1. Executive summary
Boyle Town Team wishes to explore the feasibility of repurposing vacant properties, located in Boyle town centre, into tourist accommodation based on the Italian Albergo Diffuso (AD) model. The aim of the Italian model is to repurpose abandoned or vacant buildings in villages or towns as tourist accommodation in order reanimate the town centre, stimulate economic activity and halt the depopulation of those towns.
Tourism is a key economic driver nationally and regionally. Fáilte Ireland research states that every €1 million of tourist expenditure helps to support 27 tourism jobs and that each additional 1,000 overseas tourists support 19 jobs in the industry. Key overseas markets for Irish tourism are GB, North America, Germany and France. The domestic market is also a strong performer, particularly in Roscommon where domestic tourism accounts for approximately 75% of the estimated 180,000 tourists who stay at least one night in the county. Anecdotal evidence suggests that the majority of tourists to Boyle are on daytrips with many visitors overnighting in Carrick on Shannon or Sligo.
Boyle has a number of cultural, natural and heritage tourism assets that appeal to the target segments identified by Fáilte Ireland and Tourism Ireland i.e. the Culturally Curious and the Great Escapers. The town is well served by a road and rail network and it is convenient for Ireland West Airport Knock. Despite this, and reflecting the general trend throughout County Roscommon, the town’s tourism sector is underperforming relative to its potential. Local government tourism policies and strategies have specifically targeted the county’s underperformance, and strategic plans across many stakeholders prioritise tourism growth with a target of +10% per annum to 2021.
Given the town’s tourism assets, its accessibility and Fáilte Ireland’s impending development of a new destination brand for the region, it is not unreasonable to expect that such levels of growth can be achieved. Key to driving that growth will be factors such as the development of additional quality serviced accommodation, collaboration amongst public, private and community operators within the town and a proactive communications strategy that positions Boyle as an appealing tourism destination within the region.
A key gap in Boyle’s tourism infrastructure which hampers its potential for growth is the lack of tourist accommodation. The town currently offers approximately 50 B&B beds and approximately 20 self catering houses, but many are closed for almost half the year. A Fáilte Ireland report states that accommodation can be instrumental in facilitating and maximising tourism spend in an area by converting day trippers into overnight visitors. Tourists who overnight in a destination spend their money both inside and outside their accommodation, which means increased footfall for other local traders and service providers, and an additional chain of economic activity generated beyond the accommodation itself. This document explores the Italian Albergo Diffuso model and examines the model’s potential to address the accommodation deficit in Boyle. The Albergo Diffuso concept is based on an horizontal version of an hotel rather than the traditional vertical version. It sees the transformation of refurbished vacant properties to guest accommodation dispersed
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across a number of different buildings in a town or village. A central reception area provides check-in and check-out services, concierge services and the full range of hospitality services offered by a traditional hotel – albeit in different buildings that should be no more than 200m apart. The originator of the model, Giancarlo Dall’Ara, stipulates that for success to ensue, it must be managed by a professional General Manager (GM) with hotel management training and experience, who oversees all operations exactly as would be the case in a traditional hotel.
The model should be managed by a single management entity which could be a private investor who assumes the full risk and enjoys the rewards for the AD project, or a business entity created by multiple property owners who pool their properties under the AD name to make a number of bedrooms and/or self-catering units available. In both cases, Mr Dall’Ara the originator stresses that the appointment of one GM to manage the business is essential.
In addition to service delivery challenges inherent in the horizontal model, Dall’Ara points to challenges with community-led co-operative type management models “I won’t say it can’t work, but I haven’t seen it work well so far”. Maurizio Droli, Lecturer at the University of Udine and founder of International School Specializing in the Albergo Diffuso (SISAD) also states “The majority of them [ADs] are struggling to compensate higher managerial costs compared to those of conventional (vertical) hotels. Moreover, the existence of, fortunately a small part of them, is depending on public-funding”. A case study of the pioneering AD experience in the Friuli Venezia Giulia region of Italy is profiled in this document.
