ROME — Italy’s state-backed funds and sovereign wealth funds are focusing on providing sustainable hotel developments and adjacent communities with return on investment as an important part of the parcel but not the string that ties it up.
Chiara Caruso is head of the Fondo Nazionale del Turismo — or National Tourism Fund — which is part of banking entity Cassa Depositi e Prestiti Real Asset SGR, formerly the Fondo Strategico Italiano S.p.A. The fund acquires real estate, including hotels, with two sustainability criteria front of mind: that of the real estate itself and that of the people and communities around them.
Caruso said the fund's strategy most often is to lease buildings back with 30-year agreements or longer.
Commenting about its specific hotel portfolio, Caruso said the fund has “doubled [its] portfolio from 2,000 rooms in the last two years,” mostly in partnership with Italian hotel management firms.
But acquiring hotels in Milan, Rome and Venice is not the fund's top priority, she added.
“The top three cities do not need us as a long-term investor. We are not speculative, more of a cash-on-cash investor. We want hotels that can stabilize, and we do not have an aggressive exit strategy with cap compression,” she said at the recent Italian Hotel Investment Conference.
The Fondo Nazionale del Turismo made its investment debut into the hotel space in 2014 when it provided a capital injection of approximately €60 million into Rocco Forte Hotels for a 23% share of the company. That investment in Rocco Forte Hotels — which always has had an Italian influence — buoyed the sustainability of the British hotel firm but also that of its hotels’ neighborhoods.
Two of the Fondo Nazionale del Turismo's recent projects in planning or construction have underlined this focus on sustainability and community.
One is the Guido Reni Barracks in the Flaminio district, an area of Rome north of the Piazza del Popolo but one that does not attract legions of tourists. The site, once owned and occupied by the Italian army, is set to receive a hotel covering approximately 200,000 square feet, a science museum, retail and restaurants and housing for locals.
A second is project Palazzo delle Terme Berzieri, a redevelopment of an Art Deco spa in Salsomaggiore Terme, close to Parma. The attraction opened in 1923 but closed during the pandemic, with CDP acquiring it for €10.25 million. The bank has partnered with operator QC Terme to reopen the property later this fall.
Caruso said crucial to these developments are a balance between the present needs of communities and the private sector and the ongoing care of Italy’s patrimony and heritage.
Funds such as Fondo Nazionale del Turismo often help stabilize hotels and create destinations that did not exist before, she added.
“We can provide a business line to help the operating company grow, and we have minimum guarantees in our new contracts,” Caruso said, adding there are numerous ways funds can be allocated responsibly and sustainably.
Periodic reports are required on how all assets on a fund's balance sheet manage and measure sustainability, she said.
“Pure financial success must be balanced,” she said.
Homegrown investment
Part of the mission of the Fondo Nazionale del Turismo to support Italian employment, Italian brands and Italian white-label management firms, Caruso said.
“We know there are too many fragmented operators, so we are helping in the consolidation. We are also supportive of non-Italian brands as we believe they bring in higher standards,” she said.
Another stipulation of the fund's hotel investment strategy is an insistence that percentage of partners’ profits are reinvested in the assets.
“We’re expanding with €250,000 budget lines in secondary and other markets, a condition being that our capital must be mirrored by the third-party investor,” she said.
Carine Bonnejean, managing director of hotels at business advisory Christie & Co., said that in 2024 almost €2 billion was invested in the Italian hotel market out of a €22.8 billion total across Europe. The United Kingdom was the biggest beneficiary, followed by France, Spain and Italy in that order, she said.
“We saw that 2024 was a very strong year, well above any other real-estate sector,” Bonnejean said.
It's likely that European hotel investment across 2025 will be lower, she said. But despite lower investment figures continent-wide, Italy’s share of hotel investment is expected to rise from 7% in 2024 to 9% in 2025.
“We can expect a very good year for Italy, if not for Europe,” she added.
Other healthy trends are that in 2024, 60% of Italian hotel transactions were domestic ones and that the country’s secondary cities are coming into their own.
“Fifty-three percent of 2024 Italian deals were outside of Rome, Venice and Milan,” Bonnejean added.