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TOURISM ITALIA 2020 LEADERSHIP, WORK, SOUTH
STRATEGIC PLAN FOR THE DEVELOPMENT OF TOURISM IN ITALY ROME – 18 January 2013
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Prepared by the Working Group of the Ministry for Regional Affairs, Tourism and Sport chaired by Piero Gnudi comprising of: Massimo Bergami (coordinator), Andrea Babbi, Pier Luigi Celli, Marco Di Luca, Mauro Di Dalmazio, Calogero Mauceri, Gabriele Morandin, Nicola Pianon, Roberto Rocca, Ignazio Rocco di Torrepadula.
Contributors: Antonio Achille, Alessandro Costamagna, Andrea Falessi, Marco Fanfani, Piero Gallo, Giulio Leporatti, Marcello Maria Mariani, Gian Luca Marzocchi, Francesco Millo, Francesco Nicotri, Chiara Orsingher, Antonia Postorivo, Enrica Sighinolfi, Vincenzo Nunziata, Marco Visentin.
This document is based on an elaborate project from The Boston Consulting Group, the contents of which will be made available on the Goverment website (www.governo.it) and on the institutional websites of the Department for Regional Affairs, Tourism and Sport.
© 2013 – Presidency of the Council of Ministers, Department for Regional Affairs Tourism and Sport.
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1. INDEX
1. Index 3 2. Foreword 5 PART ONE: ANALYSIS OF THE TOURISM SECTOR IN ITALY 3. The role and placement of Italy in Tourism 7 3.1 The growth of international tourism 3.2 Tourism: an opportunity that cannot be missed 3.3 The competitive position of Italy within international tourism 3.4 The structure and placement of the Italian offer 4. The fundamental elements of a tourism industry policy in Italy 29 PART TWO: ACTIONS FOR THE DEVELOPMENT OF TOURISM 5. Collective vision of strategic actions 35 5.1 Holistic approach to action definition 5.2 Guidelines and potential impact of the Strategic Plan 5.3 Priorities definition 6. Rethinking the Governance of the sector 38 7. A new role for the Italian State Tourist Board 45 8. Organising a modern offer 53 9. Bringing the accommodation facilities up to the standard of 59 international competitors 10. Transport and infrastructures 63 11. Developing skills at every level of the sector 67 12. Attracting international investments 71 13. Summary of the actions timing 77 PART THREE: THE BEGINNING OF A JOURNEY 14. Government’s priorities and short-term actions 83 15. Conclusions 85 16. Sources 17. Methodotological appendix 89
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2. PROLOGUE Tourism is one of the economic sectors that have registered a considerable increase globally in the last ten years. In fact, tourists’ expenditure for travel abroad has doubled and it is forecast that it will increase by 50% in the next ten years. In 2011, more than a billion people have travelled abroad on holiday. Italy still retains a prominent role in international tourism, but finds it increasingly difficult to keep pace with the speed of growth in the sector and tends to lose its market share to its traditional European competitors, showing an evident loss of competitiveness. However, tourism represents for our country a significant sector, with an important role in the national economy and it generates more employment opportunities in comparison to industrial sectors that are considered as priority. The contribution of tourism to Italy’s gross national product amounts to over 130 billions of euros (about 9% of the national production) and the number of people employed in this sector are about 2,2 millions (one in 10 workers). Tourism is also an expression of a relevant potential in terms of communication and cultural integration, two important elements in a world that is ever more global. Furthermore, tourism offers great opportunities to enhance our extraordinary historic and artistic heritage, both in terms of the communication of territorial identities and also in terms of attracting new investments for its conservation and revaluation. The studies clearly show the critical points of the Italian tourism industry, just to cite some: governance problems of the sector, extremely fragmented promotional activity abroad and gradual marginalizing of Enit, small operating companies, limits in being able to offer competitive tourism products, insufficient infrastructures, inadequate personnel training for the global market, difficulty in attracting international investments. In the face of these critical points, the strategic plan proposes some guidelines and pinpoints a relevant number of actions to take that could rapidly improve the competitiveness of our national tourism sector. Necessary prerequisite of the re-launch of this sector is a radical change in the approach to the problems of tourism that no Government has ever put at the centre of its agenda. Tourism has never been considered as an investment for the development of the Country. A glaring example: tourism never had a relevant role in the various plans for the development of Southern Italy presented by various governments. It is necessary, therefore, to initiate a cultural shift, starting by considering tourism a great opportunity for the Country and coordinating the necessary efforts to bring to the surface this hidden potential. The unrivalled wealth of “tourist resources” of the Country should not induce a naïve conviction that international tourists will continue to arrive spontaneously; in fact, as demonstrated by numerous researches, international travelers look for an organized offer and, even if Italy represents for many reasons the most desired destination, often the final choice rewards other destinations seen overall as more affordable or more “easy”. To compete in the international tourism market, it is necessary then to comprehend what tourists really want and be able to offer modern products, taking into account that the tourist experience starts well before the booking and terminates well after returning home.
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This strategic plan constitutes the first step to address this evolution with the aim to consolidate the competitive advantage of Italy and to contribute to the economic development and the creation of new jobs. According to some conservative forecasts, the actions to be taken outlined in this plan can result in an increment of approx.30 billions of euros of GDP in 500.000 new jobs within 2020. It is an opportunity that the Country cannot afford to miss and an imperative responsibility for the future generations. In addition to the proposed activities, the plan also proposes a new methodology through identifying a clear direction in which to go using a coordinated approach by all parties, unavoidable pre-condition to operate efficiently in a global market. Tourism cannot be viewed anymore as a matter of exclusive interest of merely the sectors directly involved in it. This plan will be adjourned every two years, its scope encompassing five years, the aim is for it to become an essential tool for both government institutions and individual operators. Tourism can give a concrete contribution to our Country to return on the road of profitability and growth, on condition that the necessary resources will be assigned to this sector and both public and private operators show a firm involvement in it. PIERO GNUDI
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PART ONE
ANALYSIS OF THE TOURISM SECTOR IN ITALY
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3. THE ROLE AND POSITIONING OF ITALY IN TOURISM 3.1 Growth of international tourism International tourism is experiencing an assertive, constant and over a long period trend of growth. This trend was already evident since the 1980s and growth is expected to be sustained also for the next twenty years to come. In 2011 World Tourism Organization estimated that in 2030 passengers flows will double the amount of tourists so far achieved – from 280 millions passengers in 1980 they raised to 900 millions in 2010 – to reach 1.8 billions per year. This implies an expected average growth rate of 4% in the 50 year period (1980-2030). (Figure 1).
Furthermore, it is necessary to observe that the described growth was spread out all over the globe, both in terms of inbound and outbound tourism (Figure 2). By focusing the attention on outbound tourism, it is however possible to see different growth rates among areas. In particular, with reference to the most relevant areas by dimensions such as Europe and Asia-Pacific, it is notable that the average growth rate of outbound travelers of the Asian region for the period 1980-2030 is approximately two times the European one (6% yearly vs. 3%), hence representing a population of assured interest for the strategies of our country.
Source: WTO
Figure 1 – International tourism, world
0
+4%
2030F
International tourists (Mln)
2020F
1,500
500
1,000
2,000
2010200019901980
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3.2 Tourism: an essential opportunity for Italy Tourism constitutes a fundamental sector for the economy of the Country for two main reasons: primarily has a strong incidence both in terms of GDP (about 9%) and employment (about 10%); it is also a sector, perhaps the only one, where Italy has a strong and durable competitive advantage in the years to come. However, in other Countries (such as France and Spain for instance) the contribution of tourism to the economy is larger both in relative and absolute terms. (Figure 3).
Source: WTO, The Boston Consulting Group analysis
Figure 2 – International outbound tourism by region of origin
Europe
Outbound tourists(Mln)
Africa Asia & PacificAmerica
0
200
400
1,000
Middle East
800
600
1995
1980
2010
2030F
CAGR'80 – '30
6% 3% 6% 3% 5%
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In addition, in the past years the Italian tourism sector has lost its market share in the global scenery: from prime position within the European countries at the beginning of the 1980’ and carried up to the half decades of the 1990’, today holds only the third position (behind Spain and France). A certain decrease of the market share can be considered acceptable, especially in relation to the growth of the extra European markets, but for Italy the decrease has been higher if compared to its direct competitors. (Figure 4).
Figure 3 – Tourism impact on GDP and employment
12.7%
Jobs in Tourism / Overall jobs (%)
20
15
10
5
0
It
9.7%
Fr
10.4%
Sp
8.6%
Fr
9.3%
Sp
14.9%15
10
20
Tourism GDP / GDP (%)
5
0
It
1. Total impact of Travel & Tourism (includes direct, indirect and induced impact)Source: World Travel & Tourism Council (WTTC) –Travel & Tourism Economic Impact 2012
160 185 136
Tourism total impact1 del
Tourism(€ Billion)
2.3 2.8 2.2Tourism
contribution (Milions of jobs)
Tourism impact on GDP, 2011 Tourism contribution to employment
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When talking about this sector it is important to remember that the trend of International tourism will continue to be positive because it is dragged by demand of those economies with a high growth rate, whose role will be even more significant for both outbound and inbound. The role of Europe in the sector is therefore destined to reshape and it is today very important for Italy to defend its own market share and win over shares of international travellers coming from Countries in rapid expansions. and, even though at present their figures are not yet significant, they are destined to be within a short period of time, growing together with the economies of their Countries. With this foreword, it is important that the Government decides to put at the centre of its agenda a series of selected strategies for the development of tourism, by recognising its top role for the growth of the Country. The realization of this Strategic Plan represents, as a consequence, a unique occasion for the entire sector and in particular for the South of Italy. Italy has in fact an enormous unexpressed potential, mainly in the South. For instance, by comparing the tourism development of the Balearics with Sicily, some concerning evidences emerge. The two territorial realities have a coast extension in Km very similar but the Balearics generate a number of European night stays eleven times higher than Sicily. The data is even more disconcerting if we consider the historic, artistic, cultural and gastronomic heritage of Sicily compared with the Spanish Islands (Figure 5). With this data, given as an example, it is possible to realize the number of occasions lost by Italy and so the necessity to recover the competitiveness, without further time to be wasted.
Figure 4 – Inbound tourism market share evolution
Source: "Quindici anni di turismo internazionale dell'Italia" – Bank of Italy
10
8
6
4
2
0
201020052000199519901985
Germany
UK
France
Spain
Italy
(1.3)
(1.9)
(3.7)
(1.1)
(2.3)
%
1982
Inbound tourism market share (Tourism expenditure)for major European countries, %, 1982 - 2010
∆ market share2010 vs. 1982
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Continuing with the example, in order to evaluate the structural weakness factors of the Italian tourism industry, it is interesting to further analyze the differences between Sicily and the Balearics, considering the flights connections (Figure 6); well, by considering a “typical week” in the summer season, low cost flights from Germany (the most relevant European nation for outbound tourism) directed to the Balearics are about 13 times higher that those directed to Sicily.
Shoreline km ~1.430 Shoreline km ~1.500
0
50
40
30
20
41.2
10
Millions of nights
2010
0
2010
3.7
50
30
20
10
Millions of nights
40
Source: INE (Instituto Nacional de Estadistica) Encuesta de ocupaciòn hotelera 2000 e 2010; ISTAT; The Boston Consulting Group analysis
Figure 5 - European international tourists in Baleari Islands and Sicily
Baleari Island Sicily
Note: included carriers are: RyanAir, easyJet, AirBaltic, Belle Air, Flybe, Germanwings, IcelandAir, Intersky, Jet2, JetAirfly, NIKI, Norwegian Air Shuttle, OnurAir, PegasusAirlines, SmartWings, SunExpress, Transavia, TUIfly, Vueling, Wizzair, XLairways, Air Arabia Egypt, WindJet. Source: OAG database, The Boston Consulting Group analysis
Canarie
Baleari
Overall low cost flights: 260Overall low cost flights: 522
4
3
4
15
12
51
3
19
6
40
36
13
13
3
8
3
3
2
14
21
12
3
28
25
10
282
16
20
191
12
10
6
86
30
3
6
4
6
Overall flights to Baleari:
223
Overall flights to Sicily:
17
11
Figure 6 - Low cost flights from Germany to Spain or Italy during an average summer week (July 2012)
Low cost flights from Germany to SpainWeek:16th-22nd July 2012
Low cost flights from Germany to ItalyWeek:16th-22nd July 2012
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International travellers are extremely important for the Italian tourism sector because represent the engine for growth as internal demand is destined, in the best case scenario, to remain stable or to grow at very contained rates. It is a trend that has already happened in the past: if considering the number of nights bought in hotel as an indicator for tourist demand, in the period 2005-2010 the number of nights bought in Italy by Italian travellers have grown by 0,3% year on year, whilst those bought by international travellers have grown by an annual rate of 2,2% (Istat, 2012). This potential growth rate is very high when considering the intentions of purchasing tourism in Italy; a recent study shows how a large sample of international buyers has on average expressed a high intention to increase the business volume in Italy and to intensify the efforts for developing business relations with Italy. At the same time the same sample of buyers has highlighted a series of difficulties in the purchasing process of the Italian tourist product, due primarily to an insufficient organization of the offer. 3.3 The competitive position of Italy in the international tourism scenario 3.3.1. The market context In order to evaluate the competitive position of Italy it is first of all necessary to define the boundary of the tourist market in which the Country operates; in this context a competitive arena has been identified and includes the western European and Mediterranean Countries (Turkey, Egypt, Tunisia, Morocco, Croazia, Cyprus). Having considered that in 2010 about 900 millions of international travellers have been recorded on a global scale, of those about 400 millions have stayed in the competitive arena of Italy, generating a total expenditure equal to €286 billions (if we remove the expenditure of Italians abroad the total equals to €270 billions). For the period 2010-2020 the expected growth of international tourism in Italy’s context market is 2,9% yearly in terms of number of travellers and 4,8% yearly on expenditure. (table 7). It is relevant to observe how about half of this growth in terms of expenditure should relate to medium to long haul travellers named geographically speaking, emerging Countries (in particular the BRIC Countries and from the Gulf) that in the last decade have expressed only 30% of growth.
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When planning the strategy for the Italian tourism sector it is also necessary to consider not only how much the travellers of different countries will contribute to the growth of the competitive arena context, but also the different habits of spending when varying the countries of origin. Table 8 clearly shows the existence of strong differences in terms of expenditure among tourists of different ethnic and geographic origin. From the tourist average spending point of view, calculated in the ratio between “outbound expenditure” and “outbound departures” stand out tourists from the Gulf area (about €2500), the Brazilians (over €2000) and the Chinese (nearly €1500 – excluding the travelling between Cina, Hong Kong and Macao). As it has been already highlighted, Italy is only the third in its arena context, with a market share of international travellers of 11% (44 millions), behind France (19% share) and Spain (13% share). An evaluation of Italy’s competitive position among other countries can be done by comparing arrivals, even though it is clearly an improper estimate, does not include spending and finally do not consider travellers in transit. In this calculation, as you can see in table 9, Italy is never a leader, not for the short haul number of travellers (western Europe) nor for the long haul (even when including the memorable markets such as Japan and United States and also the emerging markets such as Russia, China and from the Gulf area). The emerging picture is that of a situation of relative leadership and most of all, independently from possible arguments on the punctual interpretation of single indicators, of a situation of real vulnerability in the short term, against very significant opportunities.
