Seasonality on Hotel Performance: the Case of Milan

Milan is Italy’s second largest city (after Rome), with its metropolitan area accounting for a population of 3.9 million (ISTAT 2008). It also occupies a significant position in the country’s tourism sector and has several strong points as a destination. At the same time, Milan’s current positioning also reveals some crucial weaknesses. Milan’s tourism industry remains stubbornly seasonal. This ‘rhythm’ is dictated above all by the trade fair activity. The average stay in Milan is shorter than in Italian heritage destinations and in European benchmark destinations (ISTAT 2008). Furthermore, there has recently been a significant fall in some segments of foreign clientele (Japanese, British and German) who are important to the city in terms of volume and spending capacity. A research report on Milan (De Carlo 2008) based on a semi-structured questionnaire concerning 120 city hotels (chosen for their level of quality, size and location in the city) revealed that the business market constitutes the primary target for Milan (40%). Trade fairs alone account for 32 percent, whilst the leisure segment accounts for 20 percent and the congress segment amounts to 4 percent, with a further 5 percent coming from other segments. In detail, the business clientele is mainly attracted by the numerous firms operating in the city and the hinterland; we may recall that Lombardy and the province of Milan in particular have one of the highest ratios of business per thousand inhabitants in Europe. This segment is fairly transversal regarding star ratings (40% 3 stars and 39% 4 stars), prefers larger-sized structures (48%) and varies to a smaller degree in the different areas dividing the city, although a greater concentration is found in the outlying districts (62%), located near to the ring roads and motorways. The trade fair clientele is attracted by the numerous events organised by Fiera Milano, the public limited company in charge of the management of the two trade fair centres in the city. Fiera Milano has a wide, diversified portfolio of events, in most cases able to attract a large public, made up of exhibitors and buyers. In 2006 1.9 million square meters were sold, while the number of exhibitors stood at 30,000 and the number of visitors at over 5 million. The Fair however generates wide-reaching effects on all the structures situated in other areas of the city, while smaller flows are seen towards outlying hotels (15%). Size-related data, however, do not reveal particular differences. On the whole, the leisure segment has a smaller share (20%). Again in this case, no particular differences are noted for star ratings – 22 percent for 3 stars, 18 percent for 4 stars. Location shows a greater swing in values, with higher percentages on average for the Centrale-Loreto area (22%) where the main railway station is situated, and Città-Studi Navigli (26%), where many of the city leisure venues are concentrated. The smaller importance of this segment is mainly linked to the city’s image, above all as a business and trade fair destination. The congress segment has a much smaller percentage (4%), similar to that of the residual item composed of other clients (5%).