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The capital city of the Italian region of Tuscany is also its most populous, with approximately 382,000 inhabitants, expanding to more than 1.5 million over the greater metropolitan area. Florence was declared a World Heritage Site by UNESCO in 1982. The city is noted for its culture, Renaissance art and architecture, monuments and numerous museums and art galleries, including the Uffizi Gallery and the Palazzo Pitti. Florence benefits from a strong fashion sector, with the likes of Roberto Cavalli, Salvatore Ferragamo and Emilio Pucci all based in the greater city area. Florence hosts the biannual Pitti Imagine fair at the Fortezza da Basso in January and June each year. After virtual editions in both 2020 and 2021, the show is expected to be resumed in-person from June 2022. Whilst 2018 and 2019 were somewhat stagnant years in terms of international visitation to Florence, domestic tourism supported the total arrivals to the city. Overall, total visitors grew at a compound annual growth rate of 1.4% between 2010 and 2019. The city is generally heavily reliant on international feeder markets which account for around 70% of demand. After several years of RevPAR growth, performance dropped substantially on account of the COVID 19 crisis, with RevPAR reaching 15% of the 2019 level in 2020 and 40% in 2021.

The city’s hotel market is characterised by small properties and a proportional lack of international operators, as many hotels are independent or part of a regional brand or group. Barriers to entry are extremely high due to most of the city centre’s buildings being listed, making conversions very costly. Only a handful of pipeline projects exist, and they include the 122-room W Hotel Florence (opening 2023), the 670-room Student Hotel Belfiore (2023), the 70-room Leeu Collection Florence (2023), the 318-room Student Hotel Florence Manifattura Tabacchi (2024), the 150-room lifestyle Manifattura Tabacchi Hotel (2024) and the Baccarat Hotel (2024). We also highlight the full refurbishment of the NH Anglo American Hotel, which is expected to be rebranded into a Curio Collection in autumn 2022. In respect of the pandemic, the likelihood of proposed projects being delayed or altogether cancelled has increased; some of the mentioned new supply may still be deferred or cancelled.

Hotel transactions in Florence rebounded strongly in 2021, mostly driven by international private investors. The 212-room Hilton Metropole and 121-room Hilton Garden Inn Novoli were acquired by British investment firm Pygmalion Capital in April 2021 for an undisclosed amount. Real estate investor Hines acquired the regeneration project of the Manifattura Tabacchi in December 2021 for €80 million and intends to develop new student housing with more than 500 beds. Other transactions include the sale of the 115-room NH Anglo American in April 2021 to Castello SGR and of the 173-room 25hours in November 2021 to Invesco.

Our HVI analysis indicates a value rise of 5.8% per key in Florence in 2021. Given its reasonable pipeline and strong leisure base combination, Florence is likely to recover quicker than many other European markets. However, reliance on foreign visitors and underinvested properties could be limiting factors.

ADR, Demand, Occupancy, RevPAR, and Supply Projections:

ADR Change
Market Demand Change
Hotel Occupancy Increase/Decrease
RevPAR Change
Market Supply Growth

Change In Value For Market: (€Euro)

Florence RevPAR Change (€Euro)

Florence RevPAR (€Euro)

For more information, please contact:

Sophie Perret, MRICS, MBA Senior Director [email protected] +44 20 7878 7722 (w) +44 0 7725781037 (m)