Montecatini Terme hotel crisis: asset values, tourism and investment

A territorial, tourism-demand and hotel asset value analysis

By Roberto Necci — Hotel M&A, restructuring and management advisory

Executive summary

Montecatini Terme is one of the most revealing case studies in the Italian hotel market.

It combines three conditions that, at first sight, appear difficult to reconcile: substantial tourism volumes, an unusually large hotel stock relative to the size of the town, and a significant concentration of closed properties, hotels for sale and assets involved in distressed situations or judicial proceedings.

There is no contradiction.

This is what happens when a destination progressively loses the product that originally generated its demand, yet manages to preserve visitor volumes because of its location, accommodation capacity and price competitiveness.

Montecatini has gradually moved away from the traditional long-stay thermal model and towards a different form of demand: short stays, international leisure traffic, organised groups and guests using the town as a cost-efficient base from which to explore Tuscany.

The consequences are structural.

The destination may still generate substantial room nights, while hotel profitability deteriorates.

The market is increasingly characterised by:

shorter average stays;
greater dependence on intermediated demand;
stronger rate pressure;
higher operating cost per stay;
limited ability to fund refurbishment and regulatory capex from operating cash flow;
a growing disconnect between hotel operating performance and real-estate capital requirements;
accelerated asset value erosion once financial distress turns into an unmanaged procedure.

In 2024 Montecatini recorded 612,937 arrivals and 1,564,108 overnight stays, with an average length of stay of approximately 2.5 nights.

In 2025, overnight stays declined by around 70,000, a reduction of approximately 4.5%.

At the same time, dozens of hotels have closed over recent years, while a significant number of hospitality assets have been offered for sale through insolvency proceedings, auctions and private negotiations.

The restructuring of the Terme di Montecatini estate may alter this balance over the coming years.

But for hotel owners, the most important issue is more immediate:

The greatest risk in Montecatini today is not necessarily owning an asset with limited current value. It is allowing time, creditors and procedure to determine that value on your behalf.

The mechanism is not theoretical.

I previously examined the case of Chianciano Terme, where a hotel asset moved from a valuation of €996,000 to a sale price of €89,000 in only twenty-one months.

The full case study is available here:

From €996,000 to €89,000 in 21 months: the Chianciano Terme case and the methodological error that destroys hotel asset value

Montecatini and Chianciano are different markets.

But the financial mechanism capable of destroying hotel value is exactly the same.

1. From thermal destination to accommodation hub for Tuscany

Montecatini Terme is a town of roughly 20,000 inhabitants located at the centre of one of Europe’s strongest tourism regions.

Florence, Lucca, Pisa and Pistoia are all within easy reach.

Since 2021, Montecatini has also been part of the UNESCO World Heritage site The Great Spa Towns of Europe, confirming the international significance of its thermal heritage, urban fabric and architectural identity.

This combination of accessibility, hotel capacity, historical assets and lower accommodation costs than many of Tuscany’s major art cities has allowed Montecatini to continue generating significant visitor volumes even after the decline of traditional thermal tourism.

But the economic function of the destination has changed.

Historically, travellers stayed in Montecatini because Montecatini itself was the product.

The thermal waters, treatments, spa establishments and long curative stays created demand measured not in two or three nights, but often in ten, twelve or fourteen nights.

Repeat business was strong.

Acquisition costs were comparatively low.

Ancillary spend was high.

Today, a substantial share of demand chooses Montecatini for another reason: it is a practical and competitively priced base from which to visit other parts of Tuscany.

The town has therefore moved, at least in part, from being a destination in its own right to becoming an accommodation platform serving a wider regional itinerary.

That distinction is not semantic.

It changes the economics of the hotel business.

Dimension	Historic thermal model	Current prevailing model
Average stay	10–14 nights	approximately 2.5 nights
Main reason for travel	thermal product	location, itinerary and price
Guest loyalty	high	lower
Intermediation	limited	significant
Ancillary revenue	material	more limited
Guest turnover	low	high
Rate pressure	relatively contained	high

The most important figure is the reduction in length of stay.

A guest staying twelve nights creates twelve occupied room nights with one arrival and one departure.

With an average stay of 2.5 nights, almost five separate guest cycles are required to generate the same number of room nights.

That means more:

housekeeping;
check-ins and check-outs;
linen changes;
booking administration;
distribution costs;
commissions;
front-office workload.

The same number of occupied nights can therefore produce a very different operating margin.

