Europe -  Milan, Italy

Milan is the key commercial city in Italy, and one of the leading financial and business centres in the world. The city is home to the Italian Stock Exchange (Borsa Italiana) as well as the majority of the financial institutions and leading banks in Italy. It is also well known as a fashion capital and a world leader in design. Milan’s fashion business is based around the famous Quadrilatero della moda, in the city centre. The exhibition centre and trade fair complex, Fiera di Milano and Fiera di Rho Pero, generate significant conference and trade fair demand throughout the year. The city is serviced by two main airports, Linate (with a domestic focus) and Malpensa (with an international focus).

Expo Milan drove exceptional growth in the Milan hotel market in 2015 on top of an already strong 2014. With more than 21 million visitors, the target of 20 million attendees was exceeded and really put the city on the map, both for visitors and investors. Although the Expo was a complete success, the 2016 results were mitigated by the volume of new supply that entered the market since. The Excelsior Hotel Gallia, a Luxury Collection Hotel (235 rooms) and the ME Milan Il Duca (132 rooms) both opened their doors in May 2015; and the Mandarin Oriental (104 rooms) in August 2015, adding some 471 rooms to the luxury market. Several new projects will materialise in the next two years, the majority of which will be in the upper end of the spectrum, including a W Hotel expected to open in 2019. There are rumours about many more projects, although unconfirmed, and brands such as Rocco Forte, Lungarno Collection, Shangri-La and Waldorf Astoria have been mentioned.

Exceptional RevPAR growth in 2015 was the result of the successful Expo Milan, followed by an expected adjustment in 2016, mainly driven by a lower average rate. 2017 figures show a slight recovery, with increases in both occupancy and average rate, as the new supply settles into the market. Our valuation index increased by 4.4% in 2017 to partially reflect this improved performance adjustment as well as the investor interest in the market, which remains present and growing.

From a political and economic perspective, the situation remains challenging, as a much-needed reform on how the country is governed was rejected by a people’s vote in December 2016 and the amount of bad debt present in Italian banks lies heavy on the balance sheets. As previously indicated, however, hotel fundamentals and investor appetite for this market remain strong.

Change In Value For Market: (€Euro)

Legend
Significant Value Increase: Greater than +10%
Moderate Value Increase: Between +3% and +10%
Stable Values: Between -3% and +3%
Moderate Value Decline: Between -3% and -10%
Significant Value Decline: Less than -10%

Milan RevPAR Change (€Euro)

Milan RevPAR (€Euro)

For more information, please contact:

Sophie Perret, MRICS, MBA
sperret@hvs.com
  • +44 20 7878 7722 (w)
Simon Hulten
shulten@hvs.com
  • +44 020 7878-7775 (w)