MTM IXth - Business Plan: Milan 2008-2015: Expo & hospitality

Milan 2008-2015Expo & hospitality

MTM TEAM:

Iulia Davydova

Carolina Mardegan

Marco Lancellotti

Sara Lucarini

Stefania Rampini

TUTOR:

GIORGIO BIANCHI

ASSISTANTS:

Fabrizio Piolanti

Silvia Pinna

Objectives of the work• Produce a complete mapping about accommodation in Milan, in order to define the trend observed from 2008 to 2013• Underline which hospitality solutions are more developed and why• Analyse the growing presence of extra-hotel accommodation and identify its impact on the total supply and on the tourism demand• Develop a forecast income statement applied to a concrete case

Quantitative analysis

On-field and web tourist survey and interviews

to hoteliers

Definition of our area of interest and of our

competitive set

Evolution of accommodation offer in

Milan

Influence of extra-hotel offer in Milan

Analysis of demand in Milan

Relation between offer and demand in

Milan

Trend of foreigner tourists flows

Market Analysis: Quantitative Research

2008 2009 2010 2011 2012 2013604 627 646 685 727 760

Property Growth2008 2009 2010 2011 2012 2013

28735 28465 28982 29004 29796 29913

Rooms Offer Growth Accommodation offer in Milan

Data source: Osservatorio del Turismo, Provincia di Milano 2008/2013

2008 6042009 6272010 6462011 6852012 7272013 760

PROPERTIES2008 6042009 6272010 6462011 6852012 7272013 760

PROPERTIES

2008 287352009 284652010 289822011 290042012 297962013 29913

ROOMS

2008 2009 2010 2011 2012 20130

5000100001500020000250003000035000

MILAN –ROOMS OFFER 2008-2013

N° OF EXTRA HOTEL ROOMS N° OF HOTEL ROOMS TOTAL ROOMS OFFER

-0,9% +1,8% +2,7%+0,1% +0,4%

2008 2009 2010 2011 2012 20130

100200300400500600700800

MILAN - HOSPITALITY OFFER 2008-2013

N° OF EXTRA HOTEL BUSINESSES N° OF HOTELS TOTAL OFFER

+3,8% +3%+6,1%+6% +4,5%

Accommodation OFFER: trends in Milan

As for the typologies of accommodation, we noticed the following trends:

2008 2009 2010 2011 2012 20130

20

40

60

80

100

120

140

160

180

EXTRA HOTEL PROPERTIES GROWTH SINCE 2013

CAMPING SECOND HOUSES (RENT)HOSTELS HOUSES FOR HOLIDAYB&B

Data source: Osservatorio del Turismo, Provincia di Milano 2008/2013

2008 2009 2010 2011 2012 201380%

85%

90%

95%

100%

105%

110%

115%

120%

125%

5 STAR HOTELS

4 STAR HOTELS

2 STAR HOTELS

RESIDENCE

3 STAR HOTELS

1 STAR HOTELS

HOTEL PROPERTIES GROWTH SINCE 2008

Data source: Osservatorio del Turismo, Provincia di Milano 2008/2011

OFFER AND DEMAND 2008/2012Total Offer Growth Total Demand Growth

+4% +26%

2008 2009 2010 2011 2012 -

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

7,000,000

8,000,000

9,000,000

10,000,000

Italian Presences Foreigners Presences

+6%+9% +7%

+15%

2008 2009 2010 2011 201223,000

24,000

25,000

26,000

27,000

28,000

29,000

30,000

Hotel AccommodationExtra-Hotel Accommodations

-0,1%-0,9%

+1,8%+2,7%

Touristic Flows: DEMAND concentration

7%

58%

25%

3% 3% 2% 3%

Demand Concentration

5 stars 4 stars3stars2 stars1 starResidence Extra Hotels

We wanted to analyse where the demand is concentrated, in order to choose which type of accomodation would be more suitable within Milan area.

Data source: Osservatorio del Turismo, Provincia di Milano (2013)

Foreigners growth by country 2008/2012

163.387+211%

Since 2008

CHINA

192.981+119%

Since 2008

RUSSIA

179.866+40,7%Since 2008

FRANCE

177.839+24,2%Since 2008

USA

173.96023,8%

Since 2008

GERMANY

These charts consider the foreigners arrivals in Milan in 2012 and show how the percentages increased since 2008.

