Hotels, 60 per cent of the mid-market is in the hands of families: the challenges between inheritance and management models

At the same time, the open-air segment is growing strongly and sees operators such as Club del Sole and Human Company going through a phase of significant expansion, also thanks to the growing interest and support from institutional investors of primary standing. In all cases, the prevailing strategies point to a growing focus on the higher-end, resort and lifestyle segments. "These are structured and qualified operators that have been able to occupy an independent position," explains Bruno Fondacaro, partner at Advant Nctm. "These groups manage hundreds of facilities and tens of thousands of rooms across the country, with aggregate turnovers measured in the hundreds of millions of euro. They are therefore not a niche but a pillar of the Italian accommodation offer, with a territorial coverage capacity that the large international chains struggle to replicate".

However, the segment remains highly fragmented and has to contend with an increasingly competitive environment. Rising operating costs are added to the pressure of online distribution platforms and the growth of the non-hotel offer. "The 3-star segment is today the most under pressure of the entire Italian hotel industry," adds Fondacaro. "In the main tourist destinations, many structures are trying to reposition themselves, investing to obtain the fourth star, access more sustainable rates and the international clientele, which is now dominant. In other areas, on the other hand, reconversion operations, sales or affiliation to networks able to guarantee greater commercial visibility are on the increase".

Speaking of families, one of the thorniest issues is undoubtedly the generational transition. "A critical moment," according to Fabio Braidotti, Ey's head of hospitality in Italia, because it is caught between "the need to hook into a distribution system, make often conspicuous investments to keep up with the competition, or sell. When the new generation does not have the interest or the financial capacity to sustain this path, sale becomes the natural consequence, and if not properly prepared, it translates into the destruction of value for the owner'. A transition therefore already fraught with obstacles, in an industry on which chains and funds have the spotlight. "The transition to the third generation, or to more professional governance models, represents a delicate challenge," agrees Angela D'Amico, partner and real estate sector leader at Deloitte. Without solid governance and a clear strategic vision, even groups with quality assets risk losing competitiveness and making way for chains and more structured operators who see untapped potential in these assets'.

The predominant modus operandi of the groups - in both the midscale and upscale segments - is direct management. A choice that allows owners to maintain control of the business and preserve the identity of the structure. Alongside this model, however, more flexible formulas are emerging. The rental contract is now one of the main growth levers for medium-sized operators because it allows them to expand their portfolios without immobilising capital by renting out the business. The management contract is also growing and allows Italian groups to approach the logic of large international chains, having an operator who brings the brand and an owner who retains ownership of the asset.

Not least the franchising with international brands, such as Best Western or the 'soft brand' affiliations of Marriott and Ihg. "A viable model for those who want to access global distribution systems without ceding ownership of the structure. But it requires investment and recurring costs that not all operating margins in the medium segment can easily absorb," adds Fondacaro.

According to Deloitte's partner, the trend towards more flexible and yield-optimising management models is set to strengthen. In market terms, the room for growth for the mid-market segment of the hôtellerie could be significant provided that it breaks with the past by implementing a conscious and strategic transformation. "The change has in any case begun," concludes D'Amico, "there are innovative operators who are creating new brands in this segment such as The Social Hub, B&B Hote, or national examples such as Yellow Square. Something is changing, even in the top segments with big investors targeting hostels for the first time'.

While until the post-Covid tourism recovery it might have been enough to be present in the market, today 'the conditions for seizing the room for growth have become more selective and also require access to capital and the ability to differentiate,' Braidotti concludes. At a time when authenticity and territory are driving travellers' choices, the family-run hôtellerie can be a unique competitive advantage that is difficult for the international big boys to replicate.