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Expo 2015: the seesaw of prices

Di Antonio Caneva, 26 Marzo 2015

It took a miracle to set tourism right, and it did happen: the Holy Father announced the Jubilee, starting on 8 December 2015 (almost exactly when Expo ends) until 20 November 2016. This means that, for a total of 17 months, Italy will enjoy extraordinary events, estimated to total 45 million participants.
This is a particularly favourable conjunction for the industry, combined with some legislative changes, such as the Jobs Act and a reduction in the Regional Production Tax.
Not everything, however, is going the way it should. Some operators who had options on significant numbers of rooms on an “empty for full” basis, for example, have chosen to withdraw from them, though incurring in sometimes heavy penalties.
Is the expectation of 20 million visitors overstated? Maybe. The 8 to 9 million sold tickets the Expo organisation is boasting, with a backing choir of politicians, have not in fact all reached their end users, as they have been bought by large dealers (for example Banca Intesa or the Uvet Group) which, in turn, still have to place a portion of them. So we had better be cautious!
Bizarre things happen in the Expo world. Corriere della Sera recently published a survey among hospitality operators, aiming at understanding the developments of the Expo project: the resulting picture was exhilarating. A disappointed hotel owner complained that prices will not increase by as much as 50% as initially envisaged, while another said that the increase will be “only” by 20-25% compared with the full price! Do we realise that an increase of this size, combined with a growth in room occupancy, means – at least – doubling the annual profit? I may be wrong, but is seems to me that expectations are flying too high. Expo 2015 cannot be a panacea for all evils: in a country that tends to deindustrialise (recently Pirelli), we should rather think of how to improve the system, and not only of filling the till. Expo can be a good opportunity to restart, to improve the facilities, to invest in human resources, to profit from the media exposure; recent history teaches us that countries that benefited from large-scale events and only thought in terms of revenues were strongly penalised in the following years. We should reflect on this.

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