Roberto Marsella Cdp Equity, Head of business development Milano, 27 ottobre 2016
Introduction Italy: A Natural Infrastructure Italy is home to some of the greatest treasures in the world: museums, archaeological sites, parks 51 Unesco sites: the largest number of sites included in the Unesco s World Heritage list Lucky to receive one of the most important cultural assets in the world: Ancient Rome, witness of a great civilization from the past WHAT ITALY HAS TO OFFER WHAT OTHER COUNTRIES ARE ABLE TO EXPLOIT
Heritage Assets and Economic Value Heritage Assets represent a potential economic value The increase of their usage creates economic value and visibility for the country Tourism is a mean to increase their value TOURISTIC ACTIVITY TOURISTS ASSET UTILIZATION VALUE
Public-Private Partnership to increase heritage assets utilization Assets usage Artistic and cultural heritage is not for sale, but needs to be utilized Asset utilization generates wealth, employment, a better positioning for the asset for the country Public-Private Partnership Tourism plays a central role «Usage finds its accomplishment through actions aimed at promoting knowledge of the cultural heritage as well as ensuring its public use. Economic and financial sustainability of such actions has always represented a critical issue for the preservation of cultural heritage. Due to the limited availability of public authorities funds, private contributions are becoming increasingly important to finance assets development initiatives. Public-Private Partnerships can increase efficiency and allow to make maintenance and enhancement investments that not always can be carried out by the public sector.» Heritage assets have unexploited economic value Corte dei Conti, August 2016 The increase of their usage generates economic value and visibility for the country Tourism is a mean to increase heritage assets usage and, hence, VALUE
Tourism in Italy (1/3) Tourism is a generator of economic growth TODAY, TOURISM GENERATES 10% OF ITALY S GDP: IT COULD BE THE MOST IMPORTANT SECTOR FOR THE COUNTRY S ECONOMIC GROWTH 16.0% 168 bn impact on GDP 2.6 mln jobs 5.8% 10.2% 9.1% 8.9% 4.2% 3.7% 3.9% Total contribution Direct contribution Source: World Travel & Tourism Council 2016 (based on 2015 data)
International Turisti internazionali Tourists (mln) Tourism in Italy (2/3) 2.000 2,000 1.800 1,800 1.600 1,600 1.400 1,400 1.200 1,200 1.000 1,000 800 600 400 200 Tourists by destination area (# persons) Turisti per area di destinazione (Numeri di persone) 0 1980 1990 Europa Europe 1995 Americas Historical Data Dati storici 2000 2005 Asia and e Oceania 1,14 1.14 bln mld 2010 Africa Source: elaboration on World Tourism Organization (UNWTO) data (% of international tourism revenues) Projections Previsioni 2014 2020 Medio Middle East Oriente 2030 1,81 1.81 bln mld 0,59 0.59 bln mld 0,74 0.74 bln mld market share Spain France Italy Germany UK (2.0) (2.6) (4.4) (1.3) (2.1) Source: based on Boston Consulting Group and World Tourism Organization (UNWTO) data, World Bank International tourists arriving in Italy (# persons) 43.6 Source: World Bank, Enit 46.1 46.4 47.7 48.6 Comment During the last decade, Italy suffered from: reduction of public resources for the promotion and valorization of its cultural heritage slowdown of actions to enable investments toward a radical transformation of the sector less innovation compared to other countries, leading to a greater market share loss
(1) Includes revenues of traditional tourism operators (i.e. airlines, hotel, restaurants, museums, etc.), suppliers (i.e. catering, cleaning companies, etc.) and the contribution of international tourism to other industries (i.e. manufacturing, constructions) Source: Confturismo, Banca d Italia, Banco de España, Banque de France; Eurostat; McKinsey & Company Tourism in Italy (3/3) Revenues from international tourism (1) ( bln, 2014) Average stay (# days, 2014) 49 INTERNATIONAL TOURISTS IN ITALY SPEND LESS THAN IN FRANCE AND SPAIN 43 5.1 3.7 2.9 43 34 Average spending (, 2014) 315 188 187 Today, Italy lags behind France and Spain in terms of tourism attractiveness. Other countries grant better touristic offers thanks to more efficient, innovative and higher quality services
Possible Solutions Governance Coordination of functions and accountability between State and local authorities to promote our cultural and artistic heritage Public-Private Partnership to increase usage of our cultural assets Industrial Policy Reorganization of the offer side, now spread across a multitude of private and public operators
U K Franc e Finland Spain Swed en Netherla nds Denmark Belgiu m German y Irelan d Luxembour g Portugal Austri a Gree ce Italy Focus on the Italian touristic offer % of rooms of hotel chains 60 50 40 30 20 10 0 THE ITALIAN HOTEL INDUSTRY IS HIGHLY FRAGMENTED Only 12% of rooms in Italy belong to hotel chains! Source: JLL on OTUS&Co data Stimulate innovative incoming platforms, also in partnership with private operators: merge culture and technology Attract tourist flows from distant geographies: promote locations even the less known and help hotels with lower visibility Promote the export of our goods and services: wine, food, fashion, design, art and craftsmanship, opera and other events Invest to reorganize the currently fragmented offer system
Tourism ecosystem Accessibilità Accessibility Transportati Trasporti on and e rotte fly aeree routes Development Offerta di proposte esperienziali of experiences offering Experience Esperienza Vettori Factors of di sviluppo touristic meta development turistica Accommodat Ricettività tion capacity High Elevati standard service di servizio standard Reduction of Riduzione della frammentazione the offer dell offerta fragmentation Concentrati on Concentrazione Marketing Promotion through Promozione efficient attraverso strumenti di marketing efficaci tools (web, social social media) media) Team approach: the tourism sector more than others has a mosaic-like composition Interdependence between the operators: every operator is responsible towards the other
CDP Equity and tourism Tourism is a pillar of CDP Group business plan CDP Equity as part of the group is ready to invest in companies of this industry Specialization drives competitiveness (es: REITs) Size drives competitiveness An example of how CDP will works: CDP Equity can provide equity to hotel management operators CDP Immobiliare can provide equity to REITs to invest in real estate properties CDP Equity is focused on the incoming, to attract international long-distance tourists CDP Equity understands the importance of innovation
Role of foreign operators Travel spending breakdown Example of an international tourist in Italy (1) 45 Expenditure with foreign operators Expenditure with Italian operators 55 30 20 1 19 10 5 Competition of international players as Booking and Expedia! 14 Total Transportatio n (incl. flights) Accommodation Food Entertainment Intermediation (agencies) (1) Based on a 5-day holiday of tourists coming from medium-long haul destinations Sources: Euromonitor; Schedule Dynamic Table Report for all Airlines for nonstop Passenger flights between all and Domestically flights, 2015; Annual Report 2013 Alpitour, Veratour and Settemari; Rapporto sul Sistema Alberghiero Italiano, Federalberghi, 2013
Case-study: Iceland The «Iceland Model» Successful hub and spoke model introduced by Icelandair in 1998 using Keflavik airport as its main hub Offer of direct flights to an increasing number of destinations Currency devaluation Improved marketing: award-winning Inspired by Iceland campaign Raised awareness of the country and stimulated people s appetite to visit Iceland, leading to a dramatic increase in visiting tourists Capability to respond to political, social, environmental and technological changes and trends (e.g. financial crisis in 2008, eruption of Eyjafjallajökull in 2010) Source: PFK Accountants & Business adivisers
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