Europe -  Florence, Italy

Florence is the capital of Tuscany, centrally located in Italy, on the River Arno. With its abundance of historic art and cultural attractions, Florence is a highly desirable tourist destination and often a stop on tours through Italy. While primarily a leisure destination, Florence benefits from the presence of a strong fashion sector. Prime luxury brands (Roberto Cavalli, Salvatore Ferragamo, Emilio Pucci) are based in the greater Florence area. Leveraging this historic tradition, Florence hosts the biannual Pitti Immagine fair, which is an important international fashion exhibition held in January and June in the Fortezza da Basso.

While the USA is by far the largest international source market, American tourists often visit Florence as part of a tour as long-haul connections from Florence airport are extremely limited. Because of its leisure focus, the city’s hotels experience strong seasonality with many properties closing over winter. In 2009, hotel performance dropped due to the economic crisis, and properties subsequently struggled to push average rates back to normal for a number of years; nonetheless, the city’s hotels eventually started regaining yearly growth. Particularly strong performance growth was recorded in 2017, driven by both occupancy and average rate and, as a result, RevPAR levels have grown by double figures, long overtaking pre-crisis levels. As of 2018, Florence’s hotels now record an average annual occupancy in the mid-70s, with sustained average rate growth.

The city’s hotel market is characterised by small properties and a lack of international operators, since many hotels are independent or part of a regional brand or group. This is not expected to change any time in the near future as the city’s pipeline is very limited. There are currently only two properties in the pipeline for Florence. The first is the 173-room 25hours Hotel Firenze situated in the city centre, which is currently under construction and due to make its debut in late 2020. The other project in the pipeline is The Student Hotel – Manifattura Tabacchi (318 rooms) which will be located just outside the historic city centre and will open its doors in early 2021. Barriers to entry are extremely high because most of the city centre’s buildings are listed, making conversions very costly.

Following 2016’s active transaction market, no hotels changed hands in 2017 or 2018. This year’s HVI indicates that hotel values in Florence grew by 2.1% in 2018, ranking 23rd by value change. From a broader perspective, Florence’s hotel values allowed it to hold seventh place on our index, with Paris, London and Zürich securing the podium.

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%

Florence RevPAR Change (€Euro)

Florence RevPAR (€Euro)

For more information, please contact:

Sophie Perret, MRICS, MBA
[email protected]
  • +44 20 7878 7722 (w)
Magali Castells
[email protected]
  • +44 20 7878-7710 (w)
  • +44 7 850205149 (m)