Unlike what it might have looked like at the end of February, the demand crisis triggered by the implementation of measures to combat the virus will not explain its effects only on March and April 2020.
The projections for the future of demand for Italy are clearly anchored in the recovery scenarios, therefore at the end of the lock-down.
The most important causes that will generate a reduction in the total volumes of Italian and foreign demand will be:

  1. Vacation mount reduction
  2. Long-haul travel risk increase
  3. Spending power reduction
  4. Booking window reduction
  5. Weakening brokerage system
  6. Information on the resurgence of the epidemic
  7. Supply shortage

The recent THRENDS study presents the first projections of this crisis on the hotel sector, based on the analysis of these factors and those of greatest impact for the top 10 foreign markets for Italy.
In a scenario of the end of the lockdown for Italy on April 15, the study predicts a drop in hotel demand for about 126 million overnight-stays, in practice a -45% on 2018-2019 volumes.
In a decidedly serious scenario, after the lockdown ended on May 15, the study predicts a drop of around 153 million in presences, in practice a -55%.
It should also be considered that the financial crisis that triggered with Covid-19, but which unfortunately has deeper roots, could have a negative effect on business travel globally and in the short term could reduce the demand for Italy over the months of September and October which instead could be considered very promising for the recovery of the numerous events canceled during the first half.
The most affected destinations in Italy will be the cities of art with a potential drop in the annual volume of 2020 of around 50% in the most favorable scenario. Among the foreign markets that will demonstrate a more drastic fall are the USA with expected values ​​from -65% to -72%.

We sincerely hope that these estimates will be contradicted by the reality of the coming months. Much will depend on the strength of the airline sector, the reduction of restrictions on international travel and also on the actual offer placed on the market. If only 15% of the hotels were not to open (not even in July and August) for the 2020 season, demand volumes could be even smaller than estimated. The economic impacts of this drop in demand will be immense. The lost revenues for tourist taxes, at best for -400 million (hotel only), would be the least of the evils. It is important that at government level there is awareness of these scenarios, from today on.

Giorgio Ribaudo, THRENDS analyst.

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