Italy

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Business travel took a huge hit in Italy during the pandemic. Istat, the country’s official statistics body, said the number of business trips in 2021 was just under 3 million, an increase from 2.5 million in 2020 but both years are sharply down on pre-pandemic 2019 when 7.8 million Italians travelled on business.

How does this translate into spend?

The GBTA BTI Outlook ranks Italy as the ninth biggest business travel market in the world, with 2021 spend of US$12.9 billion, a drop of four per cent on the previous year’s figure of US$13.4 billion. Prior to the pandemic in 2019 the market was worth around US$35.6 billion.

The World Trade and Tourism Council believes Italy’s business travel spending is even higher, putting it at US$42.2 billion in 2019, falling to US$18.9 billion in 2020.

GBTA is upbeat about Italy’s prospects – it predicts that business travel spend will nearly double in 2022 and the market will recover to above its pre-pandemic levels in 2024 with a forecast for that year of $38.1 billion.

2021 saw a big change in Italy’s travel landscape with Alitalia ceasing operations in October, following years of losses. A new name appeared to take its place – ITA.

ITA is aiming to focus on international traffic to and from Rome Fiumicino and to be the reference airline for business and leisure traffic to and from Milan Linate.

The new company, despite taking on the assets of Alitalia, is not liable to repay illegal state loans of €900 million that were given to Alitalia back in 2017. It is also much smaller than Alitalia, will operate a much less dense air network and, crucially, has less generous employment contracts than Alitalia.

The hotel sector was battered by the Covid storm. According to the Italy Hotels & Chains Report 2022 report from Horwath International, the number of overnight stays in Rome in 2020 was 81.3 per cent down on 2019 levels. In 2021, this has improved but only to 62.6 per cent down on 2019. Despite being well down on 2019, Horwath called these “encouraging signs of recovery”.

NH Hotels revenue in Italy, where the Spanish group is the biggest business hotel chain, grew to €159 million in 2021, up from €83.1 million in 2020. It is still less than half of the turnover achieved in Italy in 2019, when the figure was €323.6 million.

The slump in travel translated into many companies exiting the market. According to the Assoturismo Confesercenti, in 2021 alone 4,116 companies in the hospitality and tourist services ceased activity, the worst figure for five years.

Presenting his annual Observatory on Business Travel in January 2022, Professor Andrea Guizzardi of the University of Bologna said, “It is clear that there is still no sign of a rapid return to the standards we were used to.”

Professor Guizzardi predicts a jump in business travel of 25 per cent in 2022 over the previous year but he believes it will be 2025 before the market fully recovers, a year later than the GBTA forecasts.

Many will be looking to GDP growth to spur business travel as Italian companies start to travel again.

In 2020, Italy’s GDP fell by 9 per cent before returning to growth of 6.6 per cent in 2021. The Italian government predicts growth of 3.1 per cent in 2023, down from a previous projection of 4.7 per cent, and 2.4 per cent in 2023, slightly lower than the previously forecast 2.8 per cent. The downgrades come as a result of the conflict in Ukraine.

There will be changes in the market, says Professor Guizzardi. “Travel managers see their work as more complex. Before [Covid] they organised trips; after Covid-19 they will control the trip: duty of care, costs, documentation, revision,” he said. “Travel management companies must now produce services with a much higher added value. This will lead to a completely new market.”