Data source: Osservatorio del Turismo, Provincia di Milano (2012)

What about the future?In order to be ready to welcome about 20 millions of visitors for EXPO 2015, we tried to collect some forecasts, searching on the following official web sites and contacting directly some offices such as:

• Union camere

• Confcommercio

• Provincia Milano

• Web sites: expo2015.org; expo_asselombarda; HotelMilanoExpo2015

BUT…

we haven’t been lucky enough to get any kind of information!

WHY???

Probably because nobody has such data yet!!!

Market Analysis: Qualitative Research

AIM: in-depth understanding of tourists’ behaviour and the reasons that drive their choices

Investigate the why and how of decision making usually through focused samples

Make sure the research is trustworthiness

Methodology A survey with simple and precise questions to define

important patterns related to purpose of visit, location preferred, choice influencers, average spending per day

Web survey and face to face interviews in the most touristic places

Face to face interviews to hospitality professionals both for hotel and extra-hotel accommodations

Results: 500+ Tourists’ feedback

Data source: Personal elaboration

*Accommodation included

100 - 300 € 60%Altro 17%

300 - 500 € 16%500 - 700 € 3%

700 + € 4%

Central Station 25%Duomo 21%

Altro 20%Navigli 10%

FieramilanocitySempione 10%Rho-Pero Trade fair 6%

Porta Romana 4%Malpensa

Linate Airport 4%

Location 36%Price 35%Altro 11%

Comforts 11%Design 3%

Free Wi-fi 3%Meeting rooms 1%

Brand 1%Restaurant 0%

Parking  0%

Vacation 25%Work reasons 22%

Studies 19%VFR 12%

Shopping 11%Altro 11%

Cultural events 4%Health reasons 4%

MICE 3%Furniture fair 2%

Trade fairs 1%

Average spending per day

Purpose of visit

Choice influencers

Location preferred

Guidelines from Quantitative & Qualitative analysis

LOCATION PRICE

INDIPENDENT HOTEL

INTERNATIONAL TARGET

Limited offer in Porta Romana/Navigli 14% of

tourist presence

- U.S.A., France, Germany- 30-45 years old stylish persons

58% of tourists choose 4 stars Hotel

Only 1% of tourists are influenced by the brand

* All the percentages are taken from the quantitative & qualitative analysis

ACTUAL SITUATION Concerning the availability of accommodation in Milan, OFFER and

DEMAND don’t follow the same path only 4% offer growth against 24% demand growth from 2008 to 2012

Focusing on tourists’ needs, there are two emerging trends: 1) Budget/low cost hospitality with standardized and limited service, at

usually affordable prices (mainly B&B, second houses and hostels) 2) Hotellerie upscale (in particular, 4 stars hotels represent 58% of

demand concentration in 2013) In Porta Romana and Navigli there is a lack of hospitality offer Price and location are the most important influencers in the

accommodation choice

OUR PROPOSAL A new 4 stars Hotel in Porta Romana area High quality Lower rates than the other upscale hotels in the same area New offer in terms of style and concept

The survey we spreaded among tourists, shows that Porta Romana and Navigli areas were chosen only by 4% and 10% of the interviewed. This means that it has a great potential to be developed, in order to meet the high demand (26 %) compared to the poor offer (4%).

N° strutture per zona

Our area of interestACCOMMODATION OFFER STRUCTURES AV ROOMS AV RATE

5 STARS 1 28 € 375

4 STARS 8 104 € 163

3 STARS 5 63 € 105

2 STARS 2 17 € 67

1 STAR 1 31 € 64

RESIDENCE 4 13 € 147

TOTAL HOSPITALITY 21 256

EXTRA HOSPITALITY 6 25 € 91

TOTAL OFFER 27

New Openings within Milan area2014 > 5 STARS EXCELSIOR GALLIA: Brand

TBA, 235 keys (Centrale) LE GARE HOTEL: Milano

Centrale MANDARIN ORIENTAL: 104

keys (via Monte di Pietà) W MILAN: Starwood Hotels,

76 keys (via Brera) NH HOTEL: Rogoredo Santa

Giulia, 200 keys MOXY: Marriott- Aeroporto

Malpensa

2015 > 4 STARS NH HOTEL: Sesto San

Giovanni, 193 keys

Milan Municipality has chosen this part of the city to refurbish one of its building in order to create a low cost accommodation, confirming the previous data emerged from our market analysis.