Short haul
1. Mediterranean area includes: Egypt, Turkey, Morocco, Tunisia, Cyprus. 2. Brazil, India e China.Source: WTO, The Boston Consulting Group analysis
(M) (M)(M) (%)(M) (% tot) (%)(M) (% tot)
Western Europe & Med.1 305 265 365 60 46%1.4%40 53% 1.8%
Eastern Europe 25 11 45 20 15%8.4%14 18% 6.0%
Rest of the world 25 15 40 15 12%5.3%10 13% 4.9%
North America 21 21 25 4 3%(0.2%)(0) -1% 1.8%
Russia 11 2 30 18 14%20.3%10 13% 10.1%
BIC2 6 3 17 11 9%7.0%3 4% 11.0%
Japan 4 5 3 (0) 0%(3.7%)(2) -2% (1.2%)
Gulf (GCC) 2 1 4 2 1%7.3%1 1% 7.2%
Medium - long haul
Total ~400~323 ~528 ~129 100%2.1%~75 100% 2.9%
Short haul 330276 410 801.8%54 72% 62% 2.2%
Medium – long haul 69 47 119 50 38%3.9%22 28% 5.6%
Italy - outbound 23 18 28 5 4%2.5%5 7% 2.0%
Overall Total ~376~305 ~500 ~124 96%2.1%~70 93% 2.9%51%
From emergingcountries
Figure 7 – International tourism expenditure towards competitive arena
Region of origin 2000 2010 2020F2000 – 2010∆ CAGR
2010 – 2020F∆ CAGR
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3.3.2. Global trends
Figure 8 – International tourism expenditure in western Europe and Mediterranean
Average expenditure / Tourist (€)1
Without travelling expenses to reach foreign countries (2010)
3.000
2.000
1.000
0
200150100500
Gulf2
Japan
ChinaIndia
Brazil
Russia
North
EasternEurope
MediterraneanArea3
UK
Germnay
Western Europe5
Overall tourists expenditure(€ 50 B)
NMedium/Long haulShort haul
1. Defined as ratio between "Outbound expenditure" and "Outbound Departures”. 2. Gulf Cooperation Council (GCC), includes Saudi Arabia, EAU, Qatar, Bahrain, Oman, Kuwait. 3. Turkey, Egypt, Tunisia, Morocco and Cyprus. 4. Includes USA and Canada.5. Includes Scandinavia. Note: China does not include flows between China, Hong Kong and Macao; fixed exchange rate for 2010 (€/$ = 1.3252), nominal values.Source: WTO Barometer 2012; The Boston Consulting Group analysis
Internationaloutboundtravellers(2010, millions)
Note: Russian citizens do not need VISA to go to Turkey1. West Europe and Mediterranean are includes Turkey, Egypt, Tunisia, Morocco and Cyprus. 2. Market share considering travelers (considering the total amount of international travelers within each region of origin). 3.Families owning at least 250 €k managed by banks (Equities, Bonds, Cash & Deposits, ...). 4. Adults, Seniors and Young people. 5. Gulf Cooperation Council (EAU, Saudi Arabia, Oman, Qatar, Bahrain, Kuwait. 6. Brazil, India and ChinaSource: WTO; The Boston Consulting Group analysis
Medium-Long haul
Total
Short haul
13%21% 15% 11%
11%
(Millions)
~400
North America 19% 16% 14% 14%20.7 2.9Japan 17% 10% 10%17%3.6 0.3
West Europe Affluent3
Gulf (GCC5) 35% 16% 12% 8%1.8 0.1
Russia 27% 25% 5%5%11.3 0.6
~44 19% 13% 11%
East Europe 21% 17% 17%8%24.9 4.3
Rest of the world 6%24.9 1.4
West Europe Others4 10%305.2 33.0
Brazil
India
China 31% 17% 11%
25% 19% 13%
29% 14% 13%1.8
1.5
2.9
0.2
0.2
0.1
13%
13%
5%
Affluent(Millions)
Figure 9 – Italian market share on international tourists in western Europe and the Mediterranean area
Region of originWest Eur. & Med.1
ItalyDestination coutries market share2
Italy#1 #2 #3
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In order to understand the competitive reason just described it is also opportune to consider some trends on an international level. The last decade has in fact highlighted major changes that have indiscriminately engaged tourism worldwide; they are some global socio-economic “mega trend” that influence and will continue to influence tourism demand on a global scale. Our analysis has identified seven of them, grouped in two macro categories:
A) Evolution in the composition of demand
1. Growth of the global economy and increase of flights connections - New tourist demand from the average emerging class of the RDEs (Rapid Developing Economies) - Multiplications of routes and frequencies of short and long haul flights also thanks to the low cost carriers
2. Increase of the senior European tourism
- European population is ageing and needs a targeted, advanced and innovative offer
B) Evolution in the consumer behaviour
3. polarization of expenditure - The affluent component of the worldwide population is increasing; consumptions of the affluent segment of travel and tourism are typically significant and trading-up type, which means with a willingness to spend much in order to satisfy a certain need. - In the short haul there is as effect that we may define trading-down and trading-up. In other words demand for low cost flights increases and at the same time the demand for high level placement also increases; hence it is needed a very targeted offer (BCG Global Consumer Sentiment Survey 2012).
4. Wellness- Self health
- Fitness, self health and psychological well being are increasing
5. Increase of Internet connections - Online sales of the unsold, particularly hotels rooms at “unmissable” prices (even at peak season) - More disintermediation of physical agencies and tour operators in favor of direct purchases - Consumer opinion/judgement has become crucial for the success of a Product
- The vast penetration of smart phones has amplified the possibility to access the contents (“always connected”)
- Online and social networks presence is crucial to direct the choice 6. Faster lifestyles
- More weekends on the short haul - Necessity of faster connections - Shorter tourist stays
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7. Looking for the authentic experience - custom-tailored trip - in search of a tailor made offer, in line with the consumer specific interests’(such as golf, wine and gastronomy, wellness)
There are three main phenomena on a global scale worth giving particular attention to and that demand to be monitored in the future: the increase sensitivity to risks (safety and healthcare), the reaction to the increasing costs of fuel energy, the attention to environmental conservation and the respectability of the cultural sites. 3.3.3. Segmentation In order to define the action plans it has been necessary to identify a strategic segmentation with the aim to better target the efforts e the resources at disposal. Such segmentation has been implemented on the context market for Italy in two specific ways: primary and secondary1.
A) Primary segmentation Primary segmentation has been realized following three referral points: the region of origin, the age group and wealth. Based on this scheme, 10 main segments have been identified, grouped in two main bands; short haul and medium-long haul. The primary segmentation obtained is synthetically described in Table 1.
1ThepresentedanalysispresentedinthissectionhasbeencarriedoutbyTheBostonConsultingGroupusingdataprovidedbythefollowingsources:WTO,Euromonitor,EconomistIntelligenceUnit,BCGGlobalWealthResearch–May2012,“TheFutureofLuxuryTravel”–HorwathILTM,AmericanExpressPlatinumSurvey2012.
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Table 1. Primary segmentation
Segment Under-segment Expenditure
(€ billion)
% Relevant characteristics of tourists Over
segmentOver total
Short Haul
European Western affluent 61 30% 23%
They know Italy and it is important to provide them a specific reason-why for their return
Other Western European
Adults 85 42% 32% They hardly use tour operator (apart from Senior), and rather choose Internet
Senior 23 11% 9%
Young 12 6% 4% Total 120 59% 45%
Eastern European 8 4% 3%
Medium-low spending budget, but with an increasing level of income. They still have a positive image of Italy
Others short Haul 15 7% 6% Total short haul 204 100% 76%
Medium-long Haul
Rapidly Developing Economies
Russia 8 13% 3% They are primarily newcomer, with specific needs to be satisfied. They still often use tour operators. They are attracted by Italy but they know little about it. Their attention is particularly devoted to shopping
BIC 9 14% 3% Gulf 4,4 7% 2%
Total 21 33% 8%
Mature Far away
North America 15 23% 6% They know Italy and visit it once or more during the course of their lifetime.
Japan 3,4 5% 1% Total Medum-L.
18 28% 7%
Others Lond Haul 24 38% 9% Total medium-long haul 64 100% 24%
Total 268 100% Soon after having presented a definite picture through this first segmentation, the analysis has focused on the market share held by Italy on the key segments. The analysis proved how in the short haul Italy has a market share in line with its average one. Differently, on the medium-long haul Italy appears to be late on the priority RDEs (Gulf and BRIC), with the risk to lose the opportunity of fully taking advantage of their future growth. It is instead satisfactory, at the moment, Italy’s positioning on the mature economies (Japan and North America). In order to have important indication in terms of priority segments, it is effective to intersect the market share 2010 for every considered segment with the growth in value expected in the period 2010-2020. From figure 10 it is clear that, for dimension, average expenditure and growth expected for 2020, the priority segments are European affluent, Russians, Chinese, Indians, Brazilians (“BRIC”) and Gulf. Evidently, in the definition of actions in the Plan it is necessary to keep in mind the needs and the criteria of selection specific for each priority segment.
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B) Secondary segmentation
The objective of secondary segmentation, focused on segments of the short-medium
haul (European and Russian in particular) is that of analysing products and specific cross primary segments. The basic idea is that the majority of travelers in the medium and long-haul purchase substantially the "Italy product" (in some cases the "Europe product"), while the short-haul travelers are able to express more differentiated interests and purchase tourism products in a manner much more selective.
Alongside the more traditional products of the tourist industry (sea, mountains, lakes
and art cities), in the course of the study some significant demand segments emerged, defined on the basis of specific interests and needs. Some of these are clearly supported by international mega-trends, such as "fitness and active sports" (golf, skiing, cycling, etc.), "well-being", "religious tourism", "gastronomy" and "shopping".
With regard to the analysis carried out aimed to assess these new segments, by way of example we report some relative information on: i) fitness and active sports, ii) well-being and self-care, iii) religious and iv) shopping.
i) Fitness and active sports. In this tourism segment it is necessary to further
distinguish the different categories, because the diverse categories under sport generate different markets in which Italy has a heterogeneous position. Hereunder we outline, for example, golf, skiing and cycling.
• Golf tourism in Western Europe generates a market share of € 3.6 billion, of which
Italy shares only 7%. The principle cause for this can be traced back to the inability to attract international tourist-golfers, with an average expenditure per traveler in line with the European average. It also takes into account, for example, that the cost for international tourists-golfers per golf course in Italy is equal to one-eighth as
Figure 10 – Tourism expenditure expected growth and current Italian market share1 on primary segments towards West Europe and Mediterranean area
Expenditure growth '10-'20F (CAGR%)
15
10
5
02520151050
4Japanese
22
NorthAmericans
15
Chinese
4
Indian
10Gulf3
26Russian
17EastEuropean
14West EuropeYoung people
32
West EuropeSenior
101 West Eur.Adults
96West Eur.Affluent4
1. Market share on international tourism expenditure. 2. West Europe and Mediterranean area includes Turkey, Egypt, Tunisia,Morocco and Cyprus. 3. Gulf Cooperation Council (EAU, Saudi Arabia, Oman, Qatar, Bahrain, Kuwait). 4. Families owning at least 250 €k managed by banks (Equities, Bonds, Cash & Deposits, ...).Source: WTO; The Boston Consulting Group analysis
Expected total epxenditure towards the Italian competitive arena 2020F (€20 Bn)
Italian market share (expenditure) 2010 (%)
Medium-Long Haul
Short Haul
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compared to the Portuguese. The reason for this weakness in a sector which is certainly interesting in relation to expenditure per capita depends on the small number of golf courses compared to its main European competitors, their low prevalence in the territory (mainly in the South, where it would a necessity to develop products Golf + Ocean) and the lack of cluster of golf courses (it is known that golf tourists prefer destinations where there are concentrated numerous golf courses that allow a certain degree of selection on the trip).
• Ski tourism in the Alps creates a market of ~ € 16 billion, of which Italy captures
only 5% due to an offer which is dated (very few young internationals in Italy) and mainly orientated towards national tourism.
• The market for cycling in central and southern Europe is estimated at around € ~ 2
billion, of which 20% in Italy, so this is an area of strength that would necessitate specific investments in order to consolidate a position of leadership.
ii) Well-being and self-care. In Western Europe and in the Mediterranean wellness
centres (SPA) registered revenues of about € 4 billion from international tourism, 6%. This low market share is due to an average expenditure per international traveler much lower than the European average (~ 120 € vs ~ 270 € per traveler) and depends on an offer certainly not at the level of the leading countries of the segment (eg Austria). Even the spas which in Italy could attract a significant share of this segment of tourism often are not equipped to realize their potential.
iii) Religious tourism. A first assessment of the religious tourism market in Western
Europe is estimated at € 7.5 billion. Italy attracts 30% of this segment, but it is second behind France. These findings are surprising considering the number of major destinations for pilgrims and religious tourists present in Italy.
iv) Shopping for many tourists originating from medium-long haul destinations, shopping has an extremely significantly higher rating than that of European tourists, for example, according to the survey "Chinese consumer travel survey" by The Boston Consulting Group, Chinese tourists allocate 40% of their travel spend in this activity2. Italy, representing excellence in fashion and style, must fully exploit this opportunity. 3.4 The structure and positioning of the Italian offer 3.4.1 The general framework
The tourism market in Italy generates 375 million overnight stays. Of these,
approximately 55% is generated by coastal areas and art cities and about 44% (165 million overnight stays) is produced by international tourists (Figure 11).
2Excludingtravelcosts.Source:BCGChineseConsumerTravelSurvey,July2010.
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As already pointed out, during the last decade nights purchased by foreigners increased most significantly compared to those purchased by Italians. Specifically, from 2000 to 2010, overnight stays by foreign tourists increased at a rate nearly three times more than those of Italians, rising from 140 million to 165 million overnight stays, with a growth rate of 1,6% compared to 0.6 % of those of Italians (table 2). It is a further confirmation of the fact that the strategic choices of the tourism sector must on the one hand aim to strengthen domestic demand, but on the other hand must point towards growth in international demand.
Table 2. Nights spent by tourist in Italian accommodation establishments Absolute value (millions) Percentage 2000 2010 Cagr ‘00 – ‘10 2000 2010Italian tourists 198 210 0,6% 59% 56%Foreign tourists 140 165 1,6% 41% 44%Total tourists 339 376 1,0% 100% 100%
As shown in Figure 9, the most attractive tourism product for foreign travellers is art
cities, a true global magnet of the Italian tourist offer. In this category, the U.S. is the first customer with 8.1 million overnight stays, followed by Germany (7.6) and France (4.3). With regard to other classic components of the Italian offer (sea, lakes and mountains), the Germans are always the first customers (Figure 12).
6
7
1
27(7%)
14
overall%
100
50
0
Others1
63(17%)
44
4
8
6
19
1
Mountain
49(13%)
418
1
Art cities
94(25%)
38
34
30
Sea side
116(31%)
78
34
5 122
35
375 millions,
year 2010
~55%
130
210
Figure 11 – Domestic and international nights in Italian accommodation establishments
Lake
Termal bath
Hill
165 M~44%
14(4%)
13(4%)
1. Includes cities not otherwise classified, and minor towns.Note: Europeans include West Europe, East Europe and Mediterranean area; Extra-Eu. includes North America (USA and Canada), Japan, Russia and BIC, GCC (EAU, Saudi Arabia and Kuwait) and other minor European or non European countries (RoW).Source: Istat, The Boston Consulting Group analysis
Non – Eur.
Eur.
