Impact of COVID restrictions on the Italian hotel sector
Over the past two years, Covid-19 has hit the hotel industry hard. On January 10, Italy imposed new restrictions on travelers traveling to the country, which will hamper the recovery of the Italian hotel industry.
New restrictions have significantly hampered the recovery
According to GlobalData’s travel restrictions timeline for Italy, the imposition of restrictions by the Italian government has been accompanied by declining occupancy rates. On 22 March 2020, Italy announced that all citizens were prohibited from moving or travelling on public or private transport. Furthermore, on 1 April 2020, the lockdowns were extended until mid-April and these measures have had a knock-on effect on the Italian tourism sector. Data from the Italian National Statistics Office (ISTAT) shows the clear impact this has had on hotel occupancy. In April 2019, accommodation providers in Italy recorded 28.5 million overnight stays. In April 2020, this figure dropped to 1.3 million. This shows that there is a direct correlation between Covid-19 restrictions and hotel occupancy rates.
Although restrictions were lifted later in the year, the lasting impact was significant. According to GlobalData’s Hotels database, occupancy in Italian hotels fell by 44.4% year-on-year to just 39.7% in 2020. Despite this, additional restrictions have been implemented across the hotel sector due to the ongoing threat of Covid-19. For example, guests are now required to provide proof of vaccination or recovery from a recent infection. Travellers are also required to wear face coverings. The Italian government has seen fit to enforce these restrictions by law and issue fines for non-compliance. This will slow the recovery in the future, as travellers do not want to be restricted by masks or the threat of a fine.
Furthermore, traveller sentiment is still quite negative, with 40% of respondents in a GlobalData Q3 2021 global consumer survey saying they were ‘extremely’ concerned about the impact of the pandemic. With the threat of further restrictions in Italy, many will choose to stay home, find an alternative destination or travel domestically instead. The restrictions of the past two years have clearly had a negative impact on the Italian hotel industry. As such, the restrictions will undoubtedly slow the recovery. With these new rules for the Italian hotel industry, GlobalData projections show that it could take three to four years for the sector to recover.
Recovery will take up to four years due to the effects of Covid-19
GlobalData projections show that occupancy will grow to 50.6% by 2021 and 65.2% by 2022. However, according to these projections, occupancy will not reach 2019 levels again until 2024. However, further restrictions could hamper this recovery. Ultimately, it is uncertain what will happen to the hotel industry in the wake of the new restrictions imposed by the Italian government. However, according to the data cited, there is a high probability that these measures will prove detrimental to the recovery of hotels in Italy.
“The Covid-19 restrictions have had a lasting impact on the Italian hotel sector” was originally created and published by Hotel Management Networka brand of GlobalData.
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