The International Hotel Law Review: Italy
The Italian hotel market occupies a leading position in the world for the number of available rooms, ranking in fourth place after the US, China and Japan, before Germany and Spain.
Italy has a higher number of accommodation facilities than other European countries. Non-hotel establishments predominate with a continuous growth trend, especially bed and breakfasts; this trend has obviously come to a dramatic stop due to the covid-19 pandemic.
Italy has very fragmented local legislation about hospitality and alternative forms of hospitality, so that it is almost impossible to keep track of all the existing structures, as some forms of hospitality are not formally recorded as hotels or bed and breakfasts.
In general terms, there is national legislation on leases, which has a few provisions about hotel leases.
Aside from this, there are some regional laws about bed and breakfasts, agri-tourist structures and short-term leases. There are also some municipal regulations about touristic tax to be paid by each person visiting the town, and some municipal restrictions to the development of new hotels.
The above must be taken into consideration as Italy is a touristic country, with a market that is spread out all over its territory.
As regards transactions, in 2018, investments in the hotel sectors reached an amount of €1.13 billion, recording around 60 important sale and purchase transactions, 20 more than 2017.2 2019 has confirmed the increasing trend and the total transaction value reached around €2 billion. Unfortunately, due to the impact of covid-19 impact, in 2020 transactions decreased by 60 per cent as opposed to 2019, with at least 50 per cent of the deals closed in the first three months of the year.3
Demand from international investors mainly concentrates on Milan and Rome, followed by Florence and Venice, representing 80 per cent of the transactions, as opposed to 70 per cent in 2017.4
Flows are concentrated in high-end hotels (120 million in four- and five-star hotels, equal to 45.7 per cent of the total) and average (123 million in three-star hotels, equal to 46.7 per cent), while the share of one- and two-star hotels (19.4 million or 7.4 per cent) is a minority.5 The typical target is made up both by large families or by young groups. Strong attention is paid to automation, limiting employment costs.
In Italy, there are over 1,600 hotels belonging to chains or groups, for a total of about 180,000 rooms. However, the majority is still owned by families, which has been considered the main barrier for foreign investors accessing the Italian market.6
There are several implications linked to this aspect: a first issue linked to the fact that families very often own hotels of a size not significant for international investors and having to combine at least two or three deals with private parties not used to international standards may become very demanding. A second reason is linked to the opposition of owners to accept management contracts. As the market knows, the management liability is something that owners do not want to share. However, in a mature market they have found a balance on applying this international model, while in Italy it is applied only by international chains.
An all-Italian feature is the widespread presence of family groups, consisting of two or three hotels.
Rome has started to develop hyper-luxury hotels only quite recently. After 20 years of having only three luxury structures, the city now hosts 49 five-star hotels, belonging to international brand, not necessarily associated with traditional hotel brands.
In 2020, 58 per cent of hotel investors were foreigners (as opposed to 69 per cent registered in average in the past five years), mainly insurance and pension funds.7
A final remark must be made with regard to the impact of the covid-19 pandemic on the hotel sector. Currently, in Italy hotels can operate; however, they have to adopt measures such as:
- providing adequate information on prevention measures, understandable also for customers of other nationalities;
- body temperature may be checked, preventing access in the event of a temperature of above 37.5°C;
- ensuring compliance with the interpersonal distance of at least one metre in all common areas and encourage the differentiation of paths within the structures, with particular attention to the entrance and exit areas. We suggest, in this regard, posting information signs or to delimit the spaces (for example, with stickers to be attached to the floor, balls, track markers, etc.);
- the desk and reception desk workstation can be equipped with physical barriers (e.g., screens) and, in any case, the hotel will favour electronic payment methods and online booking management, with automated check-in and checkout systems where possible;
- at the end of each work shift, the receptionist must clean the work surface and the equipment used;
- guests must always wear a mask, while employees are required always to use the mask when in the presence of customers and in any case in all circumstances where it is not possible to guarantee the interpersonal distance of at least one metre;
- ensuring a wide availability and accessibility to hand hygiene systems with hydro-alcoholic solutions in various locations within the structure, promoting their frequent use by customers and employees;
- each object supplied for use by the facility to the guest must be disinfected before and after each use;
- the use of lifts must be such as to allow respect for interpersonal distance, even with the mask, providing for any exceptions in the case of members of the same family or group of travellers;
- ensuring frequent cleaning and disinfection of all rooms and rooms, with particular attention to common areas and surfaces touched more frequently (handrails, light switches, lift buttons, door and window handles); and
- as for the microclimate, it is essential to check the ventilation of the premises and ventilation systems and the subsequent implementation during maintenance periods of adequate spare parts and indoor air quality.