Notwithstanding the challenges, and drawing on learnings from the Italian model, the consultants outline how the model might be implemented in Boyle. The chapter “An Albergo Diffuso in Boyle – How might it work?” outlines local reaction to the idea, potential sources of capital funding, a description of the various components of the project, assumptions, risk factors, the governance model required to manage it and estimated financial projections.
A conservative estimate to repurpose vacant properties to en-suite guest bedrooms (circa 15sq metres in size) on a par with Fáilte Ireland Welcome Standard/four-star guesthouse standard would cost well in excess of €1,500/sqm. As most of the properties that have expressed an interest in the AD project are situated in Architectural Conservation Areas, it is prudent to assume that costs will be at the higher end of the scale for renovations. Detailed renovation/construction costs are beyond the scope of this pre-development study.
A number of potential sources of capital finance have been identified for both loan finance and grant aid. In the absence of detailed information at this concept stage, it is impossible to definitively state whether potential funders have a preference for applications from individual property owners or applications from a separate entity on behalf of multiple property owners. However, all are positively disposed in principle towards the idea of the project and are happy to review applications on a case by case basis.
As with the Italian model, a management company would need to be established through some form of corporate entity to manage the tourist accommodation experience (reservations, reception, hospitality services, concierge etc.) on behalf of the property
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owners, other hospitality service providers within the town and guests. The underlying assumption is that the corporate entity will be NFP (not for profit) and registered as CHY (Charity Status).
A suggested P&L outlines what is likely to materialise once operations would commence delivering estimated sales. Competitor analysis of Roscommon and other comparable areas as well as competitor analysis for similar standard of accommodation indicate that achieved Average Room Rates would not exceed €70 for this type of offering initially, and that there would be limited scope for rate increases given the high level of seasonality and availability of hotel accommodations in nearby towns and on Airbnb. Therefore, pricing is assumed to range from €65 in year 1 rising to an estimated €95 after year 6 (VAT inclusive) based on a double en-suite room for two people sharing.
Several scenarios were modelled from a baseline of 10 letting units (assumes a unit is a double or twin bedroom) to 40 units, based on the assumption that all accommodation meets the Fáilte Ireland “Approved” status for accommodation letting. Based on high level assumptions and in line with similar type non-centralised accommodation offerings, the consultants estimate that a minimum of 40 units would be required for the management of the operation to breakeven in year 5, with a small operating profit emerging in year 6. In line with the prescribed Italian model, it is recommended that for the Albergo Diffuso model to proceed in Boyle, an experienced General Manager be appointed to run the operation, coordinate sales and marketing activities, liaise with property owners and other relevant service providers and report to the Board of the management organisation. The importance of recruiting a suitable candidate for this role cannot be overstated.
The Albergo Diffuso Model has attracted praise as a unique response to a lack of accommodation in marginalised areas in Italy. The model offers a lifeline to towns and villages that have been abandoned, or are at risk of abandonment. However, the model is not without challenges. Although in theory, the AD model is a simple concept, the practicalities of offering a consistently seamless tourist accommodation experience across a number of providers should not be underestimated. The communal management of properties across multiple owners has demonstrated difficulties in Italy.
If Boyle were to progress with the idea, the town could certainly benefit from first mover advantage to optimise the novelty nature of the AD model. If successful, no doubt other towns and villages in Ireland would attempt to replicate the model and an ongoing challenge for Boyle would be to optimise that first mover advantage and consistently remain ahead of the curve in terms of innovation and service delivery.
The focus of this report is on the development of an AD model for Boyle; whilst the overhead costs of the model indicate a major financial challenge, there is nothing to suggest that individual properties that have been refurbished and re-purposed could not successfully operate as tourist accommodation in their own right. As is noted throughout this document, the tourism industry of today is one in which the customer truly is king, and the customer will be the ultimate determinant of the success or failure of any tourist accommodation.
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2. Introduction, brief and methodology
2.1 Introduction Boyle Town Team wishes to explore the feasibility of repurposing vacant properties in Boyle town centre into tourist accommodation based on the Italian Albergo Diffuso model. The term Albergo Diffuso translates to mean ‘scattered’ or ‘dispersed’ tourist accommodation and the terms Albergo Diffuso and AD are interchangeable throughout this document.