Italians
Region of origin
Total
21
Tourism offer analysis cannot be disregarded by the characterization of regional type. This
provides a very important perspective, because it allows the observance of how five regions (Veneto, Trentino Alto Adige, Tuscany, Lazio and Lombardy) develop independently ~ 70% of overnight stays by of the foreigners. This is because these regions offer three of the strongest products of our country: the "Four Top Cities" (Rome, Venice, Florence and Milan), Lake Garda and the Dolomites.
Aggregatingtheregional data it isalsopossible to achieve an analysiswhich synthesizes
the structure oftheItalian offer,consideringthreedifferent supra-regional groups:•thetopfiveregions(Veneto,Trentino AltoAdige,Tuscany,Lazio,Lombardy)•the five majorRegions of the South(Campania,Puglia,Calabria,SicilyandSardinia),•the other tenRegions.
Figure 13 shows this aggregation highlighting two useful informative categories to help
comprehend the strong asymmetry that characterizes the tourism sector in the country: • the first five regions have generated 91% of the growth in the period 2000 to 2010, • the Southern regions, while possessing invaluable historical assets - cultural or scenic, weigh only 12% of the total and in the decade and captured only 5% of the total Italian growth.
Art cities Sea side Lakes Mountain
Country Nights Country Nights Country Nights Country Nights
USAGermanyFranceUKSpainJapanNetherlandSwissRussiaAustria
SubtotalOthers
Total
8.1 7.6 4.3 4.2 3.6 2.0 2.0 1.5 1.5 1.3
36.019.8
55.8
(Mln)
GermanyAustriaSwissFranceNetherlandUKRussiaCzech Rep.USAPoland
SubtotalOthers
Total
11.7 4.0 2.8 2.5 2.3 1.9 1.6 1.5 1.1 1.0
30.28.4
38.7
(Mln)
GermanyNetherlandUKAustriaSwissDenmarkBelgiumFranceUSAIreland
SubtotalOthers
Total
9.1 3.7 1.6 1.0 0.8 0.7 0.6 0.5 0.3 0.2
18.51.8
20.4
(Mln.)
GermanyPolandUKCzech Rep.NetherlandBelgiumSwissAustriaFranceRussia
SubtotalOthers
Total
9.7 1.2 0.9 0.9 0.8 0.7 0.7 0.6 0.5 0.3
16.32.5
18.8
(Mln)
Source: ISTAT, The Boston Consulting Group analysis
Figure 12 - Top-10 visitor countries by nights in Italian accommodation establishments (2010)
22
In addition, in a decade of strong growth in the European market, ten Italian regions have declined or grew less than 1%. To this is then added an important data of general characterization: in the last ten years the number of nights of international tourists in Italy grew by only ~ 1.6% per year, while in the market referred to the annual growth rate was 7.8% (loss of market share in Italy reflects the combined effect of these two elements).
3.4.2 The sea
The Italian “sea” product is in deep crisis due to the lack of attraction it nurtures
towards international tourism. The main reason is the presence of an alternative offer which is extremely aggressive, more modern and less expensive in different areas of the Mediterranean Basin (Spain and then, but with growing trends, other countries such as Turkey and Croatia). Figure 14 clearly shows that in the period 2000-2010 the number of travelers in the countries of the Mediterranean Basin is growing at a very strong rate (8.2%), while in Italy the sea product has even registered a slight decline.
Figure 13 – International nights1 in Italy
Millionsof nights1
200
150
100
50
0
95
26
Top 5 Regions 75%
Other Regions 16%
2010
20
118
27
2000-2010 growth
1(5%)
23 (91%)
2000
19 5 big Southern Regions 12%
CAGR2 '00-'10+1.6%
140
25 1651(4%)
1. In accommodation establishments. 2. Compound Annual Growth Rate.Note: accomodation establishments include hotels, complimentary (camping, rent house, resorts, agricultural acocmodation, youth hostels, holiday homes, alpine hut, other accomodation establishments) and Bed & breakfast.Source: ISTAT, The Boston Consulting Group analysis
Weight
23
Another aspect deserving of attention is the average size of Italian hotels, which are much reduced, especially considering that the hotel industry is undergoing a global trend that sees the development of large-scale structures, mostly concentrated in large hotel chains.
The phenomenon is very clear observing how, against almost 34,000 Italian hotels,
Spain and France (our direct competitors) we have respectively 15,000 and 17,000. In addition, focusing on the aspect of dimensions, the average capacity of an Italian hotel is 66 beds, compared with 94 for a Spanish one and 71 for a French one.
But the most significant comparison is perhaps that which concerns the average
number nights per bed, an index of “productivity” per bed. Italy has an average number of nights per bed equal to 109 compared to France 190.
Table 3 focuses on the analysis of marine structures, highlighting the lack of capacity
of the structures in Southern Italy, when compared with, for example, those in Spain.
Table 3. Comparison between average capacity of sea hotels (year 2010) Italy Spain Top-3 regions product sea3
Campania 68 Andalucia 102Calabria 75 Canaries 417Sardinia 116 Baleari 259
Average per country 66 94
3 In terms of nights of Italians and foreigners in accommodation establishments. For the Italian Regions, Campania 6.5M nights,
Calabria with 4.8M Sardinia with 4.8M (followed by Sicily with 4.4M and an average capacity of 95 beds per exercise. Abruzzo with 4.3M and an average capacity of 48 beds, Puglia with 3.5M nights and an average capacity of 91 beds). For Spain, the Comunidades autónomas.
Country ∆ '10 vs '00
(M) (%)
2000 2010
(M) (M)
Mediterranean Area1
Turkey 19.0 13.27.8 26.8
Egypt 8.5 10.15.3 13.8
Tunisia 1.8 3.15.0 6.8
Morocco 2.6 7.82.3 4.9
Cyprus (0.5) (1.9)2.6 2.2
28.8 63.5 34.7 8.2 %
1. Includes Croatia, usually considered within West EuropeSource: World Tourism Organization, The Boston Consulting Group analysis
Figure 14 – International inbound travellers dynamic towards Mediterranean countries
CAGR
+120%Notti in ItaliaProdotto Mare
39.2 (0.6) (0.1)%38.7
~0%
Croatia 3.2 4.55.8 9.0
24
Finally, always with respect to accommodation, the development of the market for a second home is already mature: the total number of nights in the second home (about 670 million) is about twice that in hospitality establishments.
3.4.3 Italy’s position
Considering the size of international demand, Italy's position still remains very strong. This finding is confirmed by a study of Isnart (2011) which showed that in general terms Italy is still the most popular destination by far, followed by France and Spain. With regard to "BRIC", Italy is the country most in demand in Russia, India and China, while it is in second place for Brazilians, preceded only slightly by France.
A detailed analysis of the reasons for this success is provided by the study "Buy Italy",
University of Bologna, carried out on ~ 350 international buyers. The study reveals how Italy has in the relationship between quality-price (value for money) in infrastructure and hospitality, major weaknesses with respect to global competitors (Figure 15).
However, it is worth considering that Italy is well positioned with regard to art, history, gastronomy, natural attractions and shopping. This very strong positioning in the mind of the international tourist is all the more true for tourists from BRIC. It is evident, therefore, that Italy needs to exploit its strong brand and its perceived value and enhance it to the fullest. 3.4.4. Districts and priority tourist destinations
1. Worldwide survey: Europe represents 61% of the sample, North America 20%, Asia 12%, South America 3% and Oceania 3% (~ 350buyer)Source: "Acquistare Italia", Paper by Department of business of the University of Bologna, in collaboration with the Department for development and competitiveness of Tourism
2,5
3
3,5
4
4,5
5Nature
Art & Culture
Food&Wine
Shopping opportunitiesHospitality
Infrastructure
Quality/Price
Infrastrutture e Ricettivo
ItaliaFranciaSpagna
Figure 15 – Comparison between Italy, Spain and France1 on relevant features for tourists (according to a worldwide survey)
25
In Italy there are about 150 districts or tourist destinations, of these, about 40 appear to have a significant growth potential and attraction, especially in terms of the ability to attract international tourists.
In order to make a scale of first priorities it is necessary to evaluate individual districts
along two axes: the first is the total number of nights, the second is their potential. In doing so, they emerge as important and to be “cultivated” the so-called Global Magnets (Rome, Venice, Milan, Florence), the “Best Sellers” (Lake Garda and Alto Adige), the major sea products in difficulty and about thirty districts of medium-small with high potential (Figure 16).
This is clearly a first prioritization exercise of the districts, the most important from
the point of view of methodology, and not of actual choices; in this regard it is necessary to deepen the analysis in order to be able to launch pilot projects for the development of these destinations
Clearly, the analysis of the products with the greatest potential is not sufficient to be able to develop new districts of attraction internationally in a competitive and crowded market. In order to be able to move from analysis to projects, it is necessary to firstly prioritize the destinations or districts on which to focus their efforts, and secondly to place the identified products accurately, in terms of responding to the needs of the segments of demand most interesting for Italy (affluent Europeans and travelers from BRIC). The development of these products will depend then on the effectiveness of the system of offer in terms of promo-marketing, also through digital channels. It is quite evident that this approach opens up the issue of coordination between the subjects, in particularly among policy makers and the need
Figure 16 – Italian tourist districts by dimension and development potential
1. Includes almost every district hosting less than 0.3Mln international tourists in 2010Note: Potential is defined through a quali-quantitative analysis, according to district dimension, foreign/ Italian tourists ratio, international tourists growth and qualitative elements (e.g.: uniqueness, natural or artistic assets, growth enablers presence, ...)Source: ISTAT, Working Group of the Ministry
Nights(Mln 2010)
Potential for internationaltourism
E.g.:• Costiera Amalfitana• Naples+Pompei+Gulf• Smeralda Coast• Cortina, Cinque Terre• Pisa, Siena, Chianti
• Rome• Venice• Milan• Florence
• Alto Adige• Garda lake
• Romagna seaside• North-East seaside
30 ~110 ~40
4 ~60 ~45
xx # Districts Nights (Mln) Inbound nights (Mln)
2 ~50 ~30
2 ~50 ~20
30 ~70 ~20
70 ~30 ~5
1° prioritization1° prioritization
Average expenditure
increase
656030
MAX
25MIN
20151050
Global"Magnet"
Big seaside products to defend and
revamp
Best Sellers
Medium-little districts with high
potential
Medium-little districts with
average development
potential
Little districts1
with low developmetn
potential
MED
26
to find a new way of defining and managing development policies that involve the central State and the Regions (which will in turn find new ways of integrating the offer).
27
4. CRITICAL ELEMENTS FOR TOURISM POLITICS IN ITALY
Based on the analysis, research, interviews and consultation of all the available documentation, some critical issues have been identified for the definition of a policy for the development of tourism in Italy. These challenges relate to the assets of the country from the point of view of tourism, distinguished between "permanent assets" and "temporary assets", whereby "permanent" means the Italian areas with recognized prestige and notoriety (religious, naturalistic, gastronomic and artistic-cultural assets) and where "temporary" means the current positioning of the country (for example, lifestyle and fashion), the socio-political context and the large events or exhibitions that take place there (Figure 17).
The following is a breakdown of the level of criticality that emerged, grouped by single intervention lever.
a) Governance of Tourism
• This is the most critical principle appraisal that all the operators of the sector report. In terms of a lack of a strong central governance, necessary to make things happen in a cross-sector.
• Marginality in the tourism sector in the development policy of the country and
fragmentation of the decision-making between Government and regional/provincial/municipal authorities
• Minister without portfolio, with few levers and economic resources necessary to guide in an effective manner the development of tourism.
• Lack of capability to affect the local offer within global competitiveness.
Figure 17 – Italian context: strong assets, but critical elements on intervention levers
Governanceof Tourism
Communicationand promotion
Products
Transportationand infrastracture
Trainingand skills
Accomodation
Sales channels
Regulatoryframework
Investments
Source: Working Group of the Ministry
Socio-politicalcontext
(stability, safety ...)
"Temporary"assets
Worldwideevents
(Olimpic games,exhibitions,
Expo, ...)
Lifestyle, fashion,
shopping, ...
"Permanent"assets
Gastronomicassets
artistic-culturaland historical
assets
"Religious"Asset
Areas of improvement
Areas ofstrength
Critical elementson all intervention
levers
Areas ofstrength
28
• Lack of a reliable database and efficiently updated and the difficulty in reading tourism data.
• Lack of structured mechanisms of co-ordination between Government, Regions and Associations oriented to “make things happen”.
• Difficulty in monitoring ongoing actions (or launch), of investments and expenditure linked to the development of tourism.
b) Communication and promotion
• Role of the Agenzia Nazionale del Turismo (ENIT) insufficient. • Lack of coordinated promotion at the level of “Sistema Italia”. • Lack of digital strategy of the country in terms of tourism. • Absence of a “Sales Management Italy” to take care of setting priorities and
develop key products (support to the Regions in product development, including interregional, and in the definition of economic targets that must be met.
• Insufficient use of international cinema to promote tourism in Italy in countries that are less familiar with the Italian culture.
• Low sensitivity towards the consequences of misconduct and opportunistic for the tourism sector (e.g. fraud).
• Passivity in communication and Public Relations (e.g. during crisis management).
c) Sales channels
• Insufficient use of digital sales channels. • Lack of structured accord at a national level with tour operators outbound
international. • Discrepancies between the rating systems of hotels (e.g. the “stars” system”). • Strong fragmentation of the product offer and services for incoming.
d) Products
• Lack of central co-ordination with Regions on what products to develop and promote on the segments of priority of demand.
• Absence of a plan or central thrust in terms of the structuring and promotion of a calendar of events in support of tourism.
• No “APP” service for smartphone/tablet aimed at foreign tourists.. • Lack of priority and focus on products/tourist districts to be developed and offer
not aligned to the needs of the target segments. • Lack of focus on key target segments in terms of size and expense (affluent
Europeans, BRIC e Gulf). • Cultural heritage undervalued both in terms of tourism (number of visitors) and
economically (revenue per tourist) with respect to all international benchmarks. • Lack of innovation in tourism products. • Accommodation and infrastructure scarcely adequate to accommodate
international conferences. .
e) Accommodation • High proportion of outdated and obsolete structures. • Low average size of hotels (especially in the segment family/sea product) the
result of investments developed in the fifties and sixties. • Quality and standards vary widely and low reliability of classification systems.
29
f) Transport and infrastructure
• Weakness in the infrastructure necessary to accommodate and host the increasing flow of tourists arriving in the next ten years in the “4 Top Cities” (Rome, Venice, Milan, Florence).
• Connections “last mile” between the airport and final destination (e.g. Quality Fiumicino train, slow train Malpensa, absence of metro at Linate, etc.) inadequate for standard set for international tourists, in particular for medium-high level.
• Amount of direct flights with countries with strong growth inferior with respect to competitor countries (Germany, France, Spain, UK etc.), with regard to national airline companies and foreign companies.
• Number of low-cost flights to Europe less than with respect to competitors. • Valorisation incomplete with regard to destinations with potential for low-cost
carriers. • Quality rail infrastructure focused only on the axis TO-SA. • No segmentation and taxi service standard.
g) Training and skills
• General problem of image and low attraction for the tourism profession for the young.
• Lack of professional schools at the level of Directorship and tourism management (e.g. École Hôtelière de Lausanne).
• Level of professional institutes for Tourism not in line with the needs of the sector.
• Combined effect: professionalism in decline, with negative impact on international travellers.
h) Investments
• Lack of key requirements to attract foreign investment. International investors ask for three main things: fiscal stability, low risk country and structured approach in order to define a “reason why” to invest.
