Colliers International is working hard to support clients in their decision making with recommendations and advice to make the best out of what is currently a difficult situation and a challenging market. In Italy, our hotels & leisure experts have produced a report on the local market which considers three possible recovery scenarios based on two main variables: the country’s dependence on international tourism and on air travel.
Europe | Impact of national and international travellers on coutries recovery
The impact that covid-19 will have on the national economy depends on two factors: a) the size of the tourism sector as a whole; b) the country’s dependence on foreign tourists. Countries that strongly depend on international travellers will be suffering economically. As a result, countries with a significant amount of domestic tourism are better off in this situation. Once covid-19 measures are eased, domestic tourism will recover much faster than cross-border tourism. Italy recorded about 429 million of stays composed by an equal percentage of domestic and international flows. Tourism represented about 5% of GDP (direct contribution only, but more than 13% if we also consider indirect and induced contribution). It means that Italy risks facing a prolonged recovery.
Europe | Impact of air or car-based travel
As international air travel is curtailed, markets more prone to demand from international air travel are most likely most exposed to a sharp downturn. Markets that can function on domestic car-based travel are probably the most resilient. There is, of course, a significant seasonality element to factor in here. If the covid-19 virus can be controlled over the next quarter, then the European summer season destinations could recover. If the covid-19 virus is controlled, but travel remains restricted within borders, then countries that are driven more by car-based, domestic tourism are likely to be more resilient locations for business.
Italy | Possible Future Scenarios
In three months, it will be summer season. If the virus is not stable or under control at that time, then the consequences will be even more significant for the tourism industry and the world economy since summer is the most profitable season, especially for Italy.
Download our report where we analyse three different recovery scenarios:
1. Stable before June
2. Under control after the Summer
3. Under control from 2021
Are you interested in other European markets? Download our Q&A