2.2 The brief In September 2017, Boyle Town Team engaged consultants Bane Mullarkey and their associate Weldon Mather to prepare a high-level pre-development study. The consultants were required to explore the following:
1. Feasibility: Identify potential markets and assess viability of the Albergo Diffuso proposal; 2. Scattered Hotel: Outline the concept of the Albergo Diffuso in Italy and what it could look like in a local context; 3. Consult with interested property owners, assess their properties and outline estimates for the refurbishment work required to bring the vacant properties to an appropriate standard for tourist accommodation; 4. Consult with Fáilte Ireland, Roscommon County Council and other relevant stakeholders; 5. Provide a roadmap of next steps required to realise the Albergo Diffuso model in Boyle including potential sources of capital funding, the business model and operational requirements and practicalities.
2.3 Methodology The methodology included desk-based and primary research, visits to potential properties, and financial modelling.
Documents reviewed included local and national policies, statistical reports, online documents on the Albergo Diffuso model and the Manuale dell’Albergo Diffuso a cura di Giancarlo Dall’Ara, (Albergo Diffuso manual written by Giancarlo Dall’Ara).
Primary research comprised:
● Scoping meeting with Boyle Town Team Albergo Diffuso sub-committee ● Site inspections of properties with 10 property owners who have expressed an interest in the project and follow up telephone interviews with the property owners ● Interviews and meetings with Roscommon County Council and with relevant tourism stakeholders in Boyle and the wider region as appropriate ● Interviews with Albergo Diffuso experts in Italy ● Online survey completed by the local community, tourism operators and tourists ● Comparisons with other accommodation models namely Airbnb, self-catering, hotels, B&B’s for the purpose of pricing comparison and competitor analysis ● Research with local cafés and bars
A full list of reports ad consultees is included in the appendices.
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3. Setting the scene – tourism overview
3.1 Tourism in Ireland – overseas and domestic By the end of 2017, Ireland will have welcomed nine million overseas visitors making it a record year and showing growth of +3% over 2016. Total spend will be close to €6 billion.
Behind the positive top-line data are the worrying effects of Brexit, which can be seen in a -7% fall in visitors from Great Britain. This has been compensated for by a +19% increase from North America, a +16.2% increase from Australia and other long-haul markets, and a +3.5% increase from Mainland Europe.
In 2016, the domestic (Irish) tourism market grew by +2% to 9.3 million trips, with revenue of €1.8 billion. Data for 2017 is not yet available but there is anecdotal evidence that the market has performed well, and the outlook is considered to be good.
Tourism spend Tourism is a key economic driver nationally and regionally. Fáilte Ireland research states that every €1 million of tourist expenditure helps to support 27 tourism jobs and that each additional 1,000 overseas tourists support 19 jobs in the industry.
Fáilte Ireland’s Survey of Overseas Travellers (SOT) shows that the average overseas holidaymaker to Ireland spent about €530 per person in 2015. About €160 of this, or 30%, was spent on accommodation, with the remaining €370, or 70%, spent on other items. Food and drink accounted for a spend of €180 per person, with another €190 per person spent on entertainment, sightseeing, transport, shopping and other activities.
Tourists staying in paid tourist accommodation (e.g. hotel, guesthouse, B&B, self-catering, caravan and camping etc) spend more than those staying in unpaid accommodation (e.g. staying with friends or family). SOT data for 2015 shows that overseas tourists in paid accommodation spent nearly 15% more on food and drink, nearly 60% more on entertainment and sightseeing and over 50% more on transport than their counterparts who stayed in unpaid accommodation.
3.2 Tourism in Roscommon Using Fáilte Ireland data, it is estimated that in 2016, Roscommon received circa. 180,000 visitors who stayed at least one night in the county. Of these, almost three quarters are from the Irish or domestic market and one quarter are from overseas markets.
GB Mainland Europe North America Other areas Ireland
Visitors 25,000 10,000 14,000 3,000 128,000*
% of total 14% 6% 8% 2% 70%
Sources: Fáilte Ireland; Overseas tourism by county. Domestic market estimated using Fáilte Ireland data.