This is one of the reasons why analysing Montecatini purely through tourism volumes leads to an incomplete conclusion.

The issue is not simply how many guests arrive.

It is how much profit remains after acquiring and servicing them.

2. Demand remains significant, but average stay keeps falling

Recent data clearly illustrate the transformation.

Year	Arrivals	Overnight stays	Average stay
2022	n.a.	approx. 1.182m	n.a.
2023	588,453	1,545,035	approx. 2.6 nights
2024	612,937	1,564,108	approx. 2.5 nights
2025	n.a.	approx. 1.493m	lower again

Between 2023 and 2024, arrivals increased by approximately 4.2%, while overnight stays grew by only around 1.2%.

More visitors arrived, but they stayed for less time.

This is the statistical signature of a market in which the number of customers continues to grow faster than the amount of value generated from each customer.

In 2025, momentum weakened further, with approximately 70,000 fewer overnight stays than in 2024.

International demand is both a strength and a dependency

Foreign guests now account for the majority of overnight stays.

In 2023, international visitors generated more than 1.08 million overnight stays, compared with approximately 458,000 from the domestic market.

In 2024, international overnight stays increased further, while domestic demand declined.

This confirms Montecatini’s ability to attract overseas demand.

But it also exposes the destination to the commercial logic of the international distribution chain.

Where a large share of business is sourced through tour operators, wholesalers, organised groups and online intermediaries, pricing power gradually shifts away from the hotel and towards whoever controls demand.

That does not necessarily reduce occupancy.

It reduces pricing flexibility and margin.

And this distinction is critical.

A hotel may appear busy while generating insufficient operating cash flow to support its capital structure.

3. The real issue: how much does a room produce compared with the capital required to maintain it?

To understand Montecatini’s hotel asset problem, tourism volumes must be translated into hotel economics.

The following model is not intended as a market-wide valuation.

It is an illustrative scenario based on explicit assumptions, designed to show the scale of the issue.

Working assumptions

total overnight stays: approximately 1.493 million;
assumed hotel share of overnight stays: 90%;
hotel overnight stays: approximately 1.344 million;
average room occupancy: 1.8 guests;
room nights sold: approximately 747,000;
assumed active room stock: 5,500 rooms;
average annual opening period: 250 days.

Indicative output

Metric	Indicative value
Available room nights	approx. 1.375m
Occupancy during opening period	approx. 54%
Assumed ADR	€75–€90
Implied RevPAR	approx. €40–€49
Annual room revenue per available room	approx. €10,000–€12,200

A 40-room hotel performing broadly in line with these assumptions would therefore generate approximately €400,000–€490,000 in annual room revenue, before food and beverage or other ancillary income.

Now compare that with the capital required to keep an ageing hotel asset competitive.

Fire safety compliance.

Mechanical and electrical systems.

Energy efficiency.

Windows.

Bathrooms.

Guest rooms.

Lifts.

Accessibility.

Public areas.

Digital infrastructure.

A dated hotel may require several hundred thousand euros in investment.

In more complex situations, capex can easily exceed €1 million.

This produces the central equation behind the Montecatini problem:

The hotel may still generate revenue, but its operating cash flow may no longer be sufficient to finance the capital required to preserve its future competitiveness.

That is the point at which hotel operations and real-estate value intersect.

And no investment, acquisition or disposal decision should be made before this relationship has been analysed.

At Investhotel.it, I focus specifically on the relationship between operating performance, capex, hotel valuation and investment sustainability.

4. When inactive hotel stock becomes a market-wide problem

The failure of one hotel is a corporate issue.

The closure of dozens of hotels in the same destination becomes a market issue.

Over recent years, Montecatini has seen a substantial number of hotels close.

A large number of hospitality properties have also been marketed through insolvency procedures, auctions and private transactions.

In a town of approximately 20,000 inhabitants, this is not a marginal phenomenon.

It becomes part of the urban landscape.

And it affects even the hotels that continue to trade successfully.

An abandoned or distressed hotel can:

damage the perception of the surrounding area;
create safety and maintenance issues;
weaken investor sentiment;
put downward pressure on nearby asset values;
increase the number of alternative acquisition opportunities available to buyers.

If dozens of hotels are simultaneously competing for the attention of investors, buyers gain considerable negotiating leverage.

That means the value of an individual hotel no longer depends only on its own profit and loss account.

It also depends on the alternatives available to capital.

The key question for an owner therefore becomes:

Why should an investor acquire this hotel rather than one of the other assets available in the same market?