• Low confidence of investors in relation to “partner Italia”. • Fiscal pressure and difficult access to credit determine a potential hold on the
development of investment in the sector by existing companies. • Absence of a structured approach and co-ordination in order to attract tourism
investment, both Italian and foreign.
Regulatory framework • Timing and process for issuing visas is problematical in the face of the number
of requests in arrival from strong growth countries. • Failure to exploit asset and public location destined for tourism investment.. • Bureaucracy perceived as an obstacle to the development of new tourism
districts. • High bureaucracy in the operational management of tourism enterprises. • Margins of the actual tax refund mechanism not addressed to the specialized
operators of the tourism industry sector. • Weight of taxation is not consistent with a view to tourism development (e.g.
penalty coming from VAT rate not in line with competitors). • Absence of efficient mechanisms to encourage the creation of enterprise
networks even in the presence of the phenomena of spontaneous aggregations.
30
These nine areas represent critical scenarios on which it is necessary to dedicate the
highest attention in order to establish a coordinated set of actions to requalify the Italian tourist offer as a whole.
31
PART TWO
ACTIONS FOR THE DEVELOPMENT OF TOURISM
32
5. OVERVIEW OF STRATEGIC ACTIONS 5.1 Holistic approach in defining actions Any action implemented to effectively impact development needs to take into account that tourism and its products are the result of working on all nine levers of intervention illustrated in the previous Chapter, bar none, which is to say: Governance, Communications and promotion, Sales channels, Product range, Hospitality, Transportation and infrastructure, Training and skills, Investments, Regulatory framework.
Italy’s assets certainly represent a competitive advantage because they exert a strong attraction for national and international tourists, but the success of tourism products increasingly relies on the ability to act simultaneously on all the levers. For example, there are recent cases of major tourism investment in Southern Italy (for instance some hotels in Sicily), which did not reach its desired goals because of the weakness of some of the identified targets and, conversely, there are positive examples such as Salento (The heel of Italy), where effective efforts were made on all important levers.
Furthermore, it is crucial to think of the tourist’s experience as an end-to-end process, i.e. from the moment the potential tourist develops a desire to depart until when, upon returning home, the memory of the trip feeds the desire to revisit the place. This way of thinking about a touristic experience is important particularly for Europeans week-enders, who often go back to favorite destinations that bring to mind important memories.
In analytical terms, it is possible to divide the experience of a hypothetical tourist in
five main steps: i) The desire to leave based on preferences and needs (individual, socially defined or
constraints based on external stimuli); ii) The gathering of information needed to make a decision (taking into consideration
that different people use different channels and are sensitive in different measure to the several elements of the tourist offer, such as hotel, transportation, etc.);
iii) The decision of how to purchase and the trend to forgo intermediaries thanks to the popularity of search engines and specific digital applications;
iv) The experience in its many facets, which is not solely based on the product but all the components of the offer: product, total travel time, quality of transportation, quality and services of accommodation, hospitality, etc. (for example, the quality of the relationship with the first cab driver that drives the tourist to the hotel to the farewell of the flight attendant of the airline that flies the tourist back home);
v) The memory and the desire to leave again for a trip, which implies the need to keep alive all positive aspects of the experience, while trying to communicate with the tourists and to provide to them new reasons to return.
This set of steps offers a comprehensive approach to the tourist experience. The guidelines of the Strategic Plan, which are explained in the section below, were identified on the basis of these steps.
5.2 Guidelines and potential impact of the Strategic Plan
33
To deal with the critical condition of the industry and taking into account the end-to-end approach to the tourist experience, approximately sixty concrete actions were identified, some transversal in nature, i.e. with a potential impact on the whole sector, and others specific, which would impact individual segments or destinations.
The actions were grouped into seven guidelines of the Strategic Plan for Tourism
Development in Italy: 1. Governance: strengthening of the support and central coordination. 2. Revamping of ENIT Agenzia Nazionale del Turismo: redesign of its mission and
organization, in line with the best international tourist agencies, with an adequate availability of human and financial resources. Improvement of the offer: focusing on 30-40 priority destination districts, innovation, BRIC and affluent segments (to increase the average expenditure per tourist).
3. Hospitality: upgrading and consolidation. 4. Transportation and infrastructures: evolution consistent with the needs of tourism. 5. Training and skills: redevelopment of training for tourism sector and job appeal. 6. Investments: investment attraction through specific incentives and "zero
bureaucracy.
Generally speaking, these guidelines aim to recover market shares, particularly in key segments. To this end, it is important to introduce goals for these segments and the necessary actions to implement to reach such goals.
Short term: Focus the offer on affluent western Europeans, a key segment in terms of size,
value and appeal that Italy still has over them by, – Creating a quality offer based on programming a calendar of events, centered
around art and shopping as well as food and wine; – Upgrading accommodations as a condition to compete globally; – Increasing quality in order to not compete directly on undifferentiated mass
market, where the system has an uncompetitive cost of labor and real estate market, but with premium products.
Differentiate and enrich the offer for "Other European" segments by, – Providing a richer offer than other competitors (e.g. "Sea + Shopping" or
"Sea + Art" vs. "only Sea"; – Offering new reasons for repeat travelers who know Italy to come back, with,
for example, plenty of low cost deals, such as unsold inventory promoted online;
– Creating products aimed at specific segments of demand for passion and interests.
Medium-long term: Grow in emerging markets, which must represent the key focus for the recovery
of a competitive position by, – Focusing on the specific needs of the different markets (e.g. China) with an
end-to-end vision of the trip (from visa request to return home, to shopping, to logistics, etc.);
– Establishing a dialogue and cooperating with the main tour operators;
34
– Setting ambitious goals for increased market shares (for example, focusing on the Russian and Chinese markets in which Italy holds limited market shares of 5% and 6% respectively, per 2010 data.)
To achieve these goals in an effective and timely manner, a greater coordination is
crucial between the Government and the Regions/Autonomous Provinces, in order to trigger a virtuous circle with trade associations and investors. The Strategic Plan is the same for all stakeholders involved, while the roles are different.
In particular, the Government and the Regions/Autonomous Provinces must play a
role in directing the implementation of the Strategic Plan (compliance with the objectives, time frame, etc.). Furthermore, these institutions should work together by politically supporting guidelines and initiatives, such as helping to bring back tourism at the center of the Government Agenda.
The trade associations should be active participants of the technical task force, sharing
the members’ perspective. In addition, they can facilitate the involvement of its members and provide an active contribution to the implementation of the Strategic Plan.
Finally, investors will play a very important role to the extent in which they participate
in the share capital for the initiatives of interest or contribute to the development of tourism products as outlined in the Strategic Plan, by providing feedback on individual projects, for example. Also, with a coordinated approach, investors may financially support some specific actions of the Strategic Plan, such as the modernization of the accommodations or transportation infrastructures.
Overall, the full implementation of the Strategic Plan has a potential impact estimated at € 30 billion in GDP and 500,000 new jobs in 2020. This is the result of a balanced scenario of market share recovery (from 11% to 13-14% among our target competitors) and increase in the average value for each arrival. Figure 18 shows the expected impact in terms of real GDP and new job creation.
35
An important consequence of this Strategic Plan would be a more even distribution of growth along the boot of Italy, compared to what happened in the past (Fig. 19). In fact, about half of the expected growth relates to products beyond the array of the great Italian tourism products.
Figure 18 – Strategic plan impact on Italian Tourism industry (2020)
Impact on real GDP1 Impact on jobs2
Millions
3
2
1
0
+0.5 M (+22%)
2020 target
2.7
2010
2.2
Considering only internationaltourism growth
€ Bn
200
150
100
50
0
+30 Bn(+22%)
Italians
Foreigners
2020 target
164
90
74
2010
134
90
44
1. Includes direct, indirect and induced impact2. Assuming ~16.000 jobs per GDP Billion generatedSource: ISTAT, WTTC, Bank of Italy, The Boston Consulting Group analysis
36
5.3 Priorities identification
The sixty actions defined in the Strategic Plan are sorted on the basis of priorities with regards to two relevant factors: economic impact and speed of execution. The economic impact was defined on the basis of economic relevance (consumption, investments, off-season travel, etc.), job creation and return on image for Italy. The speed of execution was defined instead on the basis of the number of stakeholders involved (few and homogenous would result in greater alignment), available expertise, and level of complexity and completion time (from a few months to a few years).
This exercise led to the identification of four categories of actions, which are the result
of merging the two dimensions, as shown in Figure 20. Therefore, each quadrant has a fixed number of actions, with a particular economic impact and expected speed of execution, according to the following scheme:
1. The right upper quadrant shows 30 actions, characterized by high economic impact and
high speed of execution. These actions have therefore high priority for implementation, while always trying to improve coordination among all the operators involved.
2. The left upper quadrant shows 20 actions, characterized by high economic impact and medium-low speed of execution. The priority of these actions is to create, as soon as possible, workgroups to coordinate the interests of the various stakeholders and design an implementation plan.
3. The right lower quadrant shows 8 actions, characterized by a medium-low economic
impact and high speed of execution. The priority of these actions is fast implementation.
Figure 19 - Strategic plan impact on GDP and jobs by macro-districts
Macro-districts
1. it includes direct, indirect and induced impact; calculated using 2.7x as GDP multiplier applied to direct contribution derived from internal tourism consumption net of acquisition costs incurred by tour operators, including imported goods. 2. Calculated using app. 16,000 jobs x Bn€ of created GDP. 3. Assuming 10 MlnItalian and foreign overnight stays in 2020, it does not include the impact of investments.Source: ISTAT, WTTC, Banca d’Italia, Estimates and analysis by The Boston Consulting Group
Tourism contribution to job creation2, 2020 target
8 big districs• Top 4 cities• Alto Adige and Garda lake• Romagna and North-Est seaside
30 – 40 districts with high development potential on
international tourism
1 – 2 New tourists destination districts3
Districts with medium-low potential
Total
~ 250 000
~ 200 000
~ 40 000
~ 15 Mld
Impact on real GDP1,€ Bn, 2020 target
~ 12 Mld
~ 2 – 3 Mld
~ 1 Mld
~ 30 Mld
~ 10 000
~ 500 000
37
4. The left lower quadrant shows 3 actions, characterized by a medium-low economic impact and medium-low speed of execution (3 actions). These actions may contemplate a gradual start.
The actions listed in the right upper quadrant, those with high economic impact and high speed of execution, are a set of actions deemed to be all implemented, and able to bring initial results already in 2013. In the following Chapters (6 – 12), the single actions are presented in the order of the four categories described above. The times integrated in the individual tables start from the moment of approval of the Strategic Plan.
Finally, it should be noted that the Strategic Plan is intended as a long-term project, through 2020, but will be subject to a periodic review every two years to make the necessary changes required by ever changing conditions, both internal and external. With this in mind, some of the plan actions are already in the early stages of implementation (e.g. networks of enterprises). For this reason the plan is to be considered already started. A continuous monitoring of the progress of the actions should be carried out at least every six months.
Figure 20 – Action priority identification methodology
20actions
30actions
3actions
8actions
Economic impact
Speed of execution
• Immediate launch of actions / task forces
•First priority: Fine tuning and immediate implementation of actions
•Immediate implementation • Gradual launch (2nd priority)
Source: interviews, Working Group of the Ministry analysis
38
6. RETHINKING THE INDUSTRY GOVERNANCE
This Chapter illustrates the main actions of the Strategic Plan aimed at providing a clear governance for the tourism industry, which is currently fragmented among many parties and therefore unsuitable to introduce the changes needed in Italy to regain competitiveness in a highly globalized sector. The actions are presented according to the priority table in the previous Chapter.
Priority actions High economic impact High speed of execution
Action 1 Revamping of the Permanent Committee for Tourism with Government,
Regions and Autonomous Provinces. Rationale Tourism is a “glocal” industry, which competes internationally with a national
offer, and crucially requires a strong and efficient coordination between Government, Regions and Autonomous Provinces.
Description In a design of efficient collaboration between state and autonomous regions, revamping the Permanent Committee for Tourism (between Central Government and Regions/Autonomous Provinces) as a tool for decision making used to integrate all efforts in order to regain a leadership position. Assigning to the Committee the role to guide and control the implementation of the Strategic Plan in close collaboration with Government, Regions and Autonomous Provinces. Clarifying the role of Central Government and Regions/Autonomous Provinces in light of the “glocal” nature of tourism: global demand fulfilled by a “central connection vs. local offer” approach exploited by Regions/Autonomous Provinces. The committee will consider asking the Regions for resources to be allocated to ENIT - Agenzia Nazionale del Turismo.
Allocated time
6 months
Action 2 Establishment of workgroups with Regions and trade associations for the
implementation of the Strategic Plan. Rationale The implementation of the Plan requires a high degree of coordination at all
levels of decision making (political, technical and operational.) Description Establishing permanent workgroups at various levels, acting as decision-
makers to make things happen. Establishing political, technical and operational workgroups on specific topics for the implementation of the Strategic Plan. Rationalizing the relationship between Government and Regions as well as the one between Government, Regions and Territory, to thoroughly implement the Strategic Plan. Charging the workgroups with the task to identify European structural funds
39
to support the Strategic Plan. Allocated time
3 months
Action 3 Establishment of a task force for the implementation of the Strategic Plan
reporting directly to the Minister of Tourism. Rationale The complexity of achieving the measures outlined in the Strategic Plan and
the level of international competition require specific and excellent skills. Description Creating an ad hoc body appointed to implement the actions outlined in the
Strategic Plan, reporting directly to the Minister or the Head of the Department. Specific skills are required for implementation, such as project management and communication skills to highlight advances and possible weaknesses. Starting a search for one/two senior managers as well as a "talent pool" that can work on the implementation of the Plan, within a framework of collaboration with the ENIT - Agenzia Nazionale del Turismo. Selecting at least 20 young professionals with high potential and some basic skills (e.g. hospitality upgrading, taxation, etc.). Enhancing the working method used by the Lead Group for the implementation of the Strategic Plan.
Allocated time
3-4 months
Long term actions, to be implemented immediately High economic impact Medium-low speed of execution
Action 4 Start of the process of revision of Title V of the Constitution and
reviewing of the industry governance. Rationale Tourism is a strategic industry with international competition, for which
central leadership is required with vision on international phenomena and sufficient weight to represent Italy.
Description Starting a process that leads, in the long run, to the revision of Title V to reassign to the State the role of driving force in the industry. Modifying the Title V of the Constitution by reintroducing tourism among the subjects under concurrent legislative competence between State and Regions/ Autonomous provinces. Making tourism central to the Government Agenda and for Italian citizens, as one of the main potential driving forces for Italy’s growth in the coming years. Defining tourism matters for which the Government must be responsible (for example Italy’s Strategy on International Tourism) and those for which the Regions retain independence (for instance promotion and development of local offer). Defining roles and responsibility, also in terms of governance, not only between State and Regions/Autonomous provinces, but also between Provinces and Municipalities with reference to the actions of communication and promotional marketing of local destinations.
Allocated time
Within 2 years
40
Action 5 Allocation of a budget to the Minister of Tourism and establishment of a
Ministry of Tourism. Rationale A Minister without portfolio has few tools and resources (both human and
financial) to have a real impact on the development of the sector, especially at a time of revival and strong focus of the government on this industry.
Description Provide the Minister of Tourism with adequate tools for the development of the industry by: Establishing a Ministry of Tourism with an independent budget or
establishing a Ministry of Tourism with a budget, coordinated with the Ministry of Heritage and Cultural Activities, in light of its synergy with tourism (for instance, enhancement of cultural sites, calendar of events, etc.);
Using funds from the tourism industry to assign a budget to the Ministry of Tourism.