Consumer preferences post covid-19 have promoted a change in hotel room redesign and an acceleration of technological advances. During the pandemic, consumers slowly began to travel again, developing clear preferences for larger, individual and private spaces in order to stay more comfortably and for longer periods of time and work productively remotely. For this reason, hotels that can offer more extended stay arrangements or more traditional hospitality services such as rentals have performed better than more traditional accommodations. Furthermore, there has been a strong acceleration in technological investments by sector operators, as a touchless or contactless service has become a priority for consumers.
There are no restrictions on the purchase of real estate assets in Italy to foreign operators.
Foreign investors may acquire real estate assets either with a foreign entity or by incorporating an Italian company.
The main difference is, therefore, represented by the fiscal impact deriving from the location of the owner.
If the hotel owner is based in Italy, all taxes deriving from the activity, as well as property tax will have to be paid in Italy.
If the hotel owner is based outside the national boundaries, a specific evaluation has to be made to assess if the owner may be considered as having a stable organisation in Italy.
In principle, the mere ownership of a real estate asset does not imply a stable organisation. On a similar basis, not even the leasing of real estate assets imply a stable organisation. However, if the leasing outlines that an entrepreneurial activity is carried out with the asset such as an hotel activity, the owner will be treated as a subject having a stable organisation in Italy and will have to pay taxes according to Italian fiscal law.
As far as the purchase agreement is concerned, the two main hypotheses concern either the direct purchase of the real estate asset or the purchase of the quota of the company owning the asset, obviously the asset has to be owned as single asset.
i Real estate purchase
The main contract is a sale and purchase agreement of real estate assets.
In this case, the object of the deal is the sole premises, which may be either empty or fitted out. Any other elements, such as the operating licence, the staff or the trademark, are not part of the contract and might be the object of one or more separate agreements.
From a fiscal point of view, the property purchase is subject to a fixed registration tax having a very limited amount (€200,00), plus VAT at the rate of 22 per cent of the purchase price, if the asset is built less than five years (from the date of construction completion) prior to the sale or purchase agreement. In any other event, beside registration tax, the sale is subject to a mortgage tax and a land registry tax, for a total amount of 4 per cent of the property price (i.e., 3 per cent for mortgage tax and 1 per cent for land registry tax).
While the VAT tax is a tax that can be compensated by the purchaser with any VAT issued with its own activity invoices, the mortgage tax and the land registry tax are taxes that become a transaction cost, and cannot be recovered.
While negotiating the price and preparing a business plan for such a transaction, it is, therefore, very important to remember that there is a 4 per cent cost having a significant impact.
Once the asset is purchased, the depreciation of premises (which must be considered net of the value given to the occupied areas) is tax deductible on a yearly basis.
The advantage of purchasing a single real estate asset is that the deal does not create any link with the previous company owner, as there is no corporate liability transferred with the ownership.
The main attention during the due diligence preliminary to the sale and purchase agreement must be paid to the characteristics of the building and its building authorisations.
In particular, a proper due diligence should check the building permit and any relevant permit concerning possible works, modifications, carried out after the completion of the building; the fire prevention certificate, the right of use certificate, all the plants certificate, the cadastral plan and its correspondence to the real existing building and the energy certificate.
In the case of lack of conformity between the building and the building permit and or the cadastral plan, the notary cannot proceed with the sale agreement. Any purchase agreement of a real estate asset based in Italy has to be signed before a public notary, otherwise the contract is not valid.
Should the building not correspond to the building permit, the seller should be asked to either require a permit authorising the lack of conformities – if possible – or to demolish the portion of the building not authorised, as the lack of correspondence between the building and the permit is a criminal violation and an administrative breach by the owner at the time of the inspection, even if the breach was done by a previous owner.
ii Company shares purchase
The contract is a sale and purchase agreement of real estate assets.
In this case, the object of the deal is the purchase of the quota or shares of the company owning the real estate asset. As opposed to what was outlined in the previous hypothesis, the entire business is sold with the asset, therefore the company will have an operating licence, the staff (unless expressly dismissed with a specific procedure), the trademark and any other elements characterising the business.
