Iconic five-star hotels: where value is decided
Five-star hotels in Italy generate €8.7 billion in revenue. Yet the value of an iconic building is not decided by revenue. It is decided in the gap between two margins.
Photo: Photochrom Print Collection, Library of Congress. Public domain.
An €8.7 billion market
Five-star hotels in Italy generated €8.7 billion in revenue in 2025, up from €8 billion in 2024. That is growth of more than 8% in a single year. The segment now accounts for 28% of a hotel sector estimated at €31.4 billion.
These are still preliminary estimates. Thrends presented them at the Luxury Hospitality Conference in Milan, and Pambianco Hotellerie reported them. The scope covers 745 properties in 2025, with 39 new openings expected in 2026. On average, an Italian five-star hotel generates about €11.7 million in revenue a year.
One detail deserves attention. The estimate for the whole sector fell from €40 billion to €31.4 billion after a correction to an Istat figure. Investors always read the source before the headline.
The number that matters sits in the middle
The most useful figure is not revenue. It is the gap between two margins.
| Indicator | Value | Scope |
|---|---|---|
| Average EBITDA margin (Thrends) | 19% in 2025 (17% in 2024) | Financial statements of all properties |
| GOP margin (HotStats) | 41% Jan to Jul 2025, 43% Jan to Jun 2026 | Branded hotels in major cities |
The two indicators are not strictly comparable. They measure different periods and different samples. They do, however, point in a clear direction. The hotel generates strong profitability at operating level. A significant share is lost before it reaches the owner.
The same analysis shows where: rents, management fees, brand fees and fixed non-operating costs. In an iconic hotel, this chain of costs determines the value of the investment more than the occupancy rate does.
A brand can be changed. An operator can be replaced. A historic palazzo cannot be replicated.
Why the iconic building makes the difference
A historic palazzo on a lake, in a city centre or by the sea protects value over time. No competitor can build the same building in the same place. The 39 openings expected in 2026 add supply, but rarely in properties of this kind.
These buildings often come to market at difficult moments. A blocked family succession. Shareholders in conflict. Debt the business can no longer carry. Those who know how to read these situations enter at a price that reflects the problem, not the potential of the property.
Five principles for a fund of iconic hotels
My reading leads to a precise strategy. A fund dedicated to historic five-star buildings should follow five rules.
- Enter through the situation, not the market. The best opportunities arise from insolvency proceedings, successions and shareholder disputes. The entry price reflects the problem to be solved.
- Separate the property from the operation. The owner looks after the building. A specialist operator brings the know-how. Each answers for its own risk.
- Rewrite the cost chain. Operator agreements that link fees and rents to results, with a fixed and a variable component. This way part of the GOP returns to the owner.
- Invest in restoration as a value lever. Capex on the historic building raises the average rate and protects the value of the property. It is not a cost to be squeezed.
- Use regulated vehicles and a long horizon. Funds managed by authorised firms, clear governance, planned exits. Historic assets require time and discipline.
A hypothetical example
Take a theoretical hotel with €12 million in annual revenue, close to the Italian average for the segment. Assume a GOP of 43% and an EBITDA of 19%. The difference is worth about €2.9 million a year.
| Scenario | Margin recovered | EBITDA | Added value at a 6% cap rate |
|---|---|---|---|
| Base | 0 points | 19%, €2.28m | 0 |
| Prudent | 5 points | 24%, €2.88m | about €10m |
| Optimistic | 10 points | 29%, €3.48m | about €20m |
The calculation is deliberately simple and purely illustrative. It makes one point: even a partial recovery of the cost chain moves the value of the property more than many changes to room rates.
Bringing value back to life
A historic hotel is not just an investment. It is part of a place, of its work and of its collective memory. When it stays closed or blocked, the community around it loses value too.
That is why I look at iconic buildings with a single logic. Resolve the situation, put the property back at the centre, entrust it to those who know how to run it, and return it to the community in better condition. Return comes as a consequence of this work, not as its starting point.
Data source: Pambianco Hotellerie, 27 October 2026 (in Italian), based on Thrends and HotStats data.
The views expressed are personal. This article is for information purposes only. It does not constitute an offer to the public, a solicitation to invest, investment, legal or tax advice, or a recommendation to buy or sell financial instruments, fund units or real estate. It does not describe specific transactions or the author’s role in any transaction or vehicle. Market data come from third-party sources, are partly forecasts and have not been independently verified. The numerical example is hypothetical and does not represent expected or guaranteed results. Investments in funds are reserved for persons permitted by applicable law and are made only through authorised managers and the related offering documents.