Allocated time
18 months from starting time
Low impact quick actions Medium-low economic impact High speed of execution
Action 6 Creation of tourism database unified under Ministry/ENIT-Agenzia
Nazionale del Turismo. Rationale The data currently available is based on various sources, sometimes in conflict
with each other. Furthermore, the process of data collection in the field does not appear to be optimal (example: since 2007 there is no data collected for Rome).
Description Creating a strong body to manage a “single database”, complete and reliable aimed at providing not just data, but also analysis and important messages for operators. Re-establishing the Osservatorio Nazionale (National Observatory) and data management. Unifying the tourism database management under a single observatory (under the Ministry or Agenzia Nazionale del Turismo), with the responsibility of ensuring completeness, reliability, and interpretations at national and regional levels. Reviewing the process of data collection in the field. Involving the main university research centers specialized in business disciplines in the activities of the Observatory.
Allocated time
6-12 months
41
7. A NEW ROLE FOR ENIT – AGENZIA NAZIONALE DEL TURISMO
This Chapter illustrates the main actions of the Strategic Plan aimed at reviving the Agenzia Nazionale del Turismo, providing the organization with a new mission and more qualified skills, able to impact broader areas. In this case, the actions will be presented following the prioritization scheme presented in Chapter 5.
Priority actions High economic impact High speed of execution
Action 7 Transform the mandate and organization, aligning them the best
international agencies, providing resources with specific skills. Rationale The Agenzia Nazionale del Turismo is not very effective, perceived as
more connected to bureaucratic logic rather than market logic. Description Reviving the Agenzia Nazionale del Turismo, by transforming the
mandate, Organization and allocating resources with specific skills to become a driving force in the development of the sector. Bring the National Tourism Agency to the level of the best international agencies, extending the mission, promoting marketing in connection with the Regions. Consequently redefine the role, key activities, and change the perception of the Agenzia Nazionale del Turismo for operators in the sector and in the international community. Organize the "Factory of Products" that carries tourist products, including multi-regional level, in order to promote the tourism of Italy and its regions. National Tourism Agency, in carrying out its institutional mission of promoting international Italian Tourism and its regional realities, has the below tasks, among others, including the following: • Attracting foreign travelers to visit Italy (newcomers) and providing reasons to return. To those who know (itineraries, calendar events, etc.), Also using digital channels for the promotion (e.g. website, blog, social network). • Support regions and autonomous provinces in the development and setup/positioning of priority tourism products. • Apply and monitor the implementation of the national long-term plans (on sales and marketing of investment in other levels of intervention, such as transportation or accommodation), supporting the regions in the definition of their own detailed plan. • Define the actions to be carried out and their priorities in accordance with the regions (e.g. accommodation, transportation and last mile logistics, contributions to low-cost carriers). • Measure performance with a panel of detailed KPI (Key Performance Indicator).
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• Define the actions to be carried out and their priorities in accordance with the regions (e.g. regarding accommodation, transport and last mile logistics and contributions to low-cost carriers). • Measure performance with a panel of detailed KPI (Key Performance Indicator). • Develop and implement a strategy overseeing digital channels and the appropriate audience. • Support the marketing of primarily Italian tourism products.
Allocated time
6 months
Action 8 Reorganization of the Agenzia Nazionale del Turismo with awareness to
external subjects. Rationale Operators perceive the Agenzia Nazionale del Turismo as a subject linked to
more bureaucratic logic than the market. Description •Perspective to reorganize the Agenzia Nazionale del Turismo, in order to
increase efficiency, improve the quality of service, and to make the structure more suited to the dynamics of the tourism sector. To this end, greater involvement, in a logic of cooperative federalism, regions, metropolitan cities, associations representing local and Unioncamere. • Define the operational model, with employment policies and the evaluation of the resources, making it possible to attract and retain top talent from other governments or from the external market. •Finding an adequate budget to carry out the recovery. •Hiring of excellent resources, even from the countries of the target segments (e.g. Chinese or Indian) have a greater understanding of the target markets.
Allocated time
6 months
Action 9 Creation of a "Factory of Products" that selects, constructs and promotes
priority tourism products (including multi-regional). Rationale There is a lack of confidence in identifying, constructing and commercializing
touristic products in the international market. Description •ENIT - Agenzia Nazionale del Turismo, in carrying out its institutional
mission of promoting international tourism in Italy and in its regional realities, has the task, among others, to implement strategies for the promotion and marketing of tourism products, together with the Italian regions. In other words, to create a "Factory of Products" inside the Agenzia Nazionale del Turismo, Regions and Autonomous Provinces that aid in the design, development and commercial launch of priority tourism products. Defining the operating model concerning the Regions and Autonomous Provinces, • establishing a central factory with strong leadership, coaching, counseling and intensive interaction against regional Factories. • identifying which resources must devote the Department, such as the, "Agenzia Nazionale del Turismo" and what skills they need and to research (both in and outside PA) • redefining the role of the new agency and allocating resources with specific skills in order to support the regions in creating marketing and promotion of
43
priority products to target segments. Focuses on the product range (both regional and multi-regional) of 30/40 priority destinations, differentiating in favor of the higher valued segments and profitability. • focusing on the factory Products in the development of customized products, such as affluent repeat tourists, (e.g. "circuit for Ducati lovers", golf, etc...) • defining paths for shopping focusing on tourists from BRIC and the Gulf • creating multi-regional products, also inspired by international best practices, (e.g. "Via Francigena" the multi-regional model of the "Camino de Santiago", the circuit of historic houses, for example, Paradores or Relais & Châteaux) • offering specific products for seniors (e.g., hot springs) and encouraging the arrival of seasonal adjustment.
Allocated time
9 months
Action 10 Launch/revamping of Italy Brand. Rationale The promotion of cities, provinces and regions is uncoordinated.
Value in recognition of an Italian product in a very crowded and competitive market.
Description Developing and promoting an "umbrella brand" for Italy, also enhancing the existing and undervalued "Italy Much More". Always return to the promotion and marketing of the products of the Regions, a single brand umbrella and Italy brand (this is especially important for travelers from far locations, who do not know the specifics of the Italian territory).
Allocated time
6 months
Action 11 Communication and promotion of tourism in the country even including
Italian tourists. Rationale Currently, the Agenzia Nazionale del Turismo only caters to an international
audience. Description Promoting international and domestic tourism alike.
The Strategic Plan which focuses mainly on the development of International Tourism, may provide benefits for the Italian public, identifying elements of overlap between the international and domestic segments priority, promoting the offer in the same way (For example, a product for the affluent European can also be applied to Italians).
Allocated time
6 months
Action 12 Establishment within the Agenzia Nazionale del Turismo of a laboratory
of e-tourism for the definition and implementation of the Digital Strategy for Tourism.
Rationale There is a lack of a digital strategy of the country for tourism. Regardless of the features, the mere presence of a website is not enough. The clients most interested are those who prefer no middleman, whom also find it increasingly important to be able to communicate via the web.
44
Description Defining and implementing, as part of the overall implementation of the Italian digital, a digital strategy for the tourism sector through a laboratory for e-tourism. Realigning the site Italia.it, the regional portals, and the presence of social networks, blogs and communities to the overall strategy. Italia.it aligns with international best practices, integrating the site into the digital strategy (in terms of content, navigability, proposed routes, etc...) And using it for promotional and marketing activities, with attention to communicate not only the characteristics of the product tourism, but also how to benefit from it and at what cost (managing communication and promotion through digital media instead of locally). Using digital channels to focus the efforts of promotional marketing products with a high potential segments priority. Developing Italy promotion, coordinated channels, and digital platforms, integrating the site in a digital strategy and communications, strengthening promotion and marketing of digital channels by improving presence on social networks which will increase the visibility of Italian tourism products on the web.
Allocated time
6-12 months
Action 13 Communication of EXPO 2015 for national promotion. Rationale Potential opportunity for worldwide visibility, not only for Milan, but for the
entire country. Description Promoting and marketing EXPO 2015 as a national tourist product.
EXPO 2015 could be used as a way to promote the rest of the tourism of the country, especially in areas and neighboring regions, showcasing and promoting the renewed value of Italian tourism. Building a range of products tied to the EXPO meant to capture the interest of the tourists that are in medium and long radius, as an attempt of keeping them in Italy for a few days longer in order to visit the EXPO.
Allocated time
12 months. Then follow up event.
Action 14 Strengthening and promotion of the Italian calendar of events (focus on
priority destination districts). Rationale Absence of a plan based on the timing and support of tourism events in Italy,
in particular, encouraging the return of European tourists. Lacking in organized and effective promotion of events on the calendar, particularly abroad.
Description Strengthening and actively promoting the national calendar of events, in particular, the priority destination districts, increasing the number of tourist stays, and the promoting an increase their presence in low season. In particular, it is important to: • Enrich and promote the regions together, with a calendar of artistic and cultural music events, monthly detailing, the obvious reasons for the short-term tourist to return to Italy…especially for affluent Europeans with a seasonal vacation objective; • Aim to host prestigious sporting events;
45
• Push the segments of demand for quality (e.g. for golf enthusiasts a great tournament / event for opera lovers, intensify openings and programs of opera houses / works, and building products around specific events (e.g., receptions, transport, etc.); • Schedule around Expo 2015, a calendar of events, which will highlight reasons to come and remain for a longer amount of time, traveling beyond Lombardy; • Strengthen the routes with events targeted towards secondary segments (e.g. food and wine); • Develop a method for integrating a digital calendar of events at the Italian level, with links and input from the regions, cities, cultures, and other agencies, organized to facilitate consultation by European tourists, interested in the region; • Use the site Italia.it and other digital channels for promoting the integrated national calendar.
Allocated time
6-9 months
Action 15 Development agreements with tour operators and international air
carriers. Rationale Absence of structured agreements at a national level with international
outbound tour operators, operators of the value chain, airlines, ... Description Enter into agreements with global players in the sector by encouraging
operators depending on the achieved results (e.g. A bonus to the achievement of specific targets). Enter into agreements with global tour operators in order to properly encourage the results. Supply targeted packages also based on the needs of the segments. Focus, as a priority, on tour operators and strong BRIC geographies. Start table agreements with international airlines which are especially designed to create or increase the number of direct connections to the target countries.
Allocated time
12 months, then work in progress
Action 16 Raise industry awareness and image through Italian media. Rationale The global market and its connectedness amplify the negative perception of
the country due to fraud, resulting in damage to the image and the presence which is difficult to estimate.
Description Reinforcing Italian citizens’ attention towards tourism. Continuing to strengthen the campaign in the Italian media, raising awareness towards the importance of tourism in the Italian countryside, renewing the tourist’s trust, which may have been damaged, due to fraud. Fostering a sense of hospitality among the population.
Allocated time
Already underway
46
Long term actions, to be implemented immediately High economic impact Medium-low speed of execution
Action 17 Allocation of a part of the regional funds to the National Agency for the
promotion of tourism, using them for promotional marketing. Rationale The regions do not have the skills to compete in the global marketplace and
interface, in particular those further away. Description Allocating part of the budget for the promotion of the regions and recovered
funds (from visas, tax refund, etc.) to create, within the Agency, a "Sales and Marketing" department, to act as the driving force of tourism and support for regions. Defining the mode of financing within the Permanent Committee for Tourism.Using the budget with a view to promoting commercialization by facilitating the purchase already in communication (e.g. associating also produced a set of additional information such as price range, different options of accommodation, information logistics). Assigning the Sales Department the following responsibilities: • Reaching target visits and revenue in Italian priority destination districts; • Coordinating the promotion abroad (either through greater central management of expenses for promotion and co-marketing initiatives with the regions); • Coordinating and marketing the Italian tourism products, especially on the web, using a digital strategy focused on priority segments; • Engaging in the promotion of entrepreneurs, excellent companies, public figures and sports (such ambassadors of Italy); • Developing a culture of CRM using the customer database of the major players involved in the provision of services for the tourist (e.g. Alitalia, Highways, FS – Italian Railroad). Using parameters related to the number of overnight stays managed by individual regions for the definition of promotional budgets of regional competence.
Allocated time
12/18 months
Low-impact quick actions Medium-low economic impact High speed of execution
Action 18 Incentives and implementation of agreements for the production of
foreign films in Italian tourist location (focus BRIC). Rationale A world-famous film advertising Italy has not been developed since the
sixties. Description Establishing a national tourism "film commission", in cooperation with
existing regional film commissions and creating incentives for the production of films with promotional potential. Providing tax incentives (e.g. with a tax credit or tax shelter) or through benefits (e.g. benefits of enforceability) the production of international films
47
set in places to which you want to bet as supply system, preferably made from productions of the target countries. Involve directors and actors of reference in the target countries (e.g. producers of Bollywood).
Allocated time
9 months
Action 19 Improvement of crisis management that have an impact on tourism
through a dedicated Public Relations firm. Rationale Less global coverage, with respect to competitors, of communication and
management of PR, especially in times of recession. Description Systematically managing communication in crisis situations (e.g. garbage in
Naples, Concordia disaster), especially in relation to the international media. Defining a manager within Agenzia Nazionale del Turismo that coordinates with the government to manage the crisis from the point of view of communication, preparing communication plans with respect to possible scenarios. Starting a structured PR activity, to improve Italy's presence in the international media, in coordination with the ACE.
Allocated time
9 months
Action 20 Studio partnerships with leading web operators (focus on BRIC and
affluent). Rationale Lack of a great tool for facilitating the individual traveler who wants to
program / choose a vacation in Italy. Description Evaluating a partnership with website operators, with agreements that enable
the public to plan their stay on the country’s official website, relying on competitors as well.
Allocated time
6 months
Action 21 Development of "App" for smartphones and tablets aimed at foreign
tourists. Rationale Lack of services on the mobile, in the face of an increasing propensity of
tourists towards the digital channels. Description Developing Apps in the service of tourists, especially for foreigners
(logistics, trains, taxis, exhibitions, etc.). Disseminating information to foreigners already in the country. Encouraging the development of applications for smartphones and tablets that meet the needs of international tourists, through support for technology start-ups located in Italy. Incentive for the development of Apps for smartphones and tablets designed to create a community of fans of Italy.
Allocated time
6 months
48
Action 22 Involvement of the RAI for the purpose of tourism promotion abroad. Rationale RAI as a vehicle of Italian culture in the world, but also as a potential tool to
promote tourism in the world, through its programs abroad. Description Designing programs that make the country discoverable, by means of valuing
assets, events, itineraries, enticing newcomers and repeating tourists to visit Italy. Providing advertising space for Italy (e.g. broadcasting the spot "Italy Much More"). Coordinating between Agenzia Nazionale del Turismo and Rai to create foreign country-based promotional campaigns, depending on each country’s characteristics (e.g. give visibility to events to stimulate tourism week-enders).
Allocated time
9 months
Second priority actions Medium-low economic impact Medium-low speed of execution
Action 23 Integration of e-commerce portal of Italia.it and use for promotional
marketing in collaboration with the Regions. Rationale Sales are not supported by the official website, neither for the purchase of
holidays (e.g. romantic weekend in Rome), nor for buying gadgets/ museum tickets, etc.
Description Enriching, in collaboration with the Regions, the functionality of "Italia.it", e-commerce apps, online transactions, also with a combination of promotion and marketing (e.g. page of Florence all the information on how to get there and what to do and the immediate possibility of purchase of products / services). Introducing search engines in order to allow effective targeted purchases of hotels and vacation packages.