From a fiscal point of view, the share purchase agreement is not subject to VAT, being subject to a fixed registration fee of a very limited amount (€200,000).
Mortgage tax and land registry tax are not due, corresponding to a net 4 per cent saving as opposed to the real estate asset purchase.
However, the purchaser inherits the company property history that might imply a joint liability, especially for tax payments and labour payments. From a negotiation point of view, the purchaser usually asks for a guarantee from the seller. However, this does not prevent the Fiscal Authority from asking for payment for the two years before the sale.
While negotiating the purchase of a company, the due diligence must concern all the documents concerning the assets, as outlined above, and the documents concerning the corporate aspects, such as balance sheets, fiscal declarations and payments, etc.
A special mention has to be made with respect to the structure of the real estate fund.
The real estate fund has the advantage of paying a reduced amount of tax both in the transaction phase and in the ownership phase. However, the rea estate fund has a significant management cost, therefore it is convenient only in the case of assets of significant value.
Under Italian law, a private party cannot incorporate a fund on its own, as you need to have at least two quota holders.
From a zoning point of view, a hotel structure can be built or located only in areas or buildings that have a specific 'accommodation destination'.8 Each municipality has in its plan for specific destinations and, when dealing with existing town centres, there is very often a provision for use that is compatible with zoning, such as hotel use.
In some towns, such as Venice, in recent years there have been specific restrictions on the opening of new hotels.
The accommodation destination is also compatible with the running of a restaurant or bar inside the hotel, as it is considered as a complementary use.
To run a hotel, the specific operating licence has been substituted by a self-made declaration that has to be submitted to the municipality; the same procedure has to be followed in the case of restaurant or bar activity. However, the applicant has to enclose a detailed plan of the asset, showing compliance with all fire prevention and health measures.
Another aspect that should be analysed is the hypothesis of renovation works: depending on the kind of works, the owner would either need a building permit or a simple declaration of starting the works.
For assets located in the town centre, there is usually a special protection burden, and, therefore, any kind of work will have to be authorised by the Arts Authority. In normal cases it is enough to wait for 60 days without receiving any replay.
With regard to operation, in Italy, the majority of operations are still based on lease contracts (36 per cent), while franchising is increasing (20 per cent), and the management agreement is still very much in place (5 per cent).9
Hotel lease agreements are expressly regulated by Law No. 392/1978.
This kind of contract has a duration of at least nine years that is automatically renewed for a further nine-year period.
Upon the first expiry date, the landlord has very few chances to refuse the renewal, as the only grounded reasons set forth by the law are linked to the need of the owner to use the premises as its own residence, residence of his or her family or linked to the intention to completely renew the building.
However, the tenant may withdraw at the first expiry date by giving 12 months' notice without a specific reason. During the life of the lease, the tenant may withdraw with 12 months' notice, but only for grounded and serious reasons.
According to the above law, extraordinary maintenance is up to the landlord, while ordinary maintenance is carried out by the tenant. Parties may regulate the matter with a different solution.
The rent is usually updated on a yearly basis according to 75 per cent of the inflation index. The leasing may set forth a combined rent: (1) a fixed amount as minimum granted rent, and (2) a variable amount linked to the turnover of the activity.
The tenant should usually pay a deposit equal to six months' rent. However, several landlords ask for a bank guarantee.
A peculiarity of Italian legislation is that if at the expiry of a lease the landlord decides not to renew the contract with the same tenant, it will have to pay a goodwill indemnity equal to 18 months' rent. The provision is quite fixed and cannot be derogated for several years. Most recently, a modification to the leasing law has introduced the possibility to derogate from these provisions only for a leasing with a rent higher than €250,000 (large leasing).
Intellectual property and branding
It is well known how important branding and intellectual property protection is in the hotel market. A good marketing strategy is strictly connected with the brand, the logo and the name of the hotel, or of the hotel chain, and its recognition by the consumer.
Hotel owners and managers are, therefore, very active in protecting their brand not only among tourist operators, but also in other fields that even theoretically could impact on their brand.
A recent case has seen Marriott against the football club company owning AC Milan.
The European Court of Justice10 has established that the two brands do not create any confusion, judging that the AC Milan brand and that of Marriott hotels do not look alike. The common features are the letters 'AC' in one case almost invisible, and in the other large.
