florence airports
Located in the northern area of the city, just a few steps away
from Santa Maria Novella railway station, Florence’s trade fair
and exhibition centre comprises three distinct venues,
Fortezza da Basso, Palazzo degli Affari and Palazzo dei
Congressi, with a total covered area of 60,000 sq. m, the
largest single area being 11,300 sq. m. The exhibition area
can accommodate roughly 20,000 delegates with about 3,500
in the largest single area.
Together, the venues host a number of international fairs,
exhibitions and congresses, but their contribution to the city’s
total bed nights is currently limited compared to other cities,
such as Milan and Bologna. Major events include ‘Pitti
Immagine Uomo’, organised twice a year in January and
June, the ‘Mostra Internazionale dell’Artigianato’, dedicated to
the craft sector in April, the ‘Salone del Mobile di Firenze’ in
March and ‘DanzainFiera’ in February.
In 2012 Florence’s trade fair venues hosted 22 exhibitions and
125 congresses, resulting in 99 and 244 days of activity,
respectively.
The city also offers an additional exhibition area, the Stazione
Leopolda, which is managed by Pitti Immagine. With a
covered area of approximately 6,000 sq. m., the venue hosts
a number of corporate conventions, fashion shows,
exhibitions, fairs and musical events.
Greater efforts to position Florence as an internationally
renowned trade fair destination will support the city in
capturing corporate demand, which it is currently lacking.
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
2005 2006 2007 2008 2009 2010 2011 2012 YTDMay2012
YTDMay2013Pisa Airport Florence Airport
Source: Assaeroporti
Florence Airports: Passenger Arrivals
Trade fair and exhibition demand
As of May 2013, Pisa airport had experienced a decrease in
passenger arrivals compared to the same period in 2012,
boosted by a significant decrease in domestic passengers
(−10.0%). A strong contraction in domestic passengers was
also registered at Florence airport (−14.3%), which had been
offset by the 5.7% increase in international passengers,
resulting in a 1.8% increase compared to the same period in
2012.
6 Hotel Intelligence: Florence
Slow-down in the supply pipeline
Florence currently has 378 graded hotels with about 14,100
guest rooms. The majority of hotels are concentrated in the 3
and 4-star segments, accounting for approximately 80% of all
graded hotel bed stock in the city.
Over the last decade, hotel supply growth has mainly been
fuelled by an increase in the 4 and 5 star segments, recording
a compound annual average growth (CAAG) rate of 5.5%,
whilst the number of rooms below 3 star has reduced by about
790 units, indicating an overall improvement in the quality of
accommodation being offered in the city.
The market is dominated by independent hotels, in line with
the rest of the Italian hotel market; however, over the years
various domestic and international operators have entered the
Florence hotel market.
Source: Jones Lang LaSalle Hotels & Hospitality
Florence: Hotel Supply (as at March 2013)
Grade Establishments Rooms % of Total
5-star 13 882 6.3%
4-star 88 6,774 48.0%
3-star 147 4,617 32.7%
Other 130 1,825 12.9%
Total 378 14,098 –
International operators such as Starwood, Rocco Forte and
Four Seasons are well represented in the 5-star segment,
whilst the 4-star segment is dominated by both international
(Hilton, Marriott, InterContinental Hotels Group, Accor and NH
Hoteles) and domestic operators (UNA Hotels & Resorts,
Starhotels, Boscolo and SINA Hotels). In 2013, the Spanish
hotel group, Room Mate Hotels, inaugurated two new hotels in
Florence city centre; the Room Mate Isabella (22 rooms) and
the Room Mate Luca (53 rooms), through the conversion of
two existing hotel properties.
Florence: Hotel Developments (as at July 2013)
Recently Opened in 2013
Hotel Name Location Rooms Grade Due Date Operator
Villa Tolomei Hotel & Resort Marignolle 31 5 star Q1 2013 Isotel Sarl/Exen Spa/ So.Ge.A srl.
Room Mate Isabella Via dei Tornabuoni – City Centre
22 4 star Q1 2013 Room Mate Hotels
Room Mate Luca City Centre 53 4 star Q2 2013 Room Mate Hotels
Total Rooms Recently Opened 106
New Developments 2014–2015
Hotel Location Rooms Grade Due Date Operator
Andaz Florence (Hyatt) City Centre 100 4-star 2014 Aled/Park Hyatt
Hotel Project Viale Belfiore Viale Belfiore 250 4-star 2015 n.a.
Hotel Project Via Pefetti Ri-casoli
Via Perfetti Ricasoli 79 4-star 2015 n.a.
Proposed – Ex Cinema Apol-lo
Via Nazionale 80 4-star n.a. Tecam
San Paolino Hotel & Resorts City Centre 100 5-star n.a. Tecam
Hotel Project Mercafir Area Mercafir n.a. n.a. n.a. n.a.