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Data to measure the Northern Ireland market to Roscommon is not available, but anecdotal evidence from local tourism businesses indicates that it is a small market for Roscommon.
Data on the number of day visitors to County Roscommon is not available but there is anecdotal evidence that many tourists who visit Roscommon’s visitor attractions stay in Carrick on Shannon or Sligo.
Overseas tourism in Roscommon, 2016 Fáilte Ireland data shows that in 2016 there were 52,000 overseas visitors to Roscommon (stayed at least one night in the county) and they spent €21 million. In 2016, Roscommon was in the bottom five counties for overseas visitors, ahead only of Longford, Laois, Leitrim and Offaly.
Overseas visitors
% Overseas revenue
%
Great Britain 25,000 48% €9m 43%
North America 14,000 27% €7m 33%
Mainland Europe 10,000 19% €3m 14%
Other areas 3,000 6% €2m 10%
Total 52,000 100% €21m 100%
Source: Fáilte Ireland; Overseas tourism by county.
Domestic tourism in Roscommon, 20151 In 2015, there were 160,000 trips by Irish people to counties Roscommon and Longford combined2. The higher base of tourism infrastructure and accommodation in Roscommon over Longford means it is reasonable to assume that circa 80% of this total was to Roscommon and 20% to Longford. This gives a reasonable best estimate of 128,000 domestic trips to county Roscommon in 2015 with a spend of around €22 million.
Note: in calculating this estimate, it is noted that both Roscommon and Longford have a low supply of tourist accommodation; both accommodation that is listed with Fáilte Ireland and accommodation that is not listed with Fáilte Ireland.
Tourism in Boyle There is no published data on the total number of visitors (day trips and overnights) to Boyle. Research with local tourism providers indicates that many of those visiting the area’s tourist attractions stay overnight in Roscommon town, in Carrick on Shannon or in Sligo.
Data gathered from Fáilte Ireland and directly from visitor attractions paints the following picture for attractions in the Boyle area:
1 Latest available data for domestic tourism by county 2 Data is published at county level above a threshold of 150,000 trips for most recent year. Data is amalgamated below this threshold.
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Attraction Visitors in 2016
Lough Key Forest Park 70,000 visitors plus an additional 200,000 non-paying visitors
King House 16,000
Boyle Abbey 8,000
Arigna Mining Experience 30,000
Source: Fáilte Ireland and individual visitor attractions.
3.3 International target markets and target segments Four main markets account for 70% of all overseas visitors to Ireland; Great Britain, North America, Germany and France. Whilst strong growth has been recorded from other European markets, from Australia, and from other developing markets in recent years, it is expected that these four main markets will remain a key source of overseas tourism up to 2025, at least.
To attract high spending tourists who are motivated by Ireland’s tourism offering and to grow Ireland’s tourism economy, Fáilte Ireland and Tourism Ireland have developed a customer segmentation model in the main source markets.
This segmentation model is focused on understanding visitor motivations and needs and then grouping those visitors with similar behaviours and needs together (segmenting) in order to better target visitors through sales and marketing and also to develop the right type of visitor experiences to meet their needs.
Three segments have been prioritised based upon their likelihood to visit, and both the economical and geographical return on investment that they would yield for the economy. Two of the three segments are relevant to Boyle; Culturally Curious and Great Escapers. A summary profile for both follows and a link to more details is provided in the appendices.
Culturally Curious Tourists are: ● Curious learners who want to visit new places and expand their travel experience by exploring landscapes, history and culture. ● ‘Explorers’ rather than ‘tourists’ – they are well travelled and want to discover the hidden stories and get under the skin of a destination. ● They mostly use serviced accommodation, hire a car and travel around exploring the wider area. ● Looking for ‘out of the ordinary’ experiences. They want an interactive, local and personalised experience rather than the usual prescribed tour. ● Travellers who want to relax, enjoy and explore the natural environment and experience the real Ireland by being active in scenic landscape (walking, cycling etc.). They want to go home feeling they really explored and they want to feel good about themselves socially, physically, mentally and spiritually. ● Socially responsible and environmentally conscious. ● Quality conscious – quality is important to them in terms of quality of products and services they choose as well as the quality of life and wellbeing. They will pay extra
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for quality products such as personalised experiences, fresh local produce, hand crafted and organic products and recognised ‘quality badges’. ● Health conscious they look after themselves; going out of their way to eat healthy and stay active. ● They enjoy the outdoors and walking, cruising, angling and cycling experiences can appeal to them. ● People who like to be recognised and acknowledged for having made a good, cultural holiday choice. ● Individuals who like to share their special, personal experiences with others via word of mouth.