Allocated time
12/18 months
Action 24 Support for the creation of a large Italian incoming operator / incoming
network of companies. Rationale The absence of a large Italian operator for incoming penalizes the sector. Description Establishing a task force for the creation of a major Italian incoming operator
or a federation of operators covering routes with high volume or high potential. Encouraging the emergence of a national OTA (Online Travel Agency) with strong private participation, focused on incoming services, evaluating the role of existing operators. Facilitating the aggregation of incoming operators of medium-sized means of encouraging the creation of networks of company in different areas of the country.
Allocated time
24 months
49
8. ORGANIZATION OF A MODERN OFFER
This Chapter illustrates the main actions of the Strategic Plan aimed at organizing a modern tourism offer, consistent with the expectations of tourists, investors and all stakeholders in the sector. Also in this case, the actions will be presented following the prioritization scheme presented in Chapter 5.
Priority actions High economic impact High speed of execution
Action 25 Identification of 30-40 priority destination districts for international
tourism. Rationale Communication efforts and promotion are too fragmented and the interest of
the international tourists is on a few key products (especially for newcomers) Description Selecting the 30-40 priority destination districts for the development of
international tourism from the “Factory of Products” and the Regions. To this end, it is necessary to: • Map the existing tourist destination districts and analyze their characteristics in terms of past performance, customer segments, product positioning (price, quality of accommodation, etc.)., Product content (events, routes, etc..), Enablers (infrastructure , etc.); • Analyze the development potential of international tourism with reference to quantitative elements (value, growth of foreigners, foreign relation / Italian, etc..) And qualitative (international brand awareness, quality of management, etc.). • Compare the destination districts with best practices in order to understand the development potential and identify problems and areas for improvement. Seize the opportunities arising from areas of industrial decline, but with a strong vocation for tourism, such as Sulcis.
Allocated time
12 months
Action 26 Initiatives aimed at improving the distribution and quality of tourist
flows in the top 4 cities and contributing to their seasonal adjustment and sustainable tourism.
Rationale Risk of saturation in some cities and destination districts due to the forecasted increase flow.
Improving the distribution and quality of incoming traffic in areas at risk of saturation by, • Supporting the creation and promotion of a calendar of events that give reasons for tourists to visit a location throughout the year; • Evaluating the possibility of introducing measures aimed at containing selective incoming traffic at certain locations (e.g. maximum threshold of visitors with "entrance ticket"); • Focusing efforts on sustainability of tourism.
Allocated time
12 months
50
Action 27 Strengthening of shopping itineraries (focus on 4 Top City and surrounding areas).
Rationale Shopping is one of the issues that most attracts your target customers to Italy. Description Creating tours and shopping opportunities with a focus on tourists from BIC,
Russia and the Gulf, by supporting the creation and strengthening of routes for upscale shopping, such as outlets, department stores, high street, also by networking existing realities with an improvement of upcoming events and offers. Projects of communication ad hoc communication in language, aimed at the target countries for shopping tourists.
Allocated time
12 months
Action 28 Opening a working product with a focus on sea, beaches and the re-
launch of concessions. Rationale Difficult period for the product sea over the last 10 years, with the risk
that the situation does not improve, or, indeed, grows gradually worse. Description • Establishing a task force between Agenzia Nazionale del Turismo,
Regions, local authorities and associations to discuss the major difficulties for sea product, • Focusing the efforts to find a solution that meets the Bolkestein regulations, • Interacting with the “Factory of products” to better understand the target segments and their needs and build a suitable offer.
Allocated time
9 months
Long term actions, to be implemented immediately High economic impact Medium-low speed of execution
Action 29 Relaunch of international tourism offer, with the positioning of the 30-40
priority products to promote and activities with Regional and Local Authorities about gaps to be filled.
Rationale To revive the offer you need an integrated effort between the Centre and the Regions for improving all the elements that compose it.
Description Defined, by the “Factory of products” and Central Regions, the positioning of 30-40 priority destination districts and the key behind this positioning. Identify and address the gap to allow recovery of such products on an international level. • To that end it is necessary to: •Define target segments and positioning that destination districts and priority products must have, • Identify the key features behind this positioning, e.g. in terms of structured content (e.g., routes, events, etc.), price, enablers (e.g. accommodation, transport, etc.) • Identify any gaps to be filled on the characteristics identified; • Bridge the gap through a joint effort between central, local authorities and
51
industry players, • Communicate, promote and market products based on the priorities identified positioning, focusing efforts towards the target segments of individual products.
Allocated time
24 months
Action 30 Focus on affluent Europeans and BRIC to increase the value of the
average expenditure per tourist. Rationale The affluent European and BRIC segments are the priority in terms of size,
average spending and growth expected in 2020. Description Structuring product offering (priority destinations) that meets the needs of key
segments of the demand in terms of value and expected growth. It is therefore necessary to analyze the characteristics and requirements/criteria for selecting segments affluent and BRIC, understand the relationship between these needs and the current tourist offer, identify and fill any existing gaps in terms of the content of the product (shopping for BRIC events affluent Europeans, etc.), transportation (direct flights to BRIC, point-to-point optimal for affluent Europeans), hospitality and accommodations (e.g., family-friendly resort for Russian families, the Gulf countries and Indian) and enablers (e.g.: visas for Russian and Chinese tourists).Focusing efforts of communication and marketing of 30-40 priority destinations, relying on the elements of the offer to meet their needs.
Allocated time
18 months
Action 31 Establishment of 1-2 new important tourist destination districts in the
South also funded through project bonds and European funds and in a sustainable way.
Rationale Italy has not launched a major new product in tourism for 50 years, as opposed to what Italy’s main competitors have done or are doing.
Description Promoting the creation of 1-2 new important tourist destination districts in the South ("a new Emerald Coast"), potential driving force for the industry as a whole and for the image of Italy in the world, ensuring sustainability, zero bureaucracy and guaranteed times to investors. • Carefully considering the opportunities in the South, due to the huge untapped potential in terms of presence of tourism, especially foreign.• Leveraging, among other opportunities, the reprogramming of funds to the regions of the South, in collaboration with the Ministry of Territorial Cohesion. • Evaluating the possibility of financing the project through project bonds, so that it can be guaranteed by the State on the implementation of the project.• Locating the European Structural Funds to support the implementation of the new destination districts.• Launching a process of selection of geographical areas for the realization of the destination districts (jointly with regional and investors/banks), in a sustainable way.• Identifying areas in order to develop a destination district that has the
52
potential to attract affluent European tourists that still represent a strong segment. • Involving in the project, in a framework of partnership with a long-term plan, international business leaders in each element of the value chain.
Allocated time
Identification of the destination districts in 6 months, launch 24 months
Action 32 Introduction of regulation benefits to support the implementation of the
new important destination districts Rationale The complexity and rigidity of the Italian legal framework discourages
investors and threaten the project at conception. Description
Provide incentives favoring the speed of execution and consistency with the project. • Defining a business model that allows to operate with approval procedures simple and "disconnected" from the constraints of bureaucratic standard. • Introducing legislation to offer strong benefits (e.g., free grants tied to large investments in the area). • Defining with the Regions the rules for criteria definition, places and conditions of "zero bureaucracy" to give investors a certainty of time and cost, also considering assigning the coordination to a plenipotentiary.
Allocated time
12 months
53
Action 33 Development of MICE tourism. Rationale Accommodation and infrastructures inadequate to host international
congresses and conventions. Description Re-establishing, through the new Agenzia Nazionale del Turismo, an
organization dedicated to the development of this segment that represents the new benchmark for the MICE industry (Meetings, Incentives, Conferences, Exhibitions) and the local Convention Bureaus. Defining MICE destinations to launch on the international market and encouraging the private sector to invest in this business. Supporting the local Convention Bureaus to enhance the offer on those segments that can best bridge the gap with the competitors.
Allocated time
24 months
Action 34 Valorization of cultural sites with high tourism impact through public-
private partnerships. Rationale
Italy’s wealth of historical and cultural assets is degraded and under-used as a driving force for tourism development. The calendar of cultural and historical events, especially to European repeat tourists, living in short-medium range, is not optimized. Insufficient connections between cultural destination districts (e.g. UNESCO sites are untapped in communication campaigns).
Description Enhancing cultural and architectural heritage sites with greater potential, as a symbol of cultural and artistic heritage of the country, through a renewal of management methods, a new commercial drive and a central control room.• Creating new ways of management, in terms of public-private partnerships for the management of sites of significant size. • Establishing a central control room of the Ministry of Tourism and the Ministry of Heritage and Cultural Activities to facilitate coordination between those involved in promotion and valorization of sites in order to:- Improve the economic management, operational and fundraising by having them managed by professionals who are responsible for the protection and commercial value of the sites (e.g. turnover of Pompeii to date of € 18 Bn vs. potential probably 3-4 times higher); - Strengthen the tools of tax relief for investments in cultural heritage sites of significant impact for tourism. • Developing additional 10/15 sites with a strong historical and artistic leverage on important cultural assets (e.g.: Royal Palace of Caserta, UNESCO heritage sites with highest international appeal, etc.) as a lever and driving force to increase number of tourists and to expand tourist itineraries (e.g., increase promotion of UNESCO heritage sites as tourist destinations, for example, by linking them to specific itineraries). • Evaluating the acceleration of construction for specific intervention financed with special programs (CIPE, Action Plan and cohesion). • Increasing revenues from merchandising that can also be reinvested in maintaining the site, supporting the historical and cultural assets more effectively and managing technology platforms and transactional areas (e.g. e-commerce websites).
Allocated time
Identification in 6-12 months, launch in 18 months
54
Low impact quick actions Medium-low economic impact High speed of execution
Action 35 Establishment of a program to raise awareness for environment and
decorum. Rationale It is a weakness of Italy, especially for newcomers. According to a research by
Eurisko, Russian tourists place Italy last Europe for "order and cleanliness of public spaces".)
Description Develop, in coordination with the Regions, local authorities and the Ministry of Heritage and Cultural Activities, actions aimed at improving the decorum of public spaces. • Promoting financing aimed at improving public spaces. • Conveying part of the funds derived from tourism (e.g. sojourn tax) to the upgrading and the maintenance of order, cleanliness and decorum. • Increasing the awareness of the importance of protecting Italy’s and the potential damage caused by inappropriate behavior (e.g., vandalism, graffiti).
Allocated time
12 months
55
9. BRINGING ACCOMMODATION FACILITIES TO THE LEVEL
OF INTERNATIONAL COMPETITORS
This Chapter illustrates the main actions of the Strategic Plan aimed at modernizing the facilities to make them competitive with those offered by the major international competitors. Also in this case, the actions will be presented following the prioritization scheme presented in Chapter 5.
Long term actions, to be implemented immediately High economic impact Medium-low speed of execution
Action 36 Incentivize and support the consolidation of the hospitality (enterprise
networks, hotels, etc.). Rationale Fragmentation and the average size of Italian hotels do not allow in many
cases to compete economically. Description Encourage the aggregation and consolidation of tourist facilities.
• Starting a task force between Government, Regions, trade associations, Strategic Fund and major Italian banking institutions to: - Identify actions (first of all, the simplifications of the regulations) to support the consolidation; - Facilitate the creation of a "national standard in the hotel industry"; - Encourage the creation of aggregations/associations of enterprises that can join at an international level, in a framework of alliances with international chains on the booking system as well as the designation of a historic mansion circuit. • Supporting the creation of business networks fostering co-financing of initiatives in the logic of public-private financing (strengthening the regulation on industry’s Network enterprises, under Art. 66 of Decree Law 83/2012, extending the benefits for industrial districts to benefit tourist enterprises, Article 42 of Decree Law 78/2010).
Allocated time
Creating a task force in 6 months, first proposals in 12 months, approval in 24 months.
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Action 37 Introduction of tax credits and benefits for tourism enterprises that comply with the standards of hospitality, especially if they pass to a higher category.
Rationale Many of the existing facilities need to be upgraded. Description Support improvements in hospitality with tax credits and credit benefits,
including the use of a Revolving Fund co-financed by the Regions • Introducing tax breaks and a revolving fund to improve access to credit for interventions aimed at improving hospitality, such as structural changes, both internal (SPA, swimming pool, gym, etc.) and external (entertainment for youths) focused on entertainment. • Establishing a taskforce with major banks to provide tools to support investment in the sector, favoring the creation, in the banks, of a department dedicated to the tourism industry specializing in supporting hotels, restaurants and various hospitality facilities. • Creating a fund to support the renewal of enterprises entering the capital for 5-10 years, which allows the strengthening of liquidity and management skills of tourism entrepreneurs.
Allocated time
24 months (with initial proposals in 12 months)
Action 38 Support the modernization of the hospitality industry allowing the
possibility of "scrapping" the facilities. Rationale Presence of a high number of facilities, many of which are outdated and not
aligned with modern standards of quality. Description Stimulate and support the modernization of the hospitality industry by
involving all stakeholders, including facilitating the "scrapping" of the facilities no longer able to compete.• Establishing a workgroup between Government, Regions and main Ministries as well as with the participation of Private investors (e.g., trade associations) and financial institutions (such as banks, mutual funds, etc.) to study financial incentives and tax instruments to facilitate the modernization of the hospitality industry (e.g., "scrapping", tax credits, volumetry prizes, credit concessions, revolving fund, etc.).• Identifying a set of national standards concerning the conditions to obtain incentives and concessions on the "scrapping" for structures that are no longer competitive.
Allocated time
24 months, with initial proposals in 12 months
Action 39 Facilitating the change of intended use. Rationale Possibility of allocating the facilities no longer competitive for other purposes. Description "Scrapping" the obsolete facilities to facilitate the change of intended use.
For example, by establishing a rule that simplifies and automates the change of intended use for the property intended as accommodation, not used bur rather occupied by companies structurally in deficit.Activating a coordination workgroup between Government, Regions, Autonomous Provinces and Acne (National Association of Italian Municipalities).
Allocated 15/18 months
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time
Low impact quick actions Medium-low economic impact High speed of execution
Action 40 Adoption in all regions of the European standard classification system for
the hospitality industry. Rationale The classification of accommodation must represent for the tourist a tool to
guide in the selection. Today the standards are defined differently for each Region.
Description Apply a single classification system to all Italian regions consistent with the ongoing procedures in other European countries, in order to: • Overcome the current system of classification of accommodation, which provides criteria that vary from Region to Region, thus disorienting tourists; • Adopt the "Hotelstars Union" European classification system as the sole classification system at national level; • Apply this system also to Bed and Breakfast and farmhouses to ensure uniformity of standard, in coordination with the Ministry of Agriculture that manages the industry of farmhouse hospitality.
Allocated time
12 months
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10. TRANSPORT AND INFRASTRUCTURES
This chapter presents the main actions of the strategic plan aimed to improve the Italian offer for transport and infrastructures, allowing tourists to have a pleasant experience. Actions are presented following the definition of priorities outlined in chapter 5.
Priority actions High economic impact Fast time frame for implementation
Action 41 Unblocking the plan to expand Fiumicino airport. Fact Airport capacity struggling to sustain long haul tourist flow.
