Who Runs the Hotel After You Buy
Most international buyers of Italian hotels do not intend to run them personally, and the question of who will is one that should be answered before the purchase rather than after. The operating model you choose determines your income profile, your risk, your involvement, and — not least — whether you need the right to work in Italy.
By the team at KW Hospitality · Updated
Direct operation
You own the property and run the business, employing the staff and holding the licences.
Gives full control and the whole of the operating result. Demands genuine operational capability, presence, and the ability to manage an Italian workforce under the applicable national collective agreement, with Italian employment and health-and-safety obligations. Requires, for a non-EU owner intending to be personally involved, an immigration status that permits it.
It suits buyers with hotel operating experience. It suits buyers without it considerably less often than they expect.
Business lease (affitto d'azienda)
The Italian arrangement most often chosen by owners who do not wish to operate. You lease the business as a going concern to an operator, who runs it at their own risk and pays you a rent.
Gives a contractual income with no operating exposure, and removes the employment relationship from you. Demands care in selecting the tenant and in drafting the agreement — the operator's covenant strength, the maintenance obligations, the condition in which the business must be returned, and what happens on default. Carries the risk that a weak operator degrades the asset and its reputation while paying rent, which is harder to remedy than non-payment.
This is the most common structure among international owners of Italian hotels, and the one we are asked about most.
Management contract
An operator runs the hotel on your behalf for a fee. The business remains yours: you hold the licences, employ the staff, and take the operating result.
Gives professional operation with the upside retained. Demands that you carry the operating risk and remain the employer, with the oversight capability that implies. Requires attention to the fee structure, the performance terms, the budget approval process and the termination provisions — a management contract that cannot be terminated on underperformance is not really a management contract.
Brand affiliation and franchise
The hotel trades under an international brand, gaining distribution, loyalty programme access and recognition, in exchange for fees and compliance with brand standards.
Gives access to demand you would otherwise have to generate yourself. Demands capital: brand standards frequently require works, and the required investment should be established before signing, not discovered in the first inspection. Carries long commitment periods and territorial provisions that need to be understood.
Affiliation can be combined with either a management contract or direct operation, and the two decisions are separate.
Comparing them
| Direct | Business lease | Management contract | |
|---|---|---|---|
| Your income | Full operating result | Contractual rent | Operating result less fees |
| Operating risk | Yours | The tenant's | Yours |
| Who employs staff | You | The tenant | You |
| Your involvement | Continuous | Minimal | Oversight |
| Main risk | You cannot operate it well | Tenant degrades the asset | Weak contract terms |
Decide before you buy, not after
The operating model affects which properties suit you in the first place. A hotel that only works under direct, hands-on management is a poor purchase for an absent owner, however good the building. A property with an existing lease to a competent operator is a different investment from an identical property that is closed and needs to be relaunched.
It is worth settling your intended model before viewing, because it changes the brief — and it changes what we should be showing you. Tell us what you have in mind and we will work to it.
Talk to us about an acquisition in Italy
Write to us with what you are considering. We reply in English, and we will tell you honestly when we think Italy — or a particular market — does not fit the brief.
Contact our teamConfidential portfolioFrequently asked questions
Do I have to run the hotel myself?
No. Most international owners do not. The common alternatives are leasing the business to an operator, appointing a manager under a management contract, or a combination of a management contract with brand affiliation.
What is affitto d'azienda?
A lease of the business as a going concern. An operator runs the hotel at their own risk and pays you a rent; the employment relationships sit with them rather than with you. It is the structure most commonly used by owners who do not wish to operate, and the terms of the agreement matter more than the headline rent.
What is the difference between a lease and a management contract?
Under a lease the operator takes the operating risk and pays you rent. Under a management contract you keep the operating risk and the operating result, and pay the manager a fee. The first gives predictability, the second gives upside, and they suit different owners.
Can I appoint an international brand?
Yes, subject to the brand's own criteria for the property and the market. Affiliation brings distribution and recognition, and normally brings required capital expenditure to meet brand standards. That investment should be quantified before signing.
Do you help find an operator?
Yes. We work with operators across Italy and we advise owners on which model suits a specific property and on the terms of the agreement. Where a property already has a lease in place, we assess the tenant and the contract as part of the acquisition.