A professional sale process should be built around answering that question.

5. The Terme di Montecatini issue: exceptional heritage, complex investment proposition

The future of the thermal estate is the most important strategic variable for Montecatini as a destination.

For decades, the spa product generated the town’s distinctive demand.

As that product weakened, the hotel market lost one of its principal autonomous demand generators.

The financial difficulties affecting the thermal company therefore matter far beyond the fate of individual buildings.

They affect the destination’s ability to redefine its entire tourism proposition.

A simplified timeline

Period	Development
2022	escalation of the financial crisis and access to restructuring procedures
July 2023	court approval of the preventive restructuring arrangement
2024	disposal processes launched
2024–2025	two attempts to sell parts of the estate without successful bids
2025–2026	progressive restructuring and subdivision of the disposal perimeter
2026	continuation of disposals and authorisation processes affecting protected properties

The most instructive element is not simply that auctions failed.

It is why highly valuable heritage assets can be difficult to acquire.

A building may have enormous historical, architectural or symbolic value and still be a problematic investment proposition.

Professional investors evaluate more than the property itself.

They assess:

heritage constraints;
planning permissions;
permitted uses;
capex exposure;
development timing;
operating licences;
regulatory complexity;
business-plan viability;
exit liquidity.

Where these variables are not sufficiently defined, the issue may not be price.

The issue is unquantifiable risk.

And institutional capital often reacts to unquantifiable risk by declining to bid at all.

This principle applies just as much to a 30-room privately owned hotel as it does to a major thermal estate.

An investor does not buy only a building.

The investor acquires a package of risks and opportunities.

The clearer that package is, the more investable the asset becomes.

6. The Chianciano lesson: asset values do not collapse only because markets deteriorate

The Chianciano Terme case is particularly instructive.

A hotel asset moved from a valuation of €996,000 to a sale price of €89,000 in twenty-one months.

A loss of more than 90% of reference value.

But the percentage alone is not the main point.

The central issue is that no corresponding deterioration in the hotel market occurred during those twenty-one months that could plausibly explain such a collapse.

The principal driver was the procedure itself.

Successive failed attempts.

Successive price reductions.

Progressive erosion of the negotiating position.

The full analysis is available here:

From €996,000 to €89,000 in 21 months: the Chianciano Terme case and the methodological error that destroys hotel asset value

The lesson is directly relevant to Montecatini:

A hotel asset can lose value far faster than its operating fundamentals deteriorate.

This happens when the sequence becomes:

financial pressure → no restructuring strategy → formal procedure → failed auction → price reduction → new auction → further reduction.

At that point, the price is no longer determined primarily by hotel economics.

It is determined by the timetable of the procedure.

7. The depreciation clock

Time is not neutral in a distressed hotel situation.

Time is capital.

Every month spent without:

an industrial plan;
a restructuring strategy;
creditor negotiations;
an independent valuation;
an investor memorandum;
a credible alternative to liquidation;

reduces the number of options available to the owner.

And it is often the loss of optionality, rather than the first formal price reduction, that destroys value.

When only one route remains, negotiating leverage belongs to the counterparty.

When five credible alternatives still exist, the owner can negotiate.

This is why the optimal intervention point is not when an auction has already been scheduled.

It is much earlier.

Twelve to eighteen months can materially change the outcome.

Once the auction date is fixed, the process may no longer be about creating value.

It may simply be about limiting losses.

8. Three owner profiles, three different strategies

There is no single strategy for Montecatini.

At least three distinct ownership situations can be identified.

Profile A: operating hotel facing unsustainable capex

The hotel is trading.

Revenue exists.

Demand exists.

But the operating margin cannot support the investment required to refurbish and reposition the property.

The most common mistake is delay.

Maintenance is postponed.

Product quality gradually deteriorates.

The gap between the property and better-invested competitors widens.

The problem then becomes self-reinforcing.

The solution must integrate:

capex;
future ADR;
occupancy;
GOP;
debt;
capital structure;
positioning.

In some cases, the appropriate solution may be debt restructuring.

In others, new equity.

In others, a lease, management agreement or joint venture.

The objective is not necessarily to preserve the existing operating model.

The objective is to preserve value.

Profile B: closed hotel or pre-insolvency situation

This is often the point at which the greatest residual value can still be protected.

The hotel is closed or severely underperforming.

Bank exposure is significant.

The debt may already be classified as distressed, or be at risk of becoming so.

But the asset has not yet reached the final stages of formal enforcement.

