Europe -  Milan, Italy

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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 most 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, with some 471 rooms in the luxury market alone in that year. The 2015 Expo seems to have created a long-lasting positive effect for the hotel market given the significant increase in visitation: the average bednights accommodated in the period of 2008-14 were 8.5 million per annum; since 2015 the average has increased to around 11.5 million.

Growth for the hotel sector in Milan has been subtle for the past decade and followed inflationary trends; since 2013, average rate has been on the rise in Milan. 2015 was one of the most successful years given the occurrence of the Expo and therefore providing RevPAR growth of roughly 30%. As of 2018, annual occupancy levels in Milan stand in the 70s with average rates comparable to those of other major European cities. Overall hotel values in Milan increased by around 4.5% in 2018, as recorded in our 2019 Hotel Valuation Index.

There are four properties currently in the pipeline, of which one Hampton by Hilton is far from the city centre and the most luxurious property is The Radisson Collection Hotel Palazzo Touring Club. Altogether, these properties are expected to add roughly 400 rooms to the supply by the end of 2020.

At present, investor appetite for this destination is seemingly limited compared to other European cities, which can probably be partially explained by the very fragmented, family-led ownership structure that characterises the Italian hotel market. Within the last two years, the most significant hotel transactions have included the sale of LaGare Hotel Milano Centrale – MGallery by Sofitel for €100 million (€710,000 per room) and Hotel NYX Milano for €60 million (€200,000 per room).

The widespread impact of the coronavirus (COVID-19) has had an unprecedented impact on hotels and hotel values worldwide. Consequently, the latest HVI analysis may no longer reflect the most current measure of lodging industry strength or the hospitality investment market.

In each of our offices across the globe, we are working tirelessly to analyze the impact of recent events and provide timely insights to help you navigate these uncharted waters. Because it is unclear how long the pandemic will last or how long related restrictions will be in place, we are updating our analyses on a weekly basis using the most current data.

Additionally, examination of value trends in prior cycles can provide useful information. Historical patterns, together with an understanding of the market’s current expectations for the eventual recovery of the industry and its performance, can provide insights on the likely trajectory of decline and recovery for hotel values.

For the Latest Information and Analysis on the Impact of COVID-19Click Here

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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)