Tourism 4.0: the perspectives of the National Recovery and Resilience Plan

by Mirko Meuti | Jun 22, 2021 | Blog

Premise

The National Recovery and Resilience Plan (“PNRR”) recently approved by the Chambers of Deputies provides for, among the various interventions on the Italian economy, an important direct support to the improvement of tourist accommodation facilities and tourist services, with the aim of upgrading and improving the standards of supply in the sector, with the dual objective of increasing the competitive capacity of businesses and promoting a tourist offer based on environmental sustainability, innovation and digitalisation of services.

 

Planned interventions

The action includes measures to upgrade and modernise businesses operating in the tourism sector in order to increase their level of digitalisation. To this end, EUR 2.4 billion has been earmarked, divided into three different investment lines:

  • The creation of a digital tourism hub, which will absorb about 100 million euros. This hub will be accessible through a dedicated web platform, which will enable the entire economic system of tourism to be connected in order to enhance, integrate and promote its sector;
  • the allocation of integrated funds for the competitiveness of tourism enterprises, which will absorb about 1.8 billion Euro. In particular, these funds will be divided up as follows:
    • 530 million euro tax credit to increase the quality of tourist accommodation with investments aimed at environmental sustainability (e.g. use of renewable sources with lower energy consumption), upgrading and increasing the quality standards of Italian accommodation facilities;
    • EIB funds (EUR 748 million). A fund with a 1:3 leverage effect capable of generating more than two billion investments. The Fund can raise capital through participation in initiatives by European financial institutions to grant subsidised loans to the tourism sector;
    • Enhancement of the National Tourism Fund (150 million) for the redevelopment of properties with high tourism potential, particularly the most iconic hotels;
    • Special Tourism Section of the Central Guarantee Fund (358 million) to facilitate access to credit for entrepreneurs running an existing business or for young people who intend to start their own business;
    • Participation of the Ministry of Tourism in the capital of the National Tourism Fund, a fund of real estate funds with the aim of purchasing, renovating and upgrading Italian hotel facilities.
  • The third action, called Caput Mundi-Next Generation EU, which will absorb about EUR 500 million, is entirely devoted to the redevelopment and revitalisation of the city of Rome. The action is essentially aimed at the regeneration and restoration of Rome’s cultural and urban heritage. In particular, interventions for the regeneration of peripheral areas, parks and the digitalisation of cultural services will be the focus of the project.

 

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Opportunities to be seized, also in business combinations

Culture and tourism are key sectors of the Italian economy, given the extraordinary historical, artistic, archaeological and landscape heritage belonging to Italy. It is estimated that the added value generated by tourism in Italy in the pre-Covid era was around 38 billion Euros. Unfortunately, with the advent of the Pandemic, the sector collapsed considerably and was certainly among the hardest hit by the crisis.

In the face of this, ‘recovery’ is the watchword. In response to this need, the State, in formulating the PNRR, has acted on fundamental levers for development, such as technological and organisational innovation, the enhancement of skills and the quality of services. The interventions and funds made available will create multiple opportunities for revitalising operators in the sector, both for businesses and organisations already operating in the past, and for new entrepreneurs who intend to start up a business in the field of tourism.

There are also important new developments for all the major cities of art, which will be able to take advantage of the virtuous circle created by the relaunch of the tourism sector by improving infrastructure and accessibility.

In view of the framework described above, operators in the sector could also find interesting opportunities in the M&A field.  In Italy in particular, it is expected that there will be an increase in transactions in the sectors that were most affected by M&A in 2020, including tourism and real estate. Business combinations have always been seen as operations aimed at creating value through exogenous factors. In this context, some more structured economic entities may consider favourably the opportunity to draw on the financial facilities provided in the NRP to incorporate or acquire the economic entities in the sector that have suffered most from the negative impact of the pandemic.

 

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