This is when time is most valuable.

Potential solutions may include:

negotiated restructuring;
restructuring agreements;
turnaround plans;
consensual debt settlements;
pre-procedure disposals;
new equity;
investor-led recapitalisation.

All of these solutions require the same fundamental argument:

The recoverable value through an industrial solution must be demonstrably higher than the expected recovery through liquidation.

That cannot simply be asserted.

It must be supported by numbers.

Profile C: property owner no longer wishing to operate the hotel

This is increasingly common.

The hotel property remains in the hands of a family, investment company or holding vehicle, but the owner no longer wants to operate the business.

The worst mistake is to market the hotel like an ordinary commercial property.

A few photographs.

A price per square metre.

A listing on a portal.

Then wait.

Hotel investors think differently.

They want to know:

how many keys can be created;
what ADR is achievable;
what stabilised occupancy might look like;
how much capex is required;
what GOP is realistic;
which restrictions apply;
which operator could run the property;
what the asset could be worth after repositioning.

A professional investment memorandum should answer these questions before the investor asks them.

That is the difference between listing a property and structuring a hotel M&A transaction.

At InvestimentiAlberghieri.it, I analyse hotel transactions, disposals, investments and market restructuring from precisely this perspective.

9. Five mistakes that continue to destroy hotel value

1. Confusing demand with profitability

A hotel can be full and still destroy value.

If ADR, distribution costs, labour costs and capex requirements do not produce an adequate return on invested capital, occupancy alone means very little.

2. Cutting rates to solve a product problem

If the problem is structural, a lower price will not fix it.

It may accelerate it.

A rate reduction may increase occupancy slightly while compressing GOP further, making future investment even harder to finance.

3. Approaching financial distress without an industrial plan

A lender does not need to be told that a hotel is under pressure.

The lender needs to understand why an alternative to liquidation will generate a superior recovery.

Those are two entirely different propositions.

4. Looking for a buyer before defining the transaction

Real estate.

Operating company.

Business transfer.

Leasehold.

Share deal.

Asset deal.

These structures are not interchangeable.

Tax, financing, valuation and buyer profiles all change.

The perimeter must be defined before approaching the market.

5. Waiting for the market to improve

This may be the most dangerous error.

Montecatini may indeed benefit from the redevelopment of its thermal product.

But an owner without the financial capacity to survive for another three years cannot build a strategy around the assumption that the market will eventually improve.

The owner must know:

how long the business can wait;
how much capital is required;
what the asset is worth today;
what it could be worth after repositioning;
what value would remain under a liquidation scenario.

Everything else is hope.

And hope is not a capital strategy.

10. Montecatini 2026–2030: three possible scenarios

Scenario 1: successful thermal repositioning

The thermal estate attracts new capital.

Key properties reopen.

A genuine wellness and leisure proposition returns to the market.

Higher-end hotel operators enter.

ADR increases.

Average stay lengthens.

Well-located and high-quality hotel assets are repriced.

In this scenario, owners with strong assets and sufficient capital to wait could benefit materially.

Scenario 2: a two-speed market

This is arguably the most realistic scenario.

Part of the destination is upgraded.

A group of hotels moves upmarket and captures higher-value demand.

Another segment remains heavily exposed to groups and price-sensitive traffic.

A third portion of the hotel stock is converted to alternative uses or leaves the hospitality market altogether.

Montecatini becomes much more selective.

It will no longer be enough simply to own a hotel in the town.

The key will be owning the right asset, in the right location, with the right capital structure and the right product.

Scenario 3: continued decline

The thermal redevelopment progresses slowly or encounters further obstacles.

Demand remains dominated by the town’s function as a low-cost regional base.

Rate pressure persists.

More assets enter distressed procedures.

Under this scenario, value progressively migrates away from the hotel operating business towards pure real-estate and redevelopment potential.

11. Strategy is not about predicting the future

No one can know with certainty which of these scenarios will prevail.

That does not mean owners should wait.

A sound strategy is not designed to predict the future perfectly.

It is designed to create an acceptable outcome across different futures.

If the market recovers, the owner should be positioned to participate in the upside.

If the market remains stable, the hotel must be financially sustainable.

If the market deteriorates, the owner must have the ability to exit before the procedure eliminates the remaining options.

That is risk management.

It is also the principle behind the advisory work carried out through HotelManagementGroup.it, where hotel management, restructuring, investment analysis and operating strategy are considered as interconnected disciplines.