Great Escaper Tourists are: ● In need of downtime to escape from their busy lives so they can reconnect with themselves and loved ones. ● Sociable and enjoy interacting with local people as a means of understanding the living culture and hearing their stories through music, food and dance etc. ● Connected with nature and enjoy experiencing and watching the changing landscape as it can offer the respite they need from everyday life. ● Memory makers and will want to make treasured life-long memories while on holiday with their family and/or friends. ● Off season travellers and will travel mainly in Spring and Autumn. ● Independent, will hire a car and spend one to three days in a city and then tour mainly in a rural area to discover the local hidden gems. ● Very price and value conscious. ● Planners and need a lot of reassurance, planning and seeking personal and trusted recommendations before and during their holiday. ● Value seekers who will stay in a variety of good-value, quality local accommodation from B&Bs to self-catering. ● Active and enjoy outdoor activities such as walking, hiking, cycling, water activities, boat trips etc. The local tourism product as outlined in the section ‘Boyle Tourism Assets’ represents a good fit with both the Culturally Curious and the Great Escaper segments and whilst tourism in County Roscommon has historically underperformed relative to its potential, local government policies and strategies are targeting tourism growth over the coming five-year period.
3.4 Development of a new tourism experience brand for the region Over the last four years Fáilte Ireland has developed three experience brands – Ireland’s Ancient East, the Wild Atlantic Way and Dublin; A breath of fresh air – to provide visitors with motivating experiences and distinctive destinations.
In quarter four of 2016 Fáilte Ireland commissioned consultants, Colliers International, to assess the potential of a branding proposition to develop and grow tourism across a part of Ireland that includes County Roscommon. In Budget 2018 additional funding was provided to Fáilte Ireland to develop the new midlands experience brand. At time of writing, the new brand has not yet been announced, but when launched, it should have a positive impact on tourism growth within the region.
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3.5 Local government tourism policies and strategies
County Roscommon Tourism Statement of Strategy and Work Programme 20172022 The County Roscommon Tourism Statement of Strategy and Work Programme 2017-2022 notes tourism as an important economic driver, generating approximately €42.8m from overseas and domestic revenue. Noting that Boyle has the potential to expand its tourist related activities and facilities which would provide a significant economic and social boost to the town, tourism is regarded as having a compelling role to play in safeguarding and growing jobs in the local economy.
As stated, nearly three quarters of visitors to the Boyle area are from the domestic market and research with local tourism businesses and with the Roscommon Tourism Officer indicates that the majority of those domestic tourists are families and pre-retirement empty nesters.
The tourism statement of strategy notes the “weak” accommodation base throughout the county as a challenge to growing tourism;
“It is necessary to acknowledge that the accommodation base in the county is relatively weak in terms of its capacity to cater for increased visitor numbers. However, if the number of tourists can be increased to create a critical mass, this will encourage the private sector to provide additional accommodation”.
The strategy also cites innovation in product development as one the key drivers to growing tourism in County Roscommon;
“If the developed tourism product is innovative, imaginative and different it will enhance the visitor experience and create strong connections between the visitor and the product”.
Boyle Local Area Plan (LAP) 2015-2021 The Boyle Local Area Plan identifies a need for ongoing improvement of vacant and dilapidated buildings within the LAP area, particularly within the town centre. It notes that Boyle has a rich heritage value and that the historic value of the town is evident in numerous structures which have a significant architectural quality, however buildings in a poor state of repair detract from the character of the town centre. The plan identifies a need, where possible, for the re-use and redevelopment of vacant structures.
