The tourists are leaving Italy. Now catastrophe looms

Rome (CNN) — For all too brief a time, the Italian summer offered a glimmer of hope. After emerging from what was in early 2020, one of the world's harshest coronavirus lockdowns, the country managed to dust itself down in time to welcome visitors.

But as the sun begins to cool, so do hopes of a full recovery for Italy's decimated 2020 tourism season. Winter is coming, and with it what is expected to be a full-blown economic catastrophe.

The Italian government, like many across the world, has been doling out cash to help support many ailing businesses and individuals, but with many global travel restrictions still in place, lost revenues from the country's faltering tourism industry leaves a gaping financial hole that must now be filled.

"Tourists are what we need to keep going," says Cassandra Santoro CEO and founder of travel planning service, Travel Italian Style. "Our guides, drivers and workers from Piedmont to Sicily who thought they would be out of work for a season, are now exploring other jobs and income sources."

Anyone visiting Italy in August could've been forgiven for thinking almost everything was back to normal, bar the facemasks and social distancing. Culturally set in stone as a holiday month for Italians, it saw many locals enjoying a hard-earned break as best they could.

But even with 60% of Italians managing a break -- almost all of them in Italy -- and the influx of some northern European visitors, the forecast is abysmal.

"The projected 2020 loss from overseas visitors to Italy is €24.6 billion and even domestic traveler spending is down €43.6 billion," says Giorgio Palmucci, president of the Italian national tourist board, ENIT.

Even with hopes of growth and recovery two years down the line, the pain, he adds, is likely to be widespread.

"All Italian cities are expected to be significantly impacted, particularly those more dependent on international visitors like Venice, Florence and Rome."

An industry on the brink

Adding to the problems is a rise in Covid-19 cases blamed on the movement of young Italians, both over the borders into countries like Croatia, Greece and Malta and to summer nightlife hotspots at home. Daily increases are lower than France and Spain, but Italians are nervous about the approaching winter.

Fears of a second wave appear to have dashed earlier projections of a September and October tourism revival, with Italians and overseas visitors canceling plans and sitting tight.

Business owners now feel that government talk of the Italian summer as a domestic boost to tourism was just rhetoric. Unbridled optimism coupled with images of packed Italian beaches for the popular August 15 ferragosto holiday were, they say, just a smokescreen for an industry on the verge of collapse.

The statistics certainly paint an uglier picture. The Italian Confederation of Business has reported that 70% of hotels in cities like Rome and Florence and 20% in coastal areas never even reopened after the lockdown. The Italian National Institute of Statistics projects that 60% of businesses in the industry fear imminent collapse.

The ongoing travel ban that prevents Americans -- Italy's biggest source of tourism -- from entering is also having a particularly brutal impact.

Strength and courage

Cassandra Santoro of Travel Italian Style says at least 85% of her clients are American. As of September her company has registered 100% of holiday cancellations for 2020. She says it's the first year she has seen zero profits from Italy vacation planning.

"In December 2019, I had more than 100 clients booked to travel between March -- September of 2020. I have refunded about 50% of the guests in full, and 50% have postponed to 2021, some even to 2023 and 2024."

Like so many, she has had to reinvent her business. Together with locals on the Amalfi Coast where she is currently based, Santoro launched a digital story series #LifeBeyondTourism #AmalfiCoastLocals showcasing businesses that usually rely solely on tourism.

She says that during interviews, "We have heard more than once, 'If the borders remain closed for the remainder of 2020, we will not have money to buy food for our family by January.' Yet, the Italians are still optimistic and deep down, they know that this won't last forever. Forza and coraggio (strength and courage) are what Italy knows best."

Food tour company Casa Mia usually schedules bespoke food and wine activities across Italy non-stop from March to October. Not this year. Cancellations from US clients started coming through in February, an early sign of the catastrophic summer season.

"We lost 100% of our 2020 bookings in a matter of days," says co-owner Eleonora Baldwin. "Over summer there has been a moderate influx of European travelers, but a recent uptick in cases could potentially trigger another lockdown, so the coming months are one big question mark."

