Italian Vacation Rental Prices Falling

Italian Vacation Rentals announces that for the first time in two decades, prices of Italian vacation rental properties are beginning to level off or decline. In a market that is accustomed to large seasonal increases, this is good news for cost-conscious travelers but not such good new for those looking to make rental yeilds pay for their investment.

Through the past two decades, the selection of fine quality vacation rentals has grown due to the availability of suitable villas and farmhouses throughout the country. But because of the even greater demand through online rental companies, the prices have risen quickly throughout the 1990s and the early part of this decade.

There are signs that this trend is now beginning to change. It may be too soon to declare that the inventory has outgrown the demand, but this choice selection of comfortable accommodations is becoming a bit more of a buyer’s market instead of the other way around.

“There is no question that Americans are now returning to all parts of Europe following the hard times of the past few years,” said Jim Broyles, Vice President of Gira! Italian Vacation Rentals.

“Italy is popular for a multitude of reasons, and we are delighted to see so many Americans planning trips there for anything from honeymoons to family reunions. There are more multi-week trips being planned, and they are booking accommodations in a broad range of prices,” he continued.

However, this alone is not sufficient to affect the prices of villas because there are other trends apart from this that are leaving some vacation properties with significant vacancy rates through the busy seasons.

The most important of these trends has to do with the European economy itself, which has stalled in recent years. French and German summer travelers have traditionally made up a huge segment of Italy’s tourist market, and this client base has shrunk significantly in the past two years.

Because of this softening of demand, most villa owners and rental management companies have announced very moderate price increases for 2005, with some properties actually posting lower weekly rental prices. In Tuscany, where 10-20% year-to-year increases were very common, the average price change for 2005 is about 6%.

“Of course in the very popular areas such as the Cinque Terre, which is still being discovered by so many travelers, prices are moving higher a bit more quickly,” said Broyles. “Some luxury properties in other areas are in short supply and have moved up as well. But the good news is that cost-conscious travelers now have some very good opportunities in the middle price range, especially if they are willing to visit some regions off the beaten track. Umbria remains the best kept secret in Italy, and our Umbria Specialties Catalog is priced about where it was in 2004.”


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