Seasonal Challenges in the Italian Tourism Sector

The Italian tourism sector faces significant seasonal adjustments, with main causes being natural, institutional, and social factors. The sector experiences fluctuations in tourist nights, impacting businesses across the industry. Despite attempts to diversify offerings, challenges like limited tourist seasons persist, affecting profitability. Cultural tourism is less affected, while seaside and mountain tourism exhibit clear seasonal patterns. The sector's economic impact on GDP is substantial, with direct contributions totaling billions of euros.

• Italian tourism
• Seasonal challenges
• Economic impact
• Diversification
• Cultural tourism

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1. CubeFolder THE SEASONALITY IN THE ITALIAN TOURISM SECTOR www.reag-aa.com

2. The Italian tourism sector: some ways to correct seasonal adjustment The Italian tourism sector: some ways to correct seasonal adjustment Elena Zanlorenzi, Head of Research European R&D Office REAG 23-26.06.2010 Milan, Italy

3. INDEX 1. SEASONAL ADJUSTMENT 2. THE ITALIAN TOURISM SECTOR 3. SOME WAYS TO CORRECT SEASONAL ADJUSTMENT 4. CONCLUSIONS

4. 1. SEASONAL ADJUSTMENT Tourism seasonality = monthly fluctuation of the number of tourist nights Tourism is a seasonal phenomenon: natural causes: climatic seasons institutional causes: school holidays, time off social causes: public or religious holidays Tourism seasonality affects the entire tourism industry: tour operators travel agencies hotels transports Seasonality losses: additional costs for the PA (ex. parking) greater incidence of the fixed costs in the hotels turnover decrease of the revenues growth of the average room rate tourist overcrowding in the high season temporary employment

5. 1. SEASONAL ADJUSTMENT The Italian tourist sector is historically affected by seasonal criticalities in many locations the tourist season lasts only for 4-5 months per year for the remaining 7-8 months hotels and leisure activities are forced to close in these months of low season expenses could be higher than revenues Italian seaside tourist areas are the most affected by seasonal adjustments even for this reason return on investment could not be so attractive for the main international brands during the last years some operators tried to get round this matter diversifying the offer: SPA, wellness centres, business centres, etc. these are only local and segmented operation that do not lead to a resolution of the problem Some evidences about seasonality: the balanced use of touristic structures does not exclude monthly fluctuations but these are of low intensity different tourism typologies present different seasonality cultural tourism is the less affected by seasonality seaside tourism is typically affected by seasonality (summer) mountain tourism could have 2 seasons (summer and winter) wellness tourism could last for 4 seasons business tourism is affected by seasonality during holidays

6. 2. THE ITALIAN TOURISM SECTOR The tourism economic impact tourism contributes to GDP for 9,6% tourism contribute is equal to 152 billion of euro direct tourism industry contributes to GDP for 3,9% total overnight stays: 860 mln (of which 358 mln in hotel and extra-hotel accommodation) total Italian overnight stays: 546 mln (of which 204 mln in hotel and extra-hotel accommodation) tourists expenditure: 75.862 mln of euro (of which 49.495 mln in hotel and extra-hotel accommodation) Italian tourists expenditure: 44.049 mln of euro (of which 24.900 mln in hotel and extra-hotel accommodation) 2,4% 1,8% 9,2% Accomodations 26,5% Restaurants 9,9% Bars/coffees Dress&shoes TOURISTS EXPENDITURE BY TYPOLOGY (2009) Source: Reag work-out on Osservatorio Nazionale del Turismo data Leisure activities Manufacturing industry 13,4% Food Books&newspapers 16,2% Transports 15,1% 5,5%

7. 2. THE ITALIAN TOURISM SECTOR 45% 40% 35% 30% OVERNIGHT STAYS BY DESTINATION (% - 2009) Source: Reag work-out on Osservatorio Nazionale del Turismo data (2009) 25% Holiday houses 20% 15% Hotel and extra-hotel accomodations 10% 5% 0% 50% 45% 40% 35% 30% 25% Holiday houses 20% TOURISTS EXPENDITURE BY DESTINATION (% - 2009) Source: Reag work-out on Osservatorio Nazionale del Turismo data 15% Hotel and extra-hotel accomodations 10% 5% 0%

8. 2. THE ITALIAN TOURISM SECTOR 10% 6,3% 4,3% 3,5% 5% 0% HOTELS TURNOVER Source: Reag work-out on AICA data -2,4% -5% -5,5% -10% -9,1% -15% -15,9% -20% 2003 2004 2005 2006 2007 2008 2009 2% 1,0% 0,5% 0,4% 0% -0,1% -2% HOTELS TURNOVER BY ROOM Source: Reag work-out on AICA data -2,7% -4% -6% -8% -7,3% -8,1% -10% 2003 2004 2005 2006 2007 2008 2009

