REPORT FROM ITALY—For the ailing Italian hotel industry, business from medical and scientific meetings is providing a much-needed shot in the arm.
Typically sponsored by pharmaceutical companies, these health meetings must be organised to comply with the pharmaceutical industry’s code of conduct that bans the use of five-star properties as well as tourist destinations during the high season.
Some hoteliers are bypassing current restrictions by downgrading their five-star properties to capture this business, thus paving the way for the industry’s recovery.
Medical meetings’ impact
The meetings industry accounts for 11 percent and €23 billion (approximately US$34 billion) of the Italian tourism sector’s business, 30 percent of which comes from medical and scientific conferences, according to Mario Buscema, chief of the health events’ department of Federcongressi, the association that represents the meeting industry’s operators.
|
Mario Buscema, Federcongressi |
“The meeting industry slowdown is severe because of companies’ budget crunches, because enterprises that are facing redundancies don’t want to spend too much for events”, he said. But regardless the economic crisis, business generated from medical and scientific conventions is holding strong.
“While insurance and banking meetings show a significant drop in numbers, the health conventions sector records a contractions in budgets, but with a still relevant number of events”, said Mario Alovisi, Royal Group Hotels & Resorts’ sales and marketing manager.
The positive impact of medical meetings business is primarily concentrated in four-star properties.
“Medical (conventions) account for 50-70 percent of the meeting business in four-star hotels and for the 30 percent in the five-stars”, explained Massimiliano Corradino, Boscolo Hotels’ manager of meetings, incentives, conferences and events.
The code
The code of conduct of Farmindustria—the trade association that represents the pharmaceutical industry operating in Italy—establishes strict limitations to five-star structures.
“Pharmaceutical companies can make use of four-star properties only, and tourist destinations are allowed just during low-season. Exceptionally, it is possible to choose five-stars if the event is national or international, promoted by a national or international organisation and with at least 1,500 participants. In this case, the meeting can be held in five-star convention halls, but the rooms can be assigned only to foreign guests”, said Emilio Stefanelli, vice president of the association.
Farmindustria justifies the code as a way for the pharmaceutical sector to avoid scrutiny for organising high-end “holiday conventions”, Stefanelli said. Yet it has received harsh criticism from many hoteliers who say it’s too restrictive.
|
|
|
“These rules shrink hoteliers’ freedom. Hoteliers—even on the Naples seafront—sometimes decide to downgrade properties from five to four stars or not to rise”, said Alovisi. “Of course, it is just a nominal downgrading, because services remain the same. It can be a strategic choice to not lose a very important business, (but) it is an unjustified limitation. “I don’t know how it can be relevant in an ethical perspective to make a distinction between five and four stars”, he continued. “Rather, the total expenditure should be taken into account. The reality is that prices of a five-star hotel are not always higher than a four”.
That focus on total expenditure is at the heart of suggested revisions to the code of conduct presented by Aica, an association that represents Italian hotel chains.
“We suggest a revision of the code, and we underline the role of the value for money”, said Elena David, president of Aica as well as managing director of UNA Hotels.
Whether Farmindustria will adopt these revisions has yet to be seen, but the association’s representatives are open to some compromise—especially during such harsh economic times.
“We are talking with their representatives to find solutions, to allow at least international conventions in any properties, regardless of ratings, or lowering the required number of participants”, Stefanelli said. “We don’t want to spite hoteliers in such hard times, and we want to attract international meetings”.
However, the criterion of cost—while fundamentally sound—might be too opaque and difficult to put into practice.
“What hoteliers say is true: Costs should be the parameter. But this solution can be even less transparent. I know that probably the code is too rigid, but we want to avoid the possibility of some companies or hoteliers acting differently than others. (Our code) is not just a problem of public opinion, but a way in which we assure competitiveness among enterprises. We want the same rules for everybody”, Stefanelli said.
Meetings business on the international stage
In an attempt to assure competitiveness, some hoteliers are arguing the code is doing precisely the opposite.
“The pharmaceutical companies are multinationals that can make comparisons among different countries. Obviously, in Italy there are limitations (because of the code)”, Corradino said.
The code prescribes that a tourist resort can host a convention only during the low season.
“This restriction doesn’t exist for foreign destinations. There isn’t any rule that forbids going to Ibiza (Spain) during summer. We are talking about Italy’s competitiveness. We must not castrate it, what’s more voluntarily”, David said.
That’s not to say the code is the sole hurdle to overcome. Italy’s inadequate infrastructure and seasonality in some regions have also contributed to its struggles compared to neighbouring countries.
“First of all, infrastructures and transports are still relevant issues. In the South of Italy, for example, there are excellent locations, but they are not supported by appropriated connections and infrastructures”, David said. “Secondly, the seasonality of many places weighs in a negative way: For the meetings industry to offset tourism flows, the resorts must be alive even during the low season”.
Versilia, a seaside resort in Tuscany, is a case in point. The location swells with tourists and holiday-makers during the summer months, but as that business scampers away during the winter months, the property nearly shuts down. Aica is working with Versilia Meeting, a consortium of enterprises and institutions, to foster activity year-round in an attempt to attract conventions during the off-season, according to David.
These property-level efforts are to be commended, but they still don’t address the country’s widespread inability to book as much group business as its neighbours.
“The question is that there isn’t a global, national policy. Promotion is implemented at local level”, Corradino said.
“Until now, Italy as international meeting destination hasn’t been boosted enough because of a lack of institutional promotion policies”, Buscema said. “But there is another issue: Here there are many convention centres, but of medium and small sizes, not suitable for international events. Just recently, bigger structures are being developed”.