Inferior quality and lower standards compared to European competitors. Description Start expansion and renovations of the airport as soon as possible,
• securing the launch of investments as soon as possible; • removing “bottle neck” chained to the insufficient capacity to sustain the
increasing flow from long haul flights. • renovation of Fiumicino, the country’s “business card” for long haul tourists
(nowadays ageing structure and services). Time frame 6 months Action 42 Increase direct flights from BRIC. Fact Alitalia doesn’t have a “connecting” capacity with new markets, as competitor
airlines have developed. Description Develop direct flights to and from countries that show strong growth,
increasing numbers and the frequency of routes with BRIC connections, sustaining Alitalia by means of structured partnerships with alternative carriers of countries with strong growth.
Time frame 12 months Action 43 Development of selected agreements to increase low cost European
flights. Fact Some tourist destinations are penalised due to inadequate point to point
connections with the main European cities. Description Favour frequency of low cost routes to Italian destinations with strong
untapped potential, while stipulating agreements with low-cost carriers. Initiate talks between governments, regions, tourism organisations and airlines to strengthen the LCC routes, in airports where connections are already present, and in those without. Negotiate with low cost carriers giving special consideration where major potential presents for development in the south.
deadline 12 months
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Long term action, to be launched immediately High economic impact Time frame for implementation medium-low
Action 44 Strengthening of selected airport infrastructure with high tourism
potential. Fact The absence or inadequate airports penalise the flow of visitors in areas that
are of high potential. Description Launch/improve a few selected airports in areas of high potential growth or
with strong branding, focusing on low cost sectors with the aim to significantly reduce the time frame of point to point connections. Opening of Comiso airport (between Siracusa and Ragusa) offering a
headquarter base to LCC flights and favouring a more comprehensive project for the development of tourism of the area supporting the territory in general and therefore the whole Sicilian airport infrastructure.
Development of Salerno airport to support the “Coastline” and the Cilento area, locations with many logistical problems. The journey is too long and uncomfortable for tourists.
Upgrade of Lamezia Terme airport runway, to sustain the development of the product “the sea of Calabria”. Motivate the introduction of paid services aimed to minimize long queues and reduce point to point transfers, for example with fast lanes at passport checks (ex.: transfer the responsibility from airport authorities to the airport operator).
Time frame 24 months Action 45 Increase the connection and mixed mode commuting between main
tourist locations (focusing on the 4 top cities and other main locations). Fact Inefficient connections between airports and top cities discourage tourists, in
particular European weekenders. Services and quality infrastructure concentrate on the axis Turin-Salerno and become scarce and under developed in other important locations of the country.
Description Develop efficient plans to connect between airports and the 4 top cities that minimize the point to point transfer times and secure quality and European standards. Develop and complete intermodal transport plans for tourist destinations
that are most relevant, for example: “Intermodal Rome”, connection between Malpensa–Milan (in view of the Expo), connection Linate-Milan, connection Bologna airport-train station.
Fill the connection gap in Florence for European short distance travellers: there are no direct flights and the transfer times from nearby airports are too long for a weekend (strengthen the connection with Bologna thanks to high speed trains).
Favour the development of the external distribution network of the 4 cities. Create connection plans for roads or rail, improving the existing
infrastructure. Launch a working plan between government, regions, railways,
motorways, industry associations, banks and investors to define 10/15 ad
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hoc connections to boost a working logic, to improve connections between the 4 top cities and the secondary tourist sites (making the most of distances that are not high between permanent assets of large potential).
Complete the high velocity connection Milan-Venice (especially for BRIC). Speed up investments to increase the quality of the offer at the stations (ex.
Some platforms in Rome Tiburtina, stations in Venice and Florence etc.). Evaluate the introduction of high speed on the adriatic coast to connect
Bologna to Foggia/Brindisi. Consider traffic jams that are particularly critical on the roads and
motorways in areas with high tourism potential (ex. South West Sardinia). Time frame 5 years
Secondary action plan
Medium-low economic impact Time frame for implementation medium-low
Action 46 Segmentation and quality control for taxi services Fact
A very diversified service which is difficult to persuade when requested, with a quality that is often debatable.
Description Sustain improvement programs for taxi services, especially in key Italian tourism cities and carrying out inspections for quality standards. Classify taxi services on some key aspects (for example, the vehicle size),
differentiating fares and checking the standard characteristics of the class they belong to.
Support training programs to learn the English language in the prominent tourism destinations.
Introduction to make the option of credit card payment compulsory, especially at international airports.
Time frame 15/18 months
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11. DEVELOP THE KNOW HOW ACROSS THE WHOLE COURSE
This chapter presents the main actions of strategic planning aimed at developing the competence of tour operators with the introduction of specific formative initiatives and communication. These actions are presented following the definition outline of priorities presented in chapter 5.
Long term actions, but to be launched immediately High economic impact Time frame for implementation medium-low
Action 47 Re-launch of the tourism sector’s perception among the youth to attract the most successful (increase the appeal of professions within the tourism industry on the job market).
Fact Jobs in the tourism sector in Italy, are perceived to be of “low grade”; it is necessary to change the perception to attract quality staff to train and place in the sector.
Description Promote initiatives aimed to re-launch the perception towards employment within the sector. Launch a communication campaign to highlight and give prestige to the
sector (even in secondary schools of first and second grade). Reposition the view of the hospitality institute for the choice in deciding to
pursue secondary education with a campaign aimed at primary school teachers.
Utilize television channels to improve the perception of the tourism industry (ex. a TV series set in a tourism context, as well as a reality show on tourism professions for example, the winner being employed in a prestigious infrastructure).
Define a manner in which the sector is taken back to the centre of young people’s ambitions thanks to the promotion on modern web channels.
Offer one or more prizes for Excellency in the tourism sector (ex. Best restaurateur of the year in Italy or in the world, best seaside resort, best hotel manager etc.)
Time frame 3-4 years
Action 48 Implementation of permanent training programs for those already working in tourism, either teachers or operators.
Fact The supply chain doesn’t measure up to a sector of strategic importance that can no longer be managed in a non managed improvised manner.
Description Launch a program for “educating the educators” in the technical college institutes. Emphasis on educators that come from large international chains to
strengthen the knowledge of teachers in the technical institutes. Establish training programs for teachers to guarantee the constant update of
new trends and best practice for international tourism (“Train the
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Teachers”). Implement training programs for every level, not just for entry level to the work force, but also in terms of permanent training for existing employees by spreading managerial and executive know how.
Time frame 18 months
Action 49 Drive and support for “Program of excellence of the national tourist
training development” (ex. college and technical institutes). Fact The current tourism training programs in high schools and hospitality
institutes is inadequate for the positioning of tourism in Italy, to drive the offer for quality Italian tourism towards international tourists (in particular towards the medium high end ones).
Description Implement few actions aimed at: Rationalizing the actions of the regions for training by a structured mapping
of the current formative offer; Create incentives for exchanges and circulation of best practice between
regions; Review the programs of college institutes according to industry
requirements (for example, with a bigger emphasis on foreign languages); Introduce testing to verify the level of graduates (evaluation testing based on
the GMAT model: Italy has a “critical mass” in creating an international standard);
Make a systematic working internship compulsory each year for students of the college institutes and of the Universities that are mostly connected to tourism (also reducing programs to guarantee more on the job training);
Utilize university student skills to support tourism (ex. Literature, Asian languages, history of art, etc.)
Time frame 36 months
Quick low impact actions Medium-low economic impact Fast Time frame for implementation
Action 50 Launch the operation of the Foundation for university studies and
enhancement for tourism (network among the best Italian and International experiences).
Fact The management and professional level of the sector needs to be improved; Italy needs to aspire to a school of worldwide excellence within tourism.
Description Build managerial know how of excellence in the sector to raise the average level, utilizing funds intended for the Foundation of university studies and for improvement of tourism, (Art. 67 of d.l. n. 83/2012), to create a specialized school of international standard with dedicated quality university courses for the training of managers and directors within the tourism industry (ex. “International hospitality college” based on the Lausanne model), in line with the best pre-existing experiences. Use the Foundation to offer training paths aimed at public operators and
entrepreneurs, as well as guiding a cultural growth path of the sector.
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Map out and evaluate all the current initiatives in the Italian universities. Implement best international practice for the creation of specialized schools
that can establish themselves points of excellence. (ex. Insead). Time frame 12 months
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12. ATTRACT INTERNATIONAL INVESTMENTS
This chapter presents the principle strategic action plans aimed at establishing the basis and the conditions so that international investors can decide whether to invest time and resources in projects and tourism organizations. The actions are presented by following the priorities strategy presented in chapter 5.
Actions of priority High economic impact Fast time frame for implementation
Action 51 Stimulus of large Italian and foreign tourism investments (higher than € 250 MM), also using European funds and assessing split year treatment
Fact The level of direct investments in Italy, particular foreign, is much less than its European competitors.
Description Define a program to stimulate large tourism investments from Italian and foreign investors, in conjunction with MiSE. Establish easy financing and/or support by means of project financing / PPP
projects of large proportions directed to the construction of large scale hotels.
Pin point the structural European funds potentially available for investments.
Time frame 9 months Action 52 Creation of a “Tourism” section within the new community programming
for the 2014 – 2020 structural funds. Fact Shortage of structured programming of European funds towards the tourism
sector. Description Establish a section dedicated to identify the European 2014 – 2020 structural
funds that can be utilized in the tourism sector. Stimulate the presentation of investment projects, with the possibility of
benefiting from European financing. Make sure that the funds don’t remain unutilized and therefore stimulate the
use of European funds in the tourism sector. Timeframe 9 months Action 53 Support the creation of tourism networks, from Art. 66 del d.l. n. 83/2012.Fact It is necessary to develop and present a unified “system” that involves the
operators in the tourism sector to fully respond to the demand. Description Develop networks (including inter-regional) among companies that operate
within the tourism sector sharing the same aims Define criteria to launch pilot projects, to favor the creation of networks
among the national tourism department Bring into play grassroots organizations, such as “The Product Club” in
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Emilia Romagna, or as in some regions establishments, such as Destination Management Company and Product Management Company in Abruzzi.
Apply tax incentives and benefits to companies (Art. 42 del d.l. n. 78/2010). Allocate necessary funds for the creation of networks.
Time frame 6 months Action 54 Abolishment of bureaucracy for new businesses in the tourism industry,
enhancing predictions from the MiSE plans. Fact The sector is perceived as being crowded, with the consequent risk of “losing”
a generation of entrepreneurs. Description Simplify and speed up bureaucratic procedures to stimulate company start-up
Tax incentives and reduced bureaucracy for start-ups within tourism (when run by qualified personnel).
Highlight the definitions from the Development Decree and what is being defined by MiSE (such as how to start up an online company).
Support the appeal of venture capital with regards to tourism start-ups. Time frame 12 months Action 55 Devolve part of the exceeding VAT compared to the main competitors,
such as France, to the tourism industry. Fact Today the tax rate on tourism in Italy is 10%, more than France, Spain and
Germany (7%). Description Assign an amount to a tourism fund, being part of the exceeding tourism
derived VAT levy, as if same tax rate would be dealt with in competitor countries. Evaluate with MEF the option to assign (part or total) of the exceeding tax rate, channeling it into a fund for the realization of the strategic plan actions.
Time frame 6 months Action 56 Rate recovery, part of the margin of specialized operators in “tax refund”
to be reinvested in tourism. Fact Post Tax refunds generate a margin for specialized operators foreign to the
tourism supply chain. Description Retrieve rate, part of the margin specialized tax refund operators and allocate
it to a fund for the actions of the strategic plan. Introduce a profit sharing mechanism allowing the Italian government to
retrieve a part of the margin left to the specialized operators. – The overall margin for the specialized operators in Italy is estimated to
be equal € 150 – 300 MM. – Recover the established (and authorized) information in view of CRM.
Time frame 6 months Action 57 Re-use of the proceeds coming from the increase of visas granted for
tourism and speed up the issuing for primary countries (ex. China). Rational Time frame and procedures to issue a visa slow down entry for many tourists
of emerging countries.
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The value earned from a visa is largely superior to the expense incurred to issue it.
Description Guarantee that part of the earnings derived from visas will be assigned to initiatives for the development of tourism. Allocate the extra earnings from visas 2012 (net of cost increase foreseen
from mid 2012) to a fund destined to initiatives for promotions and marketing for tourism, especially in countries with strong growth.
Increase the resources and staff for visas of some specific countries. Guarantee staff supply and budget to put planning processes of resources of
medium term in place; priority given to Beijing, Shanghai, Canton, Moscow, St. Petersburg, Kiev, Mumbai and New Delhi.
Simplify and minimize procedures to obtain tourist visas, especially if commuting is needed. – Favor the release of multiyear visas up to 5 years with the option for
multiple entries for specific sectors (offering customer service for renewals).
Striving to promote improvements in European headquarters to process Schengen visas. – Play a key role in the development of processes in the Schengen System. – Stimulate, with constant proposals, to revise the processes and simplify
procedures, in particular with regards to affluent tourists from Russia, India, China and the Gulf.
Time frame 6 months Action 58 Balancing the Tourist Tax and devolve the proceeds to the
townships/communities to be invested in tourism Fact Currently the Room Tax is managed by the Local Council therefore
inconsistent: the complexity of the tax also becomes a commercial barrier.
Description Adopt national standard, converting it into a “purpose tax” and allocating a part of the income to the development of tourism. Simplify and uniform the tax (with a positive impact in terms of overall
revenue). Assign a part of the revenue to initiatives for the development of the
industry. Assign 5-10% of the revenue to finance the National Tourist Board.
Time frame 12 months Action 59 Destine a new fund for tourism from the resources derived from the
action plans to recover funds (goods and services tax, tax refund, visas, ecc.).
Fact It is necessary to create a fund for tourism investments. Description Allowance of a national fund for the development of tourism that besides
being an endowment, includes funds that derive from: partial (or full) extra tax revenue that exceeds what we would have if the
same rate of the competitor countries was applied (7% vs. 10% in Italy); recovery of the amount, partial margin of the operators who specialize in tax
refunds;
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proceeds from the increase of tourist visas; Income from a percentage of the accommodation tax (purpose tax)
uniformed at a national level. Time frame 12 months
Long term actions, to be immediately launched. High economic impact Time frame for implementation medium-low
Action 60 Implement an office and a location for the promotion of tourism
investments for international investors (coordinating with the plans of MiSE and ACE).
Fact A persisting lack of a continued structured approach and wholeness in promotion and monitoring of investment opportunities.