ATTR

AC

TIO

NS

PO

SIT

ION

Corso Italia, 49 angolo Viale Beatrice D’Este 1

From Malpensa Airport: A8 highwayFrom Linate Airport: A51 From Orio al Serio Airport: A4

• NAVIGLI AREA: happy hours, pubs, restaurants, vintage stores, antiquate markets, fashion shops, Sinigallia fair, boat trips

• TORTONA/SAVONA AREA: design, contemporary art, culture, “Fuori Salone” trade show, temporary exhibition in lofts

• Colonne di San Lorenzo nightlife

Focus on four 4 stars hotels in the area of interestCompetitive Set

Via Tortona, 35

•Unique originality and design•Everchanging experiences from classical to modern, fashion to underground style•Eclectic and artistic spaces, result of unusual inspirations

Via dei Fontanili, 26

•Make guests feel like home•Comfort with style, not luxury•Fun and friendly atmosphere

Alzaia Naviglio Grande, 8

Viale Isonzo, 14

•Classic, sober and elegant city resort•Old style with modern conveniences•Exclusive location: building from the 1920s, former curtyard transformed into a large garden

•Stylish and elegant•Modern and designed interiors•Real Milan taste: balustrade home with internal curtyard, typical of the city•Fairy-tale residence preserving all the pleasures of the Italian way of life

MiHOTELNHOW MILAN MAISON BORELLA GRAND VISCONTI PALACE

Competitive set analysisQ

UA

LITY O

F S

ER

VIC

E

AVERAGE PRICE

STYLE Blend of design, modern, minimal and bright interiors with

the traditional and typical taste of the real MilanCONCEPT Friendly and stylish atmosphere with artistic lounge space

opened to guests and external visitors Rooms: 143 double rooms used also as singles (30mq) Facilities & Services: restaurant & bar, wi-fi,

transportation from and to the main stations and airports, event room, cultural and enogastronomic tours, weekly sports, partnership with typical restaurants, cultural associations, clubs

WE GUARANTEE WHAT TOURISTS LOOK FOR

WE GUARANTEE WHAT TOURISTS LOOK FOR

Our financial forecast

We can easily observe the curve: the peak is represented by the EXPO, and even after

2016 the GOP keeps growing.

We developed an income statement to forecast the performance of our hotel during and after the Expo.

The Key Performance Indicators show a good trend, with a good total growth from 2008 to 2022

Data source: Personal elaboration

2014 2015 2016 2017 2018 2019 2020 2021 2022€ 0

€ 1,000,000

€ 2,000,000

€ 3,000,000

€ 4,000,000

€ 5,000,000

€ 6,000,000

€ 7,000,000

€ 8,000,000

€ 9,000,000

TOTAL REVENUE GOP (general operating profit) YEAR OCC% ADR RevPAR2014 50% 120€ 60,00€ 2015 70% 155€ 108,50€ 2016 68% 130€ 88,40€ 2017 69% 133€ 91,77€ 2018 70% 133€ 93,10€ 2019 71% 134€ 95,14€ 2020 72% 135€ 97,20€ 2021 72% 137€ 98,64€ 2022 73% 138€ 100,74€

TOTAL GROWTH% 23% 15% 68%++ +

Final observations The lack of data and trends about Expo2015 makes Milan

unable to forecast, plan and consequently match tourists’ needs with a proper hospitality offer

The lack of balance between the demand and the offer has raised a urgency of creating a qualified hospitality offer, able to satisfy specific tourists’ needs

The new offer will succeed only if able to meet preferences and priorities of specific targets

La Corte aims at:

1) Reduce the lack of hospitality offer in Porta Romana area

2) Create a strong image matching the 4 stars high quality with competitive prices

3) Leverage on Expo2015 to position ourselves within the market, but also be able to keep the same standards over the years, due to the strong identity built

TUTOR:

GIORGIO BIANCHI

ASSISTANTS:

Fabrizio Piolanti

Silvia Pinna

MTM TEAM:

Iulia Davydova

Carolina Mardegan

Marco Lancellotti

Sara Lucarini

Stefania Rampini

Aries Crisione

THANK YOU FOR YOUR ATTENTION