Passive ownership is no longer the most compelling strategy in European hospitality. Capital is still interested in hotels, but the premium has shifted. Investors are increasingly drawn to assets where performance can be improved through repositioning, sharper commercial strategy, disciplined capex and stronger operating control, rather than through simple market exposure alone. CBRE’s 2025 investor survey points in exactly that direction: more than 90% of investors plan to maintain or increase their hotel allocation, and value-add has become the preferred strategy for a clear majority.
That is the right lens through which to read Italy today.
Italy is not merely a strong tourism market. It is one of the most interesting hotel investment markets in Europe because demand strength coexists with a stock base that still offers meaningful room for improvement. CBRE ranks Italy as the second most attractive hotel investment market in Europe for 2025, while Rome has risen to third place among the continent’s most attractive hotel investment cities.
The demand backdrop is not theoretical. Istat reports that Italy ranked second in the European Union for tourist nights in 2024, ahead of France and behind only Spain, with inbound demand accounting for 55.4% of total nights. Bank of Italy adds the financial dimension that matters to investors: Italy’s tourism balance showed a €21.2 billion surplus in 2024, equivalent to 1% of GDP, with holiday travel and city tourism making the largest contribution. (Istat)
That matters because value-add investing works best where demand is already deep enough to support a better product, a stronger rate structure and a more coherent operating model. Italy has that demand. The real question is not whether the market exists. It is where the market is still being under-monetised.
This is where Italy stands apart. The country still has a large number of family-owned hotel properties, and consultancy research continues to describe the market as highly fragmented and relatively low in international brand penetration. Taken together, those characteristics point to a market where a meaningful share of assets may be well located yet under-invested, under-branded or under-managed by institutional standards. That is exactly the kind of setting in which value-add capital can outperform.
In more mature and fully institutionalised markets, much of that spread has already been compressed. In Italy, it has not disappeared. There are still hotels where the location is sound but the concept is weak; where demand is evident but pricing discipline is poor; where the real estate is attractive but the business is not being run to its full potential. The upside, in other words, often lies less in financial engineering than in operational and strategic correction. That is an inference from the market structure and demand data, but it is a commercially important one.
This is also why underwriting matters more in Italy than surface-level deal access. A hotel can look persuasive in historical numbers and still disappoint badly after acquisition. The asset may require more capex than expected, a deeper repositioning than assumed, tighter cost control than prior accounts suggest or a more radical commercial reset than the initial investment case allowed for. The biggest risk is not necessarily paying too much. It is mistaking theoretical upside for executable upside.
That distinction is precisely where sophisticated investors separate themselves from passive capital. The strongest returns in this cycle are being made not by simply owning hotel real estate, but by moving assets into a stronger competitive position: improving product-market fit, tightening revenue strategy, upgrading the guest proposition, restoring cost discipline and building a more resilient operating model around the property.
In that context, the role of the advisor changes as well. Investors do not just need deal flow. They need judgment. They need someone capable of testing whether upside is real, where the operational risk actually sits and whether the post-acquisition improvement plan is credible.
That is where Hotel Management Group becomes relevant.
On hotelmanagementgroup.it, the group presents itself as an independent platform focused on governance, advisory and hotel-sector development, with an integrated approach designed to improve the medium- to long-term economic sustainability and profitability of hospitality assets. Its positioning is particularly well aligned with value-add investing because it frames the hotel not as a simple operating venue, but as a complex economic, financial and organisational business requiring method, managerial discipline and a multidisciplinary approach. (Hotel Management Group)
For an Italian investor, that kind of platform can help sharpen one crucial decision: whether an asset offers genuine improvement potential or merely the appearance of opportunity. For an international investor, the value is even clearer. Italy rewards conviction, but it also punishes weak local reading. The gap between available capital and local execution capability can be wide; a platform that helps narrow that gap can materially improve investment quality. That assessment follows directly from the characteristics of the Italian market described above.
So the real issue is not whether to invest in Italy. It is how to invest in Italy well.
The market offers strong demand, global visibility and continuing investor interest. It also offers fragmentation, uneven operating quality and an asset base in which not all hotels are yet positioned, capitalised or managed as efficiently as they could be. For the right investor, that is not a warning sign. It is the source of the opportunity.
The winning investors in Italy over the next phase are unlikely to be those who simply buy hotel assets. They are more likely to be the ones who identify, earlier than others, which assets can be materially improved — and who have the discipline, the local intelligence and the execution support to deliver that improvement.
That is why Italy remains one of Europe’s most compelling hotel value-add markets. And that is why Hotel Management Group can be strategically relevant: not as a marginal service provider, but as a partner in the phase where investment logic has to become operating performance.
Roberto Necci
Contact us at r.necci@robertonecci.it
