Italian hospitality investment soars 65% in H1 2025

The first half of 2025 saw a 65% annual increase in real estate investments within the Italian hospitality sector to reach €1.4 bn, with almost half coming from foreign sources.

Hotel Borgo di Cortefreda, Barberino Tavarnelle - Gruppo RYZE

This growth is driven by the emergence of new "hybrid formats" like branded residences and serviced luxury apartments, which offer comprehensive hotel services and are also influencing residential BTR initiatives, according to a report by Gruppo RYZE (formerly Yard Reaas), in collaboration with Remax Italia Research Centre and 24Max.
Investments, representing a quarter of total commercial real estate, are concentrated in Northern Italy and major tourist hubs such as Como, Venice, Rome, Milan, and Naples.
The luxury segment is a key driver, with international capital (mainly from Europe and the US) accounting for about half of investments. While domestic tourism saw a slight dip, international tourism grew, highlighting its importance for Italy's tourism competitiveness.
Around 90% of the investment volume targeted 4- and 5-star properties, with 5-star hotels alone comprising over 50%. Hotel operators were the predominant investors (around 40%), followed by high-net-worth individuals, family offices, and private equity funds. Value-add transactions (developments, conversions, and renovations) made up about half of the total transaction volume. The preferred acquisition method was vacant possession, accounting for over two-thirds of transactions.
Serviced apartments are a growing segment in Europe, with strong prospects in Italy, and key markets including London and Paris. Branded residences are managed by or affiliated with global brands and are often privately owned, with management outsourced to maximise returns. New markets are appearing across Europe, such as Sardinia, Comporta (Portugal), and Romania. Italy has been slower to adopt these luxury offerings, but is seeing increased demand from high-net-worth and ultra-high-net-worth individuals. Top Italian destinations include Sardinia and Tuscany, while global investors are also targeting underperforming hotels in Rome, Milan, and Venice for repositioning, often by adding attached residences.
Laura Piantanida, head of Institutional Relations at Gruppo RYZE, commented: "This segment has proven to be particularly high-performing and is characterised by progressive diversification, both in terms of formats offered, ranging from traditional hotels to luxury camping (or glamping), and in terms of the expansion of investor types. The boundaries between new accommodation and residential formats are therefore increasingly blurred, with the manager at the centre of the initiative's success. Consequently, the role of the property owner is growing in importance."