In 2013, the Associazione Calcio Milan SpA (AC Milan) obtained the registration of the AC Milan figurative sign from the World Intellectual Property Organization, notified to the European Union Intellectual Property Office (EUIPO) to make it valid as a European trademark for a whole range of goods and services, including hotel services.
In 2014, Marriott Worldwide Corp. opposed the registration of this sign as a European Union trademark by relying on its earlier marks, namely:
- the verbal mark AC; and
- the figurative mark AC Hotels Marriott.
In 2017, EUIPO rejected the appeal, thus maintaining the AC Milan brand.
However, Marriott Worldwide appealed the EUIPO's decision before the Court of the European Union. With the above ruling, the EU Court dismisses the appeal, 'excluding [explains a note] that among the conflicting marks there is no risk of confusion, from a visual, phonetic or conceptual point of view. Therefore, once again, the AC Milan brand is maintained'.
A more local case has seen the international hotel chain Choice Hotels International Inc and Choice Hotels Franchise GMBH go up against a local hotel operator, managing an hotel in Rome and using in the marketing of its activity the words 'quality' and 'comfort'.
Since the international chains had registered several names and trademark also combined with the words 'quality' and 'comfort', the use of the words in the same hotel field has been judged a breach of the intellectual property law, and the operator has been condemned to cease all use and pay damages.11
Data and hotel tech
The introduction of the GDPR has had a significant impact on the management of the processing of personal data by the accommodation facilities. To comply with the regulations, managers of hotels and B&Bs must proactively intervene and revise their operating practices so that the adoption of the broadest precautions aimed at effective protection of guests' personal data is always demonstrable.
For the collection of data for the purpose of managing bookings or for checking-in, based on the legislation currently in force, there are no specific provisions for hotels or accommodation facilities, whether the data is provided for carrying out an online booking or given upon arrival at the hotel. The hotelier, therefore, will simply have to make sure to provide its client with information in accordance with the provisions of the 2016/679 Regulation, containing the following indications:
- the purposes for which the data is processed and the methods of treatment;
- if the provision of the requested data is mandatory or optional and the consequences of a refusal to respond;
- the subjects or categories of subjects to whom the data may be communicated or who could access them as managers or agents;
- the methods of exercising the rights referred to in Article 7 by the interested party or, by way of example, the right to obtain confirmation of the existence or not of personal data concerning him or her, to oppose the processing, to request its cancellation; and
- the identity of the owner and manager of the treatment.
Once provided with the correct information, the hotelier must receive the express and free consent from the customer. Thus, only if the data is collected and processed for purposes other than the communication of the generality of the people housed at the relevant police headquarters or if further and unnecessary data for the aforementioned fulfilment are accepted.
Particular attention must be paid if the hotelier has an interest in processing the data (email, telephone number, residential address) for marketing purposes (i.e., if they wish, at a later time, to send the customer commercial communications, thanks to promotions, initiatives or events).
In this case, specific information on the use must be provided and specific consent must be requested.
As already specified, if the data is collected by the hotelier for the sole purpose of communicating to the police headquarters electronically, it is not necessary to obtain the express consent of the customer. The communication of the name and data of each guest to the police headquarters is mandatory in Italy for each hotel operator.
However, certain rules must be respected:
- the data collected must be used exclusively for the aforementioned purpose;
- data other than those necessary must not be collected (i.e., name, surname, gender, date and place of birth, citizenship, type and number of document as well as place of issue, date of arrival and days of stay); and
- data collected in paper or digital form must be destroyed by the managers of the accommodation immediately after receiving confirmation of the transmission.
Even the installation of a video surveillance system, in some cases necessary to guarantee the safety of the customers of a hotel and to protect the property. Important precautions are required to be set up so that fundamental rights and freedoms are protected, in addition to the safety, of those customers.
The issue has been the subject of numerous measures of the privacy guarantor who, following inspection by the Special Privacy Unit at first-rate accommodation facilities, has found itself having to sanction anomalies and violations.
The first precaution relates to the information pursuant to Article 13 of the Code. Interested parties must always be informed that they are about to enter a video surveillance area. This information can be made in a simplified form by following the models provided by the guarantor himself or herself. Furthermore, suitable safety measures must be adopted to minimise the risks, for example, of unauthorised access, of treatment not allowed or not in accordance with the purposes of the collection.
All persons authorised to access the control stations, to view the images or to use the systems must be designated in writing by the owner or manager as persons in charge of the processing. However, it must be a very limited number of people.