Commercial repositioning and demand generation are addressed through HotelMarketingLab.it, because no hotel turnaround is complete unless the financial restructuring is matched by the ability to reposition the product and create stronger demand.

12. The advisory approach

After more than thirty years in the hotel industry and over 150 completed transactions, I consider four areas inseparable whenever a hotel asset enters a distressed or transitional phase.

Economic and asset diagnosis

The analysis does not begin with turnover.

It begins with:

occupancy;
ADR;
RevPAR;
GOP;
labour cost;
distribution cost;
capex;
debt;
debt-service capacity.

The first objective is to establish whether the problem is operational, financial, asset-related or a combination of all three.

Financial restructuring

When debt is no longer compatible with the hotel’s ability to generate cash, the issue must be addressed before the financial position deteriorates further.

Negotiations may involve banks, servicers, investors, creditors or new capital providers.

But every effective restructuring process begins with one principle:

The creditor must be able to see that the proposed solution offers a superior expected recovery to liquidation.

Hotel M&A

Selling a hotel does not mean publishing a listing.

It means structuring a transaction.

Valuation.

Transaction perimeter.

Investment memorandum.

Business plan.

Data room.

Buyer selection.

Negotiation.

Closing.

At RobertoNecci.it, I publish analysis and material relating to hotel advisory, operations, investment and restructuring.

Repositioning and hotel management

In some cases, the correct solution is not a sale.

It is a different operating model.

A new positioning.

New management.

A lease.

A management contract.

A new operator.

A commercial repositioning programme.

The objective remains the same:

To restore consistency between the value of the property, its ability to generate earnings and the capital required to keep it competitive.

13. Who this analysis is for

This dossier is relevant to owners and operators in Montecatini Terme, Valdinievole and other Italian thermal destinations facing situations such as:

debt that is no longer sustainable against operating cash flow;
loans already classified, or at risk of being classified, as distressed;
closed hotels;
major regulatory or refurbishment capex;
enforcement or insolvency proceedings;
an acquisition offer whose fairness is unclear;
an intention to sell without a proper hotel valuation;
uncertainty over whether to hold the asset in anticipation of destination recovery;
the need to identify an investor, operator or financial partner.

In all of these situations, the first question should not be:

How much can I get for the hotel?

The first question is:

How much time do I still have before my options begin to disappear?

Because as optionality declines, negotiating value usually declines with it.

The principle to remember

The Montecatini case illustrates something that applies far beyond Montecatini.

A hotel can have:

a strong location;

a recognised destination;

real demand;

valuable real estate;

and still lose a substantial part of its value if financial pressure is addressed too late.

Chianciano demonstrated this in almost textbook fashion.

Montecatini currently contains many of the conditions that make the same mechanism possible.

The decisive variable is therefore not only the market.

It is the ability to act while several solutions are still available.

Hotel value rarely disappears overnight. It is eroded gradually while decisions are postponed. A formal procedure simply makes the accumulated loss visible all at once.

Direct contact

If you own or operate a hotel and are considering a restructuring, disposal, investor entry or an alternative to formal enforcement, you can contact me directly.

r.necci@robertonecci.it

Please include:

location, property type and size, current status — operating, closed or in procedure — and the nature of the issue.

The initial discussion is designed to establish quickly whether a realistic intervention strategy exists.

If I believe a workable solution can be structured, we define the next steps.

If I believe the situation is no longer recoverable, I say so immediately.

Because in a distressed hotel situation, the first objective is not to lose more time.

Roberto Necci

📧 r.necci@robertonecci.it

Further analysis:

InvestimentiAlberghieri.it — hotel transactions, investments, disposals and market analysis
Investhotel.it — hotel investment, valuation and asset sustainability
RobertoNecci.it — professional activity, advisory and publications
HotelManagementGroup.it — hotel management, advisory and integrated hospitality services
HotelMarketingLab.it — hotel commercial strategy, marketing and repositioning

Methodological note

Tourism-flow data are based on municipal and regional statistics reported by local media and industry associations.

Information relating to the Terme di Montecatini estate derives from institutional documentation, public notices, corporate information and press reporting.

References to hotels involved in disposal or insolvency processes are based on publicly available sale notices and market information.

The quantitative model included in this article is illustrative. It is based on stated assumptions and is intended to demonstrate orders of magnitude. It does not represent the actual average performance of individual Montecatini hotels and should not replace a property-specific financial analysis based on proprietary operating data.

The Chianciano example refers to the documented case published on InvestimentiAlberghieri.it: