Luxury hotel development in southern Italy expands beyond Sardinia

Luxury hotel development is stepping up in Italy’s Mezzogiorno (south), especially in Apulia, the Amalfi coast and Sicily.

Sardinia and its spectacular Costa Smeralda on the island’s northeast coast have for decades been populated by leading luxury hotels which achieve some of the highest RevPAR’s in Europe during the summer holiday season.

Now luxury hotel development is spreading to other parts of the Mezzogiorno (southern Italy), with new hotels and projects in Apulia (the south eastern tip of Italy), the Amalfi coast and, especially Sicily.  

Borgo Egnazia offers a ‘transformative’ experience

The luxury resort, Borgo Egnazia, located in Apulia, offers guests an innovative and authentic experience. The resort strives to integrate guests into the life and culture of the local community, which argues in favour of its sustainable credentials. Indeed, Borgo Egnazia claims to take the resort experience from the ‘experiential’ to the ‘transformational’ level. For instance, in addition to the normal offerings of golf, tennis, water sports and wellness, guests are encouraged to participate in local activities, such as cooking ‘slow food’ and attending village festivals. Upon arrival, guests are greeted by a ‘local adviser’ whose role is to act as a special ‘local friend’, enhancing the guest experience and nurturing long-term relationships with clients, well beyond their stay.

Borgo Egnazia was launched in 2010 by San Domenico Hotels Group which was founded in 1996, when a private house was converted into a hotel. The property is set on 30,000 sq m within a wider area of 17hectares that includes a golf course and beach and offers a total of 183 keys, consisting of casettas (small houses) and villas.

The mastermind behind Borgo Egnazia, its managing director, Aldo Melpignano, has transformed his family’s hotel business into a first class luxury resort that is affiliated to Leading Hotels of the World. Borgo Egnazia claims to promote “searching for experience (more than luxury)” and local heritage, emphasising “employee wellbeing and commitment”. “Working for Borgo Egnazia means connecting to something bigger than a job”, remarks Aldo Melpignano. Nevertheless, as a former Credit Suisse investment banker and Wharton School (also Trump’s alma mater) graduate, Aldo Melpignano is focused firmly on the bottom line. Indeed, the profits seem to be rolling in, with ADR, RevPAR and NOI all increasing at a double-digit pace since the property opened for business in 2010. A further 17% rise in NOI was projected for 2018.

Starhotels’ push into the south

Florence-based Starhotels was founded in 1980 by Ferruccio Fabri, an engineer, and today the chain is led by his daughter, Elisabetta Fabri, a graduate of the Ecole hôtelière de Lausanne,  who is president and CEO. The group owns and operates 29 hotels with over 4,000 rooms, five of which are located abroad, and serves about 2 million guests annually.

In an interview, published at end September 2018 in L'Economia del Corriere della SeraElisabetta Fabri, CEO of Starthotels, Italy’s leading upscale and luxury chain, laid out the group’s plans for building luxury hotels in Sicily, Apulia and Campania (Amalfi Coast, south of Naples).

"We will continue to do everything in the family without foreign partners, not even private equity funds", she notes, asserting the typical desire of Italian family hotel operators to retain complete control over their business. "Our hotels are located in the heart of 14 destinations and convey all the love for Italy and its beauty. Now we look to the south; we are interested in Sicily and a high-end destination like Taormina (east coast of Sicily). Italy cannot be a low-cost destination”, she concludes.

Forte to expand in Italy 

Sir Rocco Forte, the chairman of the luxury hotel company, Rocco Forte Hotels, has a special attachment to Italy, the country from which his father, the famous hotelier, Lord Forte, emigrated in 1912. With the help of his three adult children, Forte is planning to open five new luxury properties, to be located predominantly in Italy, over the coming two years.

“They have a much younger perspective and are not afraid to tell me what they think. And I think it adds value to the business in that way,” states Forte, who adds that, “It also gives a feeling of continuity to the business as there is a greater family presence in the hotels themselves.”

Among the London-based group’s first new openings in seven years are four properties in Italy. The Hotel de la Ville in Rome and the Masseria Torre Maizza in Apulia are scheduled to open in May 2019, as well as the first Rocco Forte House luxury serviced apartment in Rome in September. The iconic Grand Hotel Villa Igiea will reopen in Palermo, Sicily, in 2020.

Given his Italian origins and business relationships, Forte intends to continue to search for opportunities in Italy. The group already operates the Hotel de Russie in Rome, the Verdura Resort in Sicily and Florence's Savoy Hotel, which underwent a major renovation in 2017. “I want to complete the network in Italy. I want to be in Milan, Venice and the Amalfi Coast,” Forte remarks, adding that, “I can do probably quite a number of smaller hotels in the cultural cities, as well.”

Forte is especially excited about the revival of the Grand Hotel Villa Igiea in Palermo, which was built at the beginning of the 20th century and had a history of hosting royalty and Hollywood film stars before falling into disrepair. “It's a Libertine-style building, and it's a little jewel,” he notes, adding that, “It coincides with a renewed interest in Sicily as a tourist destination, and Palermo itself is having a bit of a revival. Many people are buying old houses there and palaces and doing them up.”

Photo credit: Borgo Egnazia,

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