If a surveillance system that provides for the recording of images is used, the duration of data retention must be proportional to the time necessary to achieve the purpose. The guarantor speaks of a few hours, a maximum of 24, except in special cases for which the times can be extended by up to a week. The possibility of keeping them for a longer time must be subjected to scrutiny by the guarantor with a specific appeal and is granted only in the case of proven needs.
Lastly, hotels are places of work and, therefore, particular attention must be paid to positioning cameras in such a way as not to allow remote monitoring, which in Italy is expressly forbidden.
If control is possible, it will still be necessary to sign a special agreement with the union representatives or request authorisation from the labour inspectorate.
The violation of the privacy provisions by hoteliers, verified following an express report to the guarantor or following an inspection by the police authorities, is sanctioned by the sentence to pay a sum of money commensurate with the entity of the violation, unless this constitutes a more serious offence. In any case, the possibility of being called by the interested party to pay damages suffered from the violation of their privacy is reserved.
Franchising of hotels
In Italy, hotel franchising has not had the same success in other areas, such as in retail or services.
The hotel franchising formula still only makes up a small fraction of the market, even though the highly fragmented ownership of the Italian market would seem a good field for said solution.
Franchising contracts in Italy are regulated by Law 129 dated 6 May 2004, which is a general law about franchising not having any specific provision for the hotels.
Franchising in the hotel sector is a commercial affiliation system in which the franchising hotel company (franchisor), upon payment of a fee, grants each individual affiliated hotel (franchisee) a supply of services and sometimes products for consumption, some management methods and the right to operate with the franchisor brand.
The franchisor carries out promotions, manages and supports advertising and uses a particular method of entering the market, using a precise know-how and a layout characterising the hotel group's commercial brand.
Each franchising chain has points of originality and its own specificity. This specificity, which is at the same time a specific element, must be perceived by the guest and identifiable in each hotel, both nationally and abroad. The franchisee has a certain operational freedom. However, the indications contained in the contractual rules and in the operating disciplinary must be scrupulously followed to be easily recognisable by customers in each town and offer identical services.
Even some aspects that may appear to be of minor importance, such as staff uniforms, must be the same. Also, as the characteristics of the sign (height, colour, position) must scrupulously respect those agreed with the franchisor.
The franchisor's goal is to transfer to the new image all the communication, advertising and market potential already acquired by each single associated hotel and at the same time make the most of the image of the hotel chain in a promotional way.
The franchising agreement was considered to be a key element in distinguishing a real estate sale from a business sale. Specifically, the Italian Supreme Court12 has assessed that the sale of a premises dedicated to hotel activity, completed by a franchising agreement with a hotel chain, had to be qualified as a sale of a business, as the building together with the franchising agreement is a set of elements necessary to run a business.
Hotel management agreements
Without a doubt, the 'management contract' is among the preferred formulas for the development of international companies.
In Italy, it is an atypical contract, therefore not governed by the civil code and the contents are, therefore, handed over for negotiation between the parties, generally a 'management company' and an owner of a property for hotel use.
It is via the atypical contract that a hotel chain assumes, on the basis of a consideration of economic nature, the obligation to manage a hotel, in the name of, on behalf and at the risk, of the owner, normally using the know-how and its own distinctive signs, but sticking to the instructions of the hotel owner. Under the management contract, the companies agree to manage a hotel asset 'in the name and on behalf' of the real estate property.
The term 'in the name and on behalf' makes the management contract similar to the 'mandate with representation' governed by the Italian legal system even if some substantial differences remain.13
Based on this particular contractual form, the hotel does not change ownership. It is only managed, under an international brand and with know-how by a well-known brand, that is capable of marketing the structure in international channels, benefiting from economies of scale and sophisticated managerial techniques.
The management company is 'paid' with a percentage on the turnover produced (generally between 2 and 7 per cent) and a percentage (between 3 and 7 per cent) on the profit deriving from typical management, in the international practice called gross operating profit.
Often, the real estate owner is also required to make investments with regard to the structural part that must perfectly correspond to current legislation, and above all to the standards required by the international company and the brand through which the hotel is managed.
According to precise structural characteristics as well as market analyses, the hotel is assigned a 'brand'.
These contracts generally have a long-term time horizon; 10, 15 or 20 years. The operational and day-to-day management is delegated to the company but the return and approval of certain costs to be incurred are presented to the property and must always be authorised.
