Europe -  Rome, Italy

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Rome, the eternal city, offers numerous historical and cultural sites, which draw visitors from all over the world. Rome’s popularity is highlighted by its strong demand growth over the past several years, from Europe but also from the USA (Rome is one of the most popular destinations for US travellers), and increasingly from Asia and Middle Eastern countries.

From a political perspective, Sergio Mattarella, a constitutional court judge and veteran centre-left politician, was elected President by parliament in 2015 to succeed Giorgio Napolitano, who stepped down due to old age. Mr Mattarella was little known among the general public, but is a respected figure in political circles after a 25-year parliamentary career and several stints as minister in governments of the left and right. Giuseppe Conte was sworn in in June 2018 as prime minister of Western Europe’s first anti-establishment government whose aim is to cut taxes, boost welfare spending and overhaul European Union rules on budgets and immigration. Mr Conte, a law professor, was the choice of the far-right League and the radical Five Star Movement which formed a governing coalition, ending three months of political deadlock following inconclusive elections. GDP is expected by the Economist Intelligence Unit to slow in the short term to around 0.1% in 2019 and 0.4% in 2020 before stabilising at around 1% thereafter.

In terms of hotel performance, Rome had an excellent year in 2018. Occupancy saw a modest improvement and average rate a strong one, resulting in RevPAR growth of approximately 5.0%. High barriers to entry and a number of major renovations, reopenings and rebrandings in the past few years have helped to drive the potential of the market upwards, and with several more prominent openings on the horizon (including the EDITION, the W Rome and the Rocco Forte Hotel de la Ville, among others), we expect this trend to continue. The pipeline of luxury properties may impact the occupancy levels of this segment in the short-term but are expected to help raise awareness and market the city as a luxury destination.

From a transactions perspective, the city has remained relatively quiet in the past two years. The 640-room Sheraton Rome Hotel and Conference Centre was sold in July 2017 for €37 million, the Meininger Hostel Rome in January 2018 for €25.8 million and the Lama Hotel for €50.6 million, also in January 2018.

Overall, 2018 Rome hotel values increased by 5.3% over 2017 levels.

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.

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For more information, please contact:

Sophie Perret, MRICS, MBA
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Magali Castells
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