Greece and Spain are safer bets than Italy for your summer vacation
Italy is lagging behind its Mediterranean rivals, Greece and Spain, to save the summer tourist season. Prime Minister Mario Draghi’s stick-and-carrot approach to getting Italians to vaccinate the elderly and frail before he agrees to open the country up to sun-seekers is morally right, but it is a risky strategy on economically.
Talk to Italian hoteliers and their dismay is palpable. Take Rocco Forte, the British hotelier, who is due to open his new luxury Italian residence, Villa Igiea, in a 19th-century fortress overlooking the Gulf of Palermo in Sicily on June 3. . Still, Forte tells me that well-heeled Americans who typically make up about half of its clientele are reluctant to book because they don’t know when Italy will reopen and whether it will be safe.
Everything is very different in Greece, which started pilot breaks for foreign visitors as an opening test this summer. At least 69 Greek islands will be fully vaccinated by the end of April. In Spain, the tourist cities of Madrid and Barcelona have remained open throughout the pandemic. The hotels in Rome and Milan have been closed for months.
Draghi wants to use all the tools available to force the pace of vaccinations in Italy, including using the summer season as leverage. It is perfectly justified to prioritize this way, although it is quite a gamble. The prospect of the country missing out on lucrative tourists is already fueling social and political tensions.
Restaurant owners in Rome clashed with police last week outside Parliament over the lockdown. Meanwhile, Italian regional governors threaten to ignore Rome’s demand to vaccinate elderly and vulnerable citizens first, and instead follow the Greek model by favoring residents of holiday islands such as Sicily, Capri, Stromboli and Panarea (a summer destination for the Italian business elite). . The business lobby group Confindustria has lowered its forecast for Italian growth this year to 4.1% from 4.8%, two-thirds of which depend on the success of the summer season, according to Carlo Bonomi, the boss of Confindustria.
Yet Draghi remained determined to vaccinate those most in need first. By taking an uncompromising approach with the powerful hotel industry, the former President of the European Central Bank has given an intriguing indication of how he plans to force change more broadly in the dying Italian economy.
Draghi’s main concern is clear: Italy’s chaotic vaccination program has exposed some of the worst weaknesses of “Bel Paese” (beautiful country). The bureaucrats spoiled the deployment of fire at the elderly. And in some cases, privileged groups have taken priority. Last month I spoke to a 96-year-old man from Friuli-Venezia Giulia who still hadn’t been given a date for his shot, and a healthy 50-year-old manager from a top notch company in Milan that had just had their own. For Italy to have a chance to revive its economy after the pandemic, it must crush the bureaucracy and cronyism that is strangling its economy. Where better to start than vaccinations?
The government is fully aware of the importance of tourism: in Italy, it represents 13% of GDP and nearly 15% of employment, according to the OECD. And if Italians can still spend their holidays at home this summer, the economy needs a country open to the most spending foreigners.
Ori Kafri, co-founder of five-star hotel chain JK Place, tells me that he has a lot of interest in his oceanfront vacation spot in Capri from regular visitors who want to book a postponed vacation. . Yet even he is skeptical of the usefulness of prioritizing vaccines for tourist islands. “The whole country must be free from Covid,” he said. “You have to look at a bigger perspective, as foreign tourists do.”
A peculiarity of Italian tourism is that it is the only European country with more than a million hotel rooms, and most establishments are run by small family businesses. The large chains represent only 5%. Draghi is betting that the best family businesses will have the flexibility to react as soon as Italy reopens, even in the short term. It is these types of traits that have allowed decent businesses to thrive in the chaotic politics of Rome for decades.
But there is also a post-pandemic opportunity here. One of the stumbling blocks of Italy’s declining economy over the past 20 years has been the dominance of small, underperforming family hotels. The country has long lacked the hospitality infrastructure that appeals to affluent tourists from the United States, northern Europe, the Middle East and China.
It piques Italian pride that France attracts 90 million foreign tourists per year and Spain around 83.5 million, while Italy attracts around 60 million per year despite its natural, cultural and culinary riches. Revitalizing Italy’s tourism sector has long been seen as a way to boost its hidden economy, especially in the poorer south.
Investors say the economic distress caused by Covid means the price is finally right for large groups to jump into Italian tourism. The Italian-French company Covivio, owned by billionaire Leonardo del Vecchio, finalized in September the purchase of 573 million euros (685 million dollars) of seven Italian hotels, including Exedra in Rome. The luxury hotels Six Senses and Bulgari are about to open their doors in Rome. Andrea Guerra, former boss of Luxottica, has joined LVMH SE to manage its five-star hotels Belmond and Cheval Blanc, a sign that she plans to develop in Italy.
In the inevitable rewrite of Italian capitalism after the pandemic, building a tourism sector better suited to the tastes of today’s most spending travelers would be a plus. Draghi’s immediate concern is the vaccination campaign, but if a pandemic crisis leads to a more profitable vacation industry, he won’t complain.
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James boxell at [email protected]