All staff are hired by the property of the hotel but the selection and training are delegated to the company. Generally, a figure is jointly appointed as financial manager who must supervise 'the accounts' according to which the economic relationships between the two subjects are regulated.
The rare doctrinal points in contract management agree that the merit of protection in our legal system of this atypical contract is beneficial, if, according to its typical social configuration, it does not create a dissociation between the management and business risk. It removes autonomy and freedom of initiative in the economic status of the hotel company owner. Despite its, sometimes even radical, subjection to the management agency choice, it is encouraged where managerial skills are lacking.
An interesting case has been decided by the Italian Supreme Court14 in connection with a labour claim, having an impact also in the consideration of the management agreement. In particular, the Court rejected the application proposed by the employee against Savoia Excelsior s.p.a., for annulment or nullity of the dismissal ordered by letter delivered on 31 March 2011. They declared the claims for compensation inadmissible. The judge considered the retaliatory or discriminatory nature of the dismissal unproven. The dismissal was objectively justified owing to the transfer of the defendant company from a management contract with the company Le Meridien – Starwood to a franchising, of the consequent need to eliminate the connection with this company and to acquire a managerial figure. The withdrawal communicated to the worker on her return to service was considered as effective, the claims for compensation were declared inadmissible.
The Court has emphasised the difference between a management agreement and franchising agreement. There is particular reference to the greater independence left to the franchisee in the selection of employees occupied in the structure, while under the management agreement, the operator has to hire the person selected by the international chain.
The typical financing structure for hotels in Italy is mortgage loans, together with financial leasing.
The mortgage loans are based on a bank loan that is granted by a mortgage over the asset.
The minimal duration is of 10 years, but it can last up to 30 years.
Usually aside from the mortgage over the asset, there is an assignment of the rents deriving from the operation, in case the operator and the owner are not the same subject.
In the event of default, the bank has to start a legal procedure to sell the asset, as the bank cannot directly access the ownership of the asset.
The loan, as well as the financial leasing, can also be granted for hotels still to be built; in this case the loan will be granted in instalments corresponding to the construction phases.
Financial leasing is a form of leasing where a financial company buys the asset and leases it back to the beneficiary. The beneficiary will pay the purchase price in instalments, up to a final large instalment usually equal to 10 to 20 per cent of the full price and will become the owner of the hotel only with the payment of the last instalments. In the case of default, the hotel already has ownership of the financial company, which will act only for the recovery of costs and damages. In this case, the financed party immediately loses every right over the hotel.
Employment relationships in the hotel sector are regulated by a national collective agreement applicable to the hotel sector (the CCNL).
The national standardised employment contract dedicated to the tourist accommodation sector regulates the professional relationships of employees who carry out their activities in public companies, collective catering companies, commercial catering companies, beach resorts, day hotels and alpine huts.
The last text of the CCNL on tourism currently applicable was approved on 8 February 2018, taking effect from 1 January 2018.
The CCNL sets forth the minimum monthly wage for each category of works, including increases based on the duration of the relationship. The minimum termination notes, again based on the length of the relationship, the holiday terms and social benefits.
In general terms, high school institutes for the education of cooks and waiters are becoming very popular in Italy and the request of qualified employees has been constantly increasing over the past 15 years.
Because of the tourist season, the national standard employment contract (in the tourism sector) specifically sets forth a section for seasonal workers. For the collective tourism agreement, seasonal companies are those that observe one or more periods of closure to the public during the year. Companies operating in seasonal conditions are allowed to hire temporary workers for the duration of the season. A seasonal worker is, therefore, defined as a person who carries out the work activity in a non-continuous way, but only in certain periods of the year. A seasonal worker is entitled to remuneration treatments and to the period of vacation due to permanent workers in proportion to the duration of the contract and according to the provisions of the CCNL.
The seasonal employer has the right of precedence in rehiring at the same entity and with the same qualification. The right of precedence, however, expires within one year of the date of termination of the relationship and the worker can exercise it on condition that he or she shows his or her will in this sense to the employer by written communication within six months of the date of termination of the relationship. Any waiver must be communicated in writing in good time to allow the company to provide for the consequent needs, and in any case not later than 30 days after the aforementioned communication, unless an impediment is proved.
The workers in the tourist sector have the same rights of every worker regulated by a national contract. This means that their economic treatment cannot be lower than those under the national contract, and the contract can only be terminated without reason during the initial trial period, that cannot be longer than six months.