Total Rooms Proposed/Under Construction 2014–2015
600+
n.a = not available Source: Jones Lang LaSalle Hotels & Hospitality
Florence: Hotel Supply
f = forecast Source: Jones Lang LaSalle Hotels & Hospitality
12,000
12,500
13,000
13,500
14,000
14,500
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013f 2014f
Bed
roo
ms
Developments Existing
Hotel Intelligence: Florence 7
Results in 2013 anticipate growing
trading performance
The new urban planning regulations in the city of Florence
prohibit the development of new hotels in the city centre. Due
to this very tight restriction and the scarce availability of land,
hotel supply is not expected to change by a considerable
amount in the foreseeable future.
Florence is primarily a leisure destination, which had
historically achieved one of Italy’s highest occupancy levels
(before 11 September 2001). However, 2001 represented the
last year in the decade with occupancy above 70%; due to the
heavy reliance of the city on international demand, overall
trading suffered greatly during the period post-9/11 and again
during the recent global economic downturn (2008 and 2009).
Trading performance recovered quickly in 2010, however, with
occupancy and ADR rising by 8.0% and 2.0% respectively.
Growth in hotel performance continued into 2011, driven by a
further improvement of 8.9% in occupancy levels and 6.6% in
ADR, posting an impressive double-digit growth rate of 16.1%
in RevPAR, one of the highest increases in Italy.
Hotel performance at year-end 2012 remained stable, with
RevPAR substantially unchanged (-0.7%) compared to 2011,
as a result of a slight decrease in both occupancy and ADR.
At year-to-date July 2013, hoteliers in Florence had enjoyed a
rebound in performance, with occupancy rising by 7.4%,
whereas room rates remained substantially unchanged
compared to the same period in 2012.
Note: Selection of 4 to 5 star hotels Source: STR Global
Florence: Hotel Trading Performance
2005 2006 2007 2008 2009 2010 2011 2012
Occupancy (%) 67.1 68.0 67.4 58.0 55.0 59.4 64.7 64.4
ADR (€) 209.3 219.8 224.2 215.0 199.6 203.6 217.1 216.4
RevPAR (€) 140.5 149.4 151.1 124.6 109.8 120.9 140.5 139.4
RevPAR growth (%) 0.1 6.3 1.2 -17.6 -11.9 10.2 16.1 -0.7
Inflation (%) 2.0 2.5 2.0 3.3 0.8 1.6 2.8 2.3
ADR 2012 values (€) 243.4 249.4 257.7 231.5 213.2 214.1 222.1 216.4
RevPAR 2012 values (€) 163.3 169.5 168.2 134.2 117.3 127.2 143.7 139.4
The table below shows that average occupancy has been
slightly lower in the last 5 years than over the last 10 years.
However, performance results in terms of average room rates
are almost in line over both periods analysed, indicating that
hoteliers have recently managed to recover room rate levels.
Florence Trading Growth Rates
2003–12 2008–12
Occupancy (%) 63.6 60.3
ADR CAAG (%, 2012 values) -1.8 -1.7
RevPAR CAAG (%, 2012 values) -1.7 1.0
Source: STR Global
Florence Year-to-Date Trading
July 2012 2013 Change (%)
Occupancy (%) 63.7 68.5 7.4
ADR (€) 224.7 224.4 -0.1
RevPAR (€) 143.2 153.6 7.3
Source: STR Global
Source: STR Global
Florence: Quality Hotel Trading
0%
20%
40%
60%
80%
100%
0
50
100
150
200
250
300
2005 2006 2007 2008 2009 2010 2011 2012
Occ
up
ancy
€(2
012
valu
es)
ADR 2012 values (€) RevPAR 2012 values (€) Occupancy
8 Hotel Intelligence: Florence
International demand should assist
hotel performance in 2013
Florence tends to have a seasonal performance, with room yield peaks during spring and autumn and lower rates during the summer months.
Source: STR Global
Florence Quality Hotels: Room Yield Seasonality
0
50
100
150
200
250
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
€
2010 2011 2012
Florence is considered one of the most beautiful cities in the
world due to its vast array of monuments, architecture, art
galleries and museums, which together make the city an
internationally renowned destination. The city’s hotel industry
has seen a strong recovery since the economic crisis of 2008
and 2009. Hotels have increased their RevPAR significantly
since then, boosted by an improvement in domestic and
international demand. Following a positive performance in
2011, with growth in tourism demand reflected in increases in
occupancy rates, hotel performance in 2012 remained largely
stable.
The Florence hotel market is expected to improve in 2013, as
highlighted by the significant increase in occupancy rates in
the first 7 months of the year. The combined effect of limited
new supply in the historic centre and Florence’s strong
reliance on international demand, including increasing
demand from the BRIC countries (Brazil, Russia, India and
China), should assist the long-term trading fundamentals of
the city.
Hotel Intelligence: Florence
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10 Hotel Intelligence: Florence
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