Description Implement, in conjunction with MiSE and l'ACE, an office dedicated to tourism investments and a site to promote opportunities and facilitate investments in the sector in Italy. Rationalize investment opportunities in the tourism sector in Italy, in line
with the activities of Desk Italia / ACE / InvItalia. Promote investment opportunities and communicate legislation and possible
benefits tied to investments, transparently. Develop a website for investments in the sector, similar to the Australian
website www.tourisminvestments.com.au. Communicate and promote the possible use of European funds in the chance
that the investment could benefit from this type of support. Time frame 18 months Action 61 Re-utilize government industrial sites (focus on areas with tourism
potential). Fact A variety of unused state properties exist located in areas of high tourism
potential. Description Establish a work site specialized in pin pointing and converting government
owned spaces of high potential. Identify 5-10 spaces to convert (with a preliminary projection for the
conversion) set up a business plan within 6 months and complete the conversion in 24-36 months
Time frame 36 months
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13. SCHEDULED SUMMARY FOR THE ACTION PLAN
Below is a summary of actions to be implemented, with information on the expected time frame for completion taking into consideration the following distinction: Actions that can be directly implemented by the Department of Regional Affairs,
Tourism and Sport or by the National Tourist Board (ENIT) Actions that also require the involvement of other institutions
GOVERNANCE
NATIONAL TOURIST BOARD
To be implemented in (months) Action 3 6 9 12 18 24 36 beyond
7 Transformation of the mandate and inclusion of qualified resources
8 Re-organisation 9 Product Factory 10 Unified Brand / Trademark 11 Communication also towards Italian
tourists
12 Carry out digital strategy 13 Communication EXPO 2015 14 Strengthening and promotion of the
events calendar
15 Commercial agreements with T.O. and airlines
16 Re-launch the image of the sector 17 Centralization of some regional funds
for the National Tourist Board
18 Incentives for the production of foreign
To be implemented in (months) Action 3 6 9 12 18 24 36 beyond
1 Permanent Tourism Committee 2 Technical Boards with Regions and
Associations to implement a strategic plan
3 Task force to implement the plan 4 Review of title V of the constitution 5 Minister for Tourism with portfolio 6 Unified data base
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films 19 PR Structure for crisis handling 20 Partnership with web operators 21 App for smart phones tablets for foreign
tourists
22 Strengthening of RAI (Italian Broadcasting Corporation)
23 Integration for e-commerce portal (on Italia.it)
24 Support to create a big incoming operator
PRODUCT OFFER
To be implemented in (months) Action 3 6 9 12 18 24 36 beyond
25 Selection of 30-40 priority districts 26 Manage the flow on 4 top cities 27 Strengthening of shopping itineraries 28 Business board on Sea products 29 Re-launch of the international tourism
offer on priority destinations
30 Focus on BRIC countries 31 1-2 new big tourism destinations in the
south Launch
32 Tax Brakes for creating the main districts 33 Development of congress tourism 34 Appreciation of cultural sites (also with
PPP) IdentificationLaunch
35 Awareness program for the respect of the environment and urban decorum
RECEPTIVE
To be implemented in (months) Action 3 6 9 12 18 24 36 beyond
36 Support the consolidating of hospitality First proposals
Launch Approval
37 Tax Credits and brakes to improve standard of structures
First proposals
38 Hospitality upgrade and /or scrapping First proposals
39 Destination change
40 International classified system of hospitality
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TRANSPORT
To be implemented in (months) Action 3 6 9 12 18 24 36 beyond
41 Unblock the plan to broaden Fiumicino airport
42 Increase direct flights from BRIC
43 Develop agreements for the increase of low cost European flights
44 Strengthening of some selected airport routes
Launch
45 Connectivity and multi transport of priority districts
Within 5 years
46 Segmentation and quality control of taxi services
TRAINING
To be implemented in (months) Action 3 6 9 12 18 24 36 offers
47 Re-launch of the perception among youth
48 Permanent training programs for operators
49 Excellence program for national tourism training
50 Operational start up of the University study foundation
INVESTMENTS
To be implemented in (months) Action 3 6 9 12 18 24 36 beyond
51 Incentives for large tourism investments 52 Tourism sector in the allocated funds
2014-2020
53 Support for the creation of tourism networks
54 “Zero bureaucracy for tourism start ups 55 Extra revenue in favor of the sector 56 Recover marginal part of the tax refund 57 Re-utilize proceeds from the increase of
concessions from visas
58 Balancing the Tourist Tax and convert into “Purpose Tax”
59 Creation of a new fund for the sector 60 Office and website for foreign
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investments within tourism 61 Appreciation for the states ex-industrial
space
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PART THREE
THE BEGINNING OF A JOURNEY
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14. PRIORITIES AND SHORT TERM ACTIONS
The strategic plan has identified 61 actions for the development of tourism in Italy, of which various levels of priority have been allocated on the basis of 2 dimensions: economic impact and speed of implementation. The strategic plan can already be put into action in the short term thanks to specific interventions.
An operational program for the government has therefore been defined that
distinguishes the operations into four main categories:
1. Legislative operations to launch the strategic plan • Re-launch of the National Tourist Board (ENIT) with conversion of mandate
and organization • Balancing of the accommodation tax and transformation into a purpose tax
for councils for investments to support tourist activities. • “Scrapping” of the obsolete small accommodation facilities, simplifying the
change over for their use. • Encourage the production of films for foreigners in tourist localities, targeting
BRIC countries. • Establish a national fund for the development of tourism (promoted by the
National strategic fund, Saving Unions and loans, banks and other institutional investors).
• Assign additional profits from tourist visas for tourism promotion (from 1st January 2014; in comparison to the reference for 2012 (net of the foreseen increase of the Development Decree, June2012).
2. Financing of existing tools
• Urgency for more funding for tourism promotion on the international market to face the negativity of the sector and the fast actions of competitors.
• Strengthen regulation on the network for enterprise, extending the predicted benefits for the industrial districts to tourism businesses.
3. Actions of the Minister for Tourism
• Temporary task force (3 years) for the implementation of the strategic plan. • Establish a business board with the regions (focusing on the south) to
pinpoint one or two new tourism districts. • Adoption of the European star rating Standard, to be used and applied in all
of the Italian regions. • Focused agreements with tour operators and airlines for BRIC countries and
with low cost airlines. • Implementation of an office and a website dedicated to the promotion of
tourism investments in Italy for international investors (in conjunction with ACE).
4. Other government ministerial actions • Establish an interdepartmental business board (with the involvement of
private enterprises and financial institutions) to study financial incentives and
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fiscal tools regarding benefits for the re-ranking of the hospitality industry. Some examples: – Introduction of credit tax levy and credit benefits for tourism businesses
that adjust to the expected standards, giving priority to ranking higher in categories and larger dimensions.
– Establish a revolving fund co-financed by the regions. – Incentivize large Italian and foreign tourism investments (> € 250
Million). • Launch a plan to release multi-year visas for some priority segments of the
demand (within the Schengen regulation). • Strengthening of public-private actions motivated by the Ministry of Cultural
Heritage and Activities on artistic-museums blockbusters that draw big crowds.
• Operational launch of a network of initiatives of high tourism development (Foundation of university studies and of tourism specialization).
• Establish an operational plan with MIUR to strengthen tourism training along the whole supply chain (train the trainers, ITS, technical colleges and so on).
• Close coordination with airport plans together with the strategic plan for the development of tourism and unblocking of Fiumicino airport.
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15. CONCLUSIONS
This document presents a summary of the Strategic Plan for the development of
tourism in Italy with a temporary time frame to 2020. The objectives of the Plan are mainly three: give back the leadership to Italy in the tourism sector, create new jobs, and offer an unrepeatable opportunity to Southern Italy to latch onto the growth of the nation.
As demonstrated, international tourism is a sector that has strongly increased in the last few years and is predicted to grow significantly further in the next 10 years (rate of annual increase ~5%) in the competitive arena of Italy (Western Europe and the Mediterranean).
Growth is led by the segments of demand of the new rising geographic locations
(BRIC countries) and by affluent Western Europeans (intended as families with net cash assets € 250.000 managed by the banks).
Competitors are also in strong growth thanks to the direct access of the offer through
digital channels and the internet (by promoting unsold products at very competitive prices on the market).
The contribution to the GDP and employment rate of the tourism industry in Italy is
significant: both equal to ~9% and ~10%. Italy in fact has enviable assets which gives it a strong long term competitive
advantage. Even so, because of numerous criticisms in the planning and execution of the tourism product, our country has significantly lost market share, with growth in the last decade of 2% per year, in comparison to ~8% of the market.
Some of the main elements that have contributed to this retreat are: the aging of the
offer, accommodation, transport infrastructure, the ineffective management and state-regional governing, insufficient focus on developing segments, digital channels and the low priority given to the sector (investments, regulation and tax, public image, training etc.).
To change the path, a long term effort aimed and coordinated is needed to put tourism
back in the centre of the government agenda and more in general of the country. The strategic plan “Italian Tourism 2020, Leadership, Jobs, South” forecasts seven
points of fundamental intervention, subdivided to be achieved into about 60 concrete actions. The seven points are:
1. Governance: strengthening of support and central coordination. 2. Re-launch of the National Tourist Board: a re-planning of the task and of the
organization, in line with the best national tourism agencies. 3. Improvement of the offer: focusing on 30-40 priority districts, innovation, affluent
BRIC segments. 4. Hotel accommodation: re-qualify and consolidation. 5. Transport and infrastructure: coherent evolution with tourism needs.
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6. Training and competencies: requalification of tourism education and appeal to the professions.
7. Investments: appeal with specific incentives and “zero bureaucracy”. Implementing actions will allow to re-gain market shares, taking the contribution from
tourism to GDP from € 134 Billions of 2010 to € 164 Billion in 2020 and would create ~500.000 new jobs, as conservative estimate.
This impact on the GDP equals to a ~2% annual main outcome of the growth
generated by international tourism and with a strong impact which is not to be postponed, in regards to the southern regions of the country.
The plan can be operational immediately, with four types of initiatives: legislative
actions, financial allocation to pre-existing tools, actions by the Minister of Tourism and actions by the government and/or inter-ministerial intervention.
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16. REFERENCES
Alma Mater Studiorum Università di Bologna, 2012. “Acquistare Italia. La competitività dell’Italia come destinazione turistica secondo i buyer internazionali”. A cura del Dipartimento di Scienze Aziendali, in collaborazione con il Dipartimento per gli Affari Regionali, il Turismo e lo Sport. American Express, 2012. “Platinum Survey 2012”. A Tout France, 2011. “Rapport d'Activité”. Banca d’Italia, 2012. “15 Anni di Turismo Internazionale dell’Italia”. Economist Intelligence Unit. Database usato per le proiezioni al 2020 degli indicatori macroeconomici. Euromonitor International, 2012. Database usato per composizione della popolazione europea, per fascie di età al 2010. Euromonitor International, 2012. “Travel and Tourism in France”. Euromonitor International, 2011. “Travel and Tourism in Germany”. Euromonitor International, 2011. “Travel and Tourism in Spain”. Euromonitor International, 2011. “Travel and Tourism in Sweden”. Euromonitor International, 2011. “Travel and Tourism in the United Kingdom”. European Commission, 2012. “Attitudes of Europeans towards Tourism”. Flash Eurobarometer n. 334. GFK Eurisko, 2012. “L’Italia come Destinazione Turistica presso i Potenziali Target di Cina e Russia”, n. agosto 2012. Horwath HTL, 2011. “The Future of Luxury Travel”. Documento presentato al International Luxury Travel Market (ILTM), 2011. Instituto Nacional de Estadistica, 2010. “Encuesta de Ocupaciòn Hotelera 2000-2010”. IsNARt, 2011. Indagine sul turismo organizzato internazionale Istat, 2012. Database utilizzato per stimare le presenze di turisti in Italia con dettaglio per Regione, Provincia e circoscrizione turistica. Mercury, 2011. “Rapporto sul Turismo Italiano 2010/2011”. XVII edizione. OAG, 2012. Official Airline Guide. Office of Travel and Tourism Industries, 2010. “2010 U.S. Resident Travel to Europe”.
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Osservatorio Nazionale del Turismo, 2012. “Customer Care Turisti. Rapporto Annuale”. A cura di ISNART, Istituto Nazionale Ricerche Turistiche. Reiseanalyze R. A., 2012. “Selected First Results of the 42nd Reiseanalyse for ITB 2012”. Forschungsgemeinschaft Urlaub und Reisen. The Boston Consulting Group, 2012. “Global Wealth Research”. The Boston Consulting Group, 2011, “Taking Off. Travel and Tourism in China and beyond”. The Boston Consulting Group, 2011. “BCG Chinese Consumer Travel survey”. Tourism Australia, 2012. Australian Tourism Investment Opportunities. Repor of May. Tripadvisor, 2012. “Tripadvisor Ski Index 2011/2012”. Dati disponibili sul sito www.tripadvisor.com. UK Office for National Statistics, 2012. Database utilizzato per determinare la distribuzione delle fasce di età delle popolazioni europee. UNESCO – United Nations Educational, Scientific and Cultural Organization, 2012. “World Heritage List”. UNWTO - World Tourism Organization, 2012. World Tourism Barometer. UNWTO – world Tourism Organization, 2012. Demographic Change and Tourism. UNWTO – World Tourism Organization, 2008. The Chinese Outbound Travel Market. UNWTO – World Tourism Organization, 2009. The INDIAN Outbound Travel Market. UNWTO – World Tourism Organization, 2009. The Russian Outbound Travel Market. UNWTO – World Tourism Organization, 2010. CD-ROM 1995-2010 con flussi inbound e outbound. UNWTO – World Tourims Organization, 2011. Tourism Towards 2030 – Global Overview. Visit Britain, 2012. “Business Plan 2012 – 2013”. WEF – World Economic Forum, 2012. “Travel and tourism competitiveness report”. WTTC World Travel & Tourism Council, 2012. Travel & Tourism Economic Impact France. WTTC World Travel & Tourism Council, 2012. Travel & Tourism Economic Impact Italy WTTC World Travel & Tourism Council, 2012. Travel & Tourism Economic Impact Spain. WTTC World Travel & Tourism Council, 2012. Travel & Tourism Economic Impact.
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17. METHODOLOGICAL APPENDIX
The project for the achievement of a strategic plan, for the development of tourism in Italy began during the month of May 2012 by the Minister for Regional Affairs, Tourism and Sport, Dr Piero Gnudi, having noticed a total lack of unified national laws in this industry. The objective of the project was to carry out an investigation to represent the competitive Italian position in the globalised tourism industry, to pin point criticism, define some bullet points and create some concrete actions.
A competitive procedure, to assign the report to support the strategic plan, has
selected The Boston Consulting Group as technical partner, on the basis of qualitative and economic criteria.
The first step was to establish a work group whose responsibilities were to trace the process to reach the definition of the strategic plan, define and verify the contents and assurance of an agreement between the principal stakeholders involved. The group, headed by the Minister, was coordinated by Professor Massimo Bergami (Economic Councilor for the Ministry) with Andrea Babbi (National Tourist Board), Pier Luigi Celli (National Tourist Board), Mauro Di Dalmazio (Representative of the Regions), Calogero Mauceri (DARTS), Gabriele Morandin (Bologna University), Nicola Pianon (BCG), Roberto Rocca (DARTS) and Ignazio Rocco of Torrepadula (BCG). The report has not impacted financially on the administration.
A “Leading Group” has been appointed responsible for the mapping of the process involving those ministers who’s responsibilities are closer connected to tourism, such as Giulio Terzi of Sant’Agata (Foreign Affairs), Vittorio Grilli (Economy and Finance), Corrado Passera (Economic Development, Infrastructure and transport), Mario Catania (Agriculture, Food and Forestry Policies), Corrado Clini (Environment, Safeguard of the Territory and the Sea), Francesco Profumo (Education, University and Research), Lorenzo Ornaghi (Assets and Cultural Activities) and Fabrizio Barca (Department of Territorial Cohesion). The project was presented during a collective meeting. For the duration of the whole project the work group was in close contact with the Ministers and representatives.
The work group also involved the Councilors for Tourism of the Regions and
independent Provinces, to maintain a tight coordination between the elaboration of the National plan and the Regional policies. The conference between State and Regions has examined the plan and has formulated an opinion addressed to the Minister.
With regards to the information and sources, the BCG team has consulted the
documents listed in chapter 14. Also, the plan takes into consideration the opinions of around 100 key informants of the sector that have been interviewed ad hoc and of 350 international buyers who have replied to specific questions.
The Plan was finally presented by the Minister to the X Commission of the
Chamber of Deputies and to the X Commission of the Senate of the Republic, during the month of October 2012.
The summary document was discussed with the “Premier” during the month of October 2012.
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