After this period, the employment contract can be terminated only if there are grounds to do so. In the case of a dispute, only the court is competent in deciding if there were grounds for termination, and in the absence of this, the employee is entitled to compensation that is proportional to the previous duration of the employment contract.
Each worker is entitled to holidays that accrue on the basis of the days worked during the year.
As regards the possible different needs of the employer, which might be strongly linked to the season, the national contract sets forth that the distribution of the weekly hours can vary from week to week: the maximum per week may be of 48 hours, which may be compensated for in the low season period with a minimum set of 20 working hours per week.
Dispute resolution and management
As far as dispute resolutions are concerned, there are some specific contracts that have to be discussed in any case before a specific local court. Leasing agreements (or going concern contracts) have to be discussed before the court of the town where the building or the going concerned is located. Labour disputes have to be discussed before the court where the working relationship has been created. Loan financing agreements granted by a mortgage have to be discussed before the court where the granted building is located.
Residual contracts, such as franchising agreements or management agreements, may be discussed either before a court or via an out-of-court procedure, such as an arbitration.
All disputes concerning an administrative licence or permit must be discussed before a regional administrative law that is based in the same region of the public administration issuing or denying the licence or permit.
The hotel and tourist sector in Italy is a strong part of the national economy with a very heavy presence of hotels, the vast majority of which are still owned by private families. The investment trend in recent years has been of constant growth in transactions, especially in high-level hotels, with a stop in 2020 during to covid-19, however, investments in Italian hospitality should triple over the next three years and reach €3 billion in 2023.15
The most used contracts are traditional ones, such as leasing agreements and purchasing agreements granted by mortgage loans. Franchising agreements as well as management agreements, are still a minority applied by international chains.
Data protection and web marketing are becoming more and more important and regulated by very strict rules, especially in terms of data protection and data treatment.
Workers are regulated by national collective contracts, which set forth the minimum conditions that must be granted to employees.
All the above trends have obviously been strongly impacted by covid-19.
The tourist sector makes up a large proportion of the Italian economy. The long lockdown, followed by the travel restrictions, especially to and from foreign countries, is dramatically impacting the Italian hotel sector.
To help hotel managers, the Italian government introduced a tax credit equal to 60 per cent of the rent paid by hotel operators in the first months of 2020, which has been extended also in some months of 2021. Besides, the Italian government is trying to help the renovation of hotel assets by introducing a tax credit in the case of real estate renovation.
In 2020, a 'holiday voucher' granted to families on a low income was introduced, but it did not produce the hoped results, as very little accepted by hotel operators.
The summer of 2020 was characterised by local tourism, with very little foreign tourist presence, especially in towns, while 2021 is opening to foreign tourism again.
The sector is claiming damages from the government.
Despite this attitude, large transactions are still ongoing, especially for luxury hotels.
1 Antonella Ceschi is a parnter at Bird & Bird.
2 2019 Annual CBRE Report on Hotels.
3 2021 Annual JLL Report on Hotel.s
4 2019 Annual CBRE Report on Hotels.
5 VIII Federalberghi Report.
6 VIII Federalberghi Report.
7 2021 Annual CBRE Report on Hotel.
8 Destinazione ricettiva.
9 Quaderni – Il Sistema Alberghiero Italiano, Cassa Depositi e Prestiti, 15 September 2018.
10 Judgment T-28/18.
11 Court of Rome, 25/10/2019, No. 20594.
12 Corte di Cassazione, Ordinanza 28 June 2018, No. 17182.
13 In Italy, the theme of management contracts consists of a single and ancient previous case law, referred to the management mandate of steel plants: Court of Cassation, 18 June 1917, Ferro c. Steel company of Savona, in Riv. dir. comm., 1917, II, 676. In doctrine only one monographic contribution is found, in general, by P. Montalenti, The translation of the management powers in groups of companies: management contracts, in Ce I, 1987, 436 ss .; id., Item Management contract, in Dig. en. Sec. comm., IV, 1989, 91 sqq., which epitomes the previous essay. This study is referred to management contracts infra-group by A. Aloe, Contracts in groups of companies: management contracts and protection of weak contractors, in New contracts, edited by E. Napolillo, Piacenza, 2002, 137 ss.
14 Cassazione civile sez. lav., 16/07/2015, (ud. 19/02/2015, dep. 16/07/2015), No. 14928.
15 2021 Interview to Mauro Breglia, President of Scenari Immobiliari.