9. 2. THE ITALIAN TOURISM SECTOR 100 90 80 70 ROOM OCCUPATION RATE (% - 2009) Source: Reag work-out on AICA data 60 50 40 30 20 10 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 160 140 120 100 80 AVERAGE REVENUE PER AVAILABLE ROOM (% - 2009) Source: Reag work-out on AICA data 60 40 20 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

10. 2. THE ITALIAN TOURISM SECTOR 35 30 25 ITALIANS OVERNIGHT STAYS (%) Source: Reag work-out on different sources 20 1987 15 2007 10 5 0 25 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 20 15 FOREIGNERS OVERNIGHT STAYS (%) Source: Reag work-out on different sources 1987 10 2007 5 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

11. 2. THE ITALIAN TOURISM SECTOR 14% 12% 10% 8% OVERNIGHT STAYS IN CULTURAL DESTINATIONS (% - 2007) Source: Reag work-out on Osservatorio Nazionale del Turismo data 6% 4% 2% 0% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 30% 25% 20% OVERNIGHT STAYS IN SEASIDE DESTINATIONS (% - 2007) Source: Reag work-out on Osservatorio Nazionale del Turismo data 15% 10% 5% 0% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

12. 2. THE ITALIAN TOURISM SECTOR 25% 20% OVERNIGHT STAYS IN MOUNTAIN DESTINATIONS (% - 2007) Source: Reag work-out on Osservatorio Nazionale del Turismo data 15% 10% 5% 0% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 20% 18% 16% 14% 12% OVERNIGHT STAYS IN NATURALISTIC DESTINATIONS (% - 2007) Source: Reag work-out on Osservatorio Nazionale del Turismo data 10% 8% 6% 4% 2% 0% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

13. 2. THE ITALIAN TOURISM SECTOR 20% 18% 16% 14% OVERNIGHT STAYS IN LAKE DESTINATIONS (% - 2007) Source: Reag work-out on Osservatorio Nazionale del Turismo data 12% 10% 8% 6% 4% 2% 0% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 14% 12% 10% OVERNIGHT STAYS IN SPA DESTINATIONS (% - 2007) Source: Reag work-out on Osservatorio Nazionale del Turismo data 8% 6% 4% 2% 0% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

14. 2. THE ITALIAN TOURISM SECTOR Seasonality indexes Italy Cultural SPA Nature Lake Mountain Seaside Seasonality rate 6,2 2,6 5,3 6,2 9,0 13,4 23,8 Seasonal peak factor 2,5 1,4 1,6 2,1 2,2 2,5 3,3 Maximal utilization constrained by seasonality (MUS) 40,2 70,6 63,8 47,9 44,7 39,6 30,2 Seasonality underutilization factor (SUF) 59,8 29,4 36,2 52,1 55,3 60,4 69,8 seasonality rate: maximum overnight stays (Smax)/minimum overnight stays (Smin) seasonal peak factor (S ): Smax/average overnight stays (Sm) maximal utilization constrained by seasonality (MUS): 100/S seasonality underutilization factor (SUF): 100 - MUS

15. 3. SOME WAYS TO CORRECT SEASONAL ADJUSTMENT During the last years some operators tried to get round this matter diversifying the offer Some structures provide their clients with : SPA wellness center business center golf etc. These devices are only local and segmented operation that do not lead to a resolution of the problem Identify some categories till now ignored by the tourism sector: could the investment in these groups of people help the renewal of the sector?

16. 3. SOME WAYS TO CORRECT SEASONAL ADJUSTMENT Children (< 6 years old) tourism CHILDREN OVERNIGHT STAYS (%) Source: Reag work-out on various sources number: 3.400.719 (2019: 3.255.338; -4,3%) household income: 35.432 (+20,9% respect 46,6% 50% Italian average income) 40% the 31% of the households falls within the 2 30% classes with the higher income 25,0% tourism propensity: 34,3% 20% 14,5% 13,9% % on total overnight stays: 4,1% 10% overnight stays: 6,7 mln 0% jan-mar apr-jun jul-sep oct-dec 60% 52,0% 50,5% 50% potential demand: 12,9 mln of overnight stays 40% potential demand: 7,9% on total overnight stays 30% 23,3% Before 23,3% increase in tourism expenditure: +12,0% (direct 13,4% After 12,7% 20% 12,7% 12,0% 2,2 bln of euro; indirect 3,6 bln of euro) 10% seasonality rate: 4,0 (before 4,3) 0% seasonal peak factor: 2,0 (before 2,1) jan-mar apr-jun jul-sep oct-dec MUS: 49,5 (before 48,0) OVERNIGHT STAYS (%) Source: Reag work-out on various sources SUF: 50,5 (before 52,0)