Hotels are facing the same uncertainty.

Operations director for luxury chain Rocco Forte Hotels Maurizio Saccani says Rome was deserted through July and August and occupancy at the famed Hotel de Russie hovered at around 15%, compared to 87% for the same period last year. The June unveiling of its new Hotel Villa Igiea in Palermo (a multi-million euro restoration project) has been moved to May 2021.

Too little too late

Giorgia Tozzi, general manager of Rome's five-star Hotel Vilon, says 2020 was to be the property's third and most promising year of business. With record high bookings for April onwards, they were gearing up for their best summer to date.

Instead, by mid-February cancellations started coming through, forcing the hotel to close. Things picked up slowly after they ambitiously reopened on June 3, initially with Italian business travelers and then from mid-June through to September, travelers from France, Spain and Northern Europe.

"This helped us achieve occupancy of around 37%, compared to over 80% for the same period last year -- disappointing but given the current climate, a miracle. The next few months are uncertain but we hope to see some improvement from Spring 2021."

Tozzi remains positive.

"Rome as they say is the Eternal City and will survive. Perhaps her resilience and beauty will give us the strength to start again and find a new tourism normal."

But while there's much talk of billions of EU stimulus and domestic initiatives, many business owners say it's a case of too little too late.

Natalino Gisonna, the owner of Rome's Corso 281 Luxury Suites, has been vocal in calling for further support from the Italian Government.

"Covid-19 has been an economic disaster for our hotel," he says. "Between June and September, we welcomed just six guests, mainly from France and the UK. For the same period last year, we were at 95% occupancy. I don't believe there will be any improvement until spring 2021 and that's only if international borders reopen."

Gisonna says that government measures to support the tourism sector to date, including a so-called "holiday bonus," have been ineffective because they have failed to provide desperately needed funds to businesses.

"Of the €2.4 billion allocated economy stimulus, to date only 200 million has been spent and only 8% has reached hotels and beach clubs. Unallocated resources should directly go to those businesses in need, in the form of tax relief and grants or many won't survive."

It's not just city hotels suffering. On islands like Ischia and Capri, mass tourism is seasonal and businesses here work hard to ensure summer earnings sustain them for the year.

Together with husband Gianluca D'esposito, Holly Star owns Ristorante Michel'angelo and a popular cooking school on Capri, an island that usually welcomes over two million travelers annually. "To say this summer has been a challenge is an understatement, especially for small family-run businesses like ours," she says.

With a vacation season reduced seven months to just two and a half and 80% of their international clientele absent, Star has had to rethink her operation.

"Our cooking school remains closed and we have transformed our business to offer international shipping of our food product line and can only hope the current situation improves for our new garden venture launching next year."

Sustainable tourism

Michael Sambaldi, managing director of Ischia's Mezzatorre Hotel and Spa, says island revenues dropped by up to 50% this summer, but his property was able to capitalize on the Italian tourist market this summer, with locals increasingly appreciating the beauty within their homeland.

He believes the situation has forced businesses to become savvier in terms of financial and even marketing resources, which is the reason the hotel is participating in a new global campaign, Ischia is More.

Created by a consortium of passionate local entrepreneurs, it aims to position the island as a dynamic year-round destination initially through showcasing its history, culture and beauty via a dedicated Instagram channel. It will eventually encompass a reboot of the spa sector and sustainable tourism projects.

Luxury Regina Isabella is another founding member of the Ischia initiative. CEO Giancarlo Carriero says that while the island's 2020 season was predominantly for Italians, he is hopeful international tourism will recover by 2022. He says the pandemic has changed people and that meaningful and wellness travel will become the priority for many. Ischia, with its healing thermal waters and striking natural landscapes, can provide that and more.

And so while the current outlook doesn't bode well, these businesses on Ischia -- together with many others across the country -- are determined to keep up the fight. Perhaps their example is the beacon Italy needs for what will be a long and painful road out.

Maria Pasquale is an Italian-Australian food and travel writer based in Rome. Author of I Heart Rome and founder of the award-winning blog HeartRome, her adventures can be followed on Instagram @heartrome.