17. 3. SOME WAYS TO CORRECT SEASONAL ADJUSTMENT Elderly people (> 65 years old) tourism ELDERLY PEOPLE OVERNIGHT STAYS (%) Source: Reag work-out on various sources number: 11.457.143 (2019: 13.184.101; +15,1%) household income: 21.117 (-27,9% respect 50% 44,0% Italian average income) 40% the 31% of the households falls within the 2 30% 24,1% classes with the higher income 17,1% 20% 14,8% tourism propensity: 13,5% 10% % on total overnight stays: 5,5% overnight stays: 8,9 mln 0% jan-mar apr-jun jul-sep oct-dec 60% 52,0% 47,3% 50% potential demand: 57,3 mln of overnight stays 40% potential demand: 35,1% on total overnight stays 30% 23,6% Before increase in tourism expenditure: +53,0% (direct 23,3% 14,8% 14,3% After 20% 9,9 bln of euro; indirect 16,0 bln of euro) 12,7% 12,0% 10% seasonality rate: 3,3 (before 4,3) 0% seasonal peak factor: 1,9 (before 2,1) jan-mar apr-jun jul-sep oct-dec MUS: 52,8 (before 48,0) OVERNIGHT STAYS (%) Source: Reag work-out on various sources SUF: 47,2 (before 52,0)

18. 3. SOME WAYS TO CORRECT SEASONAL ADJUSTMENT Singles tourism SINGLES OVERNIGHT STAYS (%) Source: Reag work-out on various sources number: 6.910.716 (2019: 8.389.609; +21,4%) household income: 17.546 (-40,1% respect 50% Italian average income) 41,9% 40% the 48% of the households falls within the 2 30% classes with the higher income 24,6% 16,9% 16,7% tourism propensity: 35,0% 20% % on total overnight stays: 8,6% 10% overnight stays: 14,0 mln 0% jan-mar apr-jun jul-sep oct-dec 60% 52,0% 49,2% 50% potential demand: 26,0 mln of overnight stays 40% potential demand: 15,9% on total overnight stays 30% 23,4% Before 23,3% increase in tourism expenditure: +24,2% (direct 14,0% 13,3% After 20% 12,7% 12,0% 4,5 bln of euro; indirect 7,3 bln of euro) 10% seasonality rate: 3,7 (before 4,3) 0% jan-mar apr-jun jul-sep oct-dec seasonal peak factor: 2,0 (before 2,1) MUS: 50,8 (before 48,0) OVERNIGHT STAYS (%) Source: Reag work-out on various sources SUF: 49,2 (before 52,0)

19. 3. SOME WAYS TO CORRECT SEASONAL ADJUSTMENT Groups tourism GROUPS OVERNIGHT STAYS (%) Source: Reag work-out on various sources household income: 29.308 the 40% of the households falls within the 2 30% 27,2% 25,2% 24,6% classes with the higher income 23,1% % on total overnight stays: 5,2% 20% overnight stays: 8,5 mln 10% 0% jan-mar apr-jun jul-sep oct-dec 60% 52,0% 51,2% 50% potential demand: 6,2 mln of overnight stays 40% potential demand: 3,8% on total overnight stays 30% 23,3% Before increase in tourism expenditure: +5,8% (direct 23,3% 13,0% After 12,5% 20% 1,1 bln of euro; indirect 1,7 bln of euro) 12,7% 12,0% 10% seasonality rate: 4,1 (before 4,3) 0% seasonal peak factor: 2,0 (before 2,1) jan-mar apr-jun jul-sep oct-dec MUS: 50,8 (before 48,8) OVERNIGHT STAYS (%) Source: Reag work-out on various sources SUF: 51,2 (before 52,0)

20. 4. CONCLUSIONS Italy Groups Children Single Elderly people Seasonality rate 6,2 4,1 4,0 3,7 3,3 Seasonal peak factor 2,5 2,0 2,0 2,0 1,9 Maximal utilization constrained by seasonality (MUS) Seasonality underutilization factor (SUF) 40,2 48,8 49,5 50,8 52,8 59,8 51,2 50,5 49,2 47,2

21. 4. CONCLUSIONS 60% 52,0% 50% 43,7% 40% 30% 23,7% 23,3% 20% 16,5% 16,1% 12,7% 12,0% 10% 0% jan-mar apr-jun jul-sep oct-dec Before After

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