Fáilte Ireland A 2016 Fáilte Ireland report, Wider Benefits of Tourist Accommodation, states that;
“Tourist accommodation often provides a suitable and sustainable re-use of existing buildings, which maintains a local area’s architectural heritage while at the same time providing opportunity for economic activity, and thereby promoting sustainable development. By bringing older buildings back to life, tourist accommodation can also help to improve visual impacts on wider streetscapes”.
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County Roscommon Local Economic and Development Plan 2016-2021 The underperformance of tourism and its potential for development is also noted in the County Roscommon Local Economic and Development Plan. The plan aims to develop culture and heritage tourism initiatives and to develop and support tourism initiatives and key tourism assets; it has set a target to increase tourism activity by 10% per annum.
Roscommon Local Development Strategy (LDS) – LEADER Plan The LEADER Plan notes that Roscommon is often perceived as a county that visitors “pass through” on their way to other destinations;
“As an inland region, with some good attractions, but more limited in terms of tourism accommodation, the county has consistently underperformed relative to other counties”.
3.6 Tourism assets in Boyle Despite the historic underperformance, Roscommon, and Boyle in particular, has a number of tourism products that appeal to the Culturally Curious and Great Escaper target customers. These include natural, cultural and heritage assets that have potential to deliver enhanced and unique visitor experiences.
Boyle is located in north County Roscommon, 44 km from Roscommon town, 16 km from Carrick-on-Shannon and 40 km from Sligo. Boyle has a modern primary road and rail network that connects it to all the major cities and towns in Ireland. It is served by the N4 national primary route between Sligo and Dublin, and the N61 national secondary route to Athlone via Roscommon Town. The town is approximately a 40-minute drive from Ireland West Airport Knock.
Boyle is close to some of the county’s main tourist attractions such as Lough Key Forest Park and Arigna Mining Experience. The town has a number of historic buildings such as King House and historical structures like Boyle Abbey. The Boyle River running through the town is an attractive focal point and Boyle Harbour forms part of the Shannon-Erne Waterway and is only a ten-minute walk from Boyle Town. The recently completed Boyle-Carrick on Shannon Blueway offers 20km of paddling options and the development of a greenway between Lough Key Forest Park and the town is planned.
Community facilities in Boyle and nearby include assets which can also enrich the tourism experience; tennis courts, library, local angling, GAA facilities, golf course, all-weather soccer pitch, an outdoor adult exercise facility and children’s adventure playground.
Fishing in the wider Boyle area is popular with visiting tourists. Annual fishing competitions take place on Lough Key as well as many other surrounding lakes and rivers. Coarse angling is available on the Boyle River and Lough Arrow is popular for brown trout fishing. Other tourism and recreation opportunities in the area include camping, orienteering, nature walks, climbing, hiking, boating, sailing, rowing and golf.
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Boyle Arts Festival has established a reputation for excellence, earning it a place as one of Ireland’s leading arts festivals. The festival has won several national awards, creates “a real buzz in the town”, and attracts an audience in the region of 4,000-5,000 people annually including domestic and overseas tourists. The festival, which is growing annually, has a positive impact on the local economy during festival time.
Respondents to the online survey carried out for this study were asked to identify Boyle’s top tourism assets. Lough Key Forest Park was the unanimous choice; 67% of all respondents (both locals and visitors) rated it as the top tourism asset. It was followed by King House, Boyle Abbey and Boyle Arts Festival (in that order). Feedback on the fifth top tourism asset produced a mix of suggestions ranging from water activities (especially fishing), the town itself (shopping, friendly people, restaurants, appearance, etc) and the town’s links with Moone Boy.
Gaps in Boyle’s tourism infrastructure The online survey also explored opinions on gaps in Boyle’s tourism offering. Unsurprisingly, the shortage of accommodation was cited by 77% of all respondents as the biggest gap. Second in the list of gaps was the limited choice of quality options for eating out. Derelict buildings followed, then the shortage of all-weather activities e.g. swimming pool, leisure centre. Further down the list of gaps were items such as evening/night-time entertainment; lack of promotion/lack of belief/businesses not working together, and lack of cycle routes/greenway/links between the town and Lough Key. There were no discernible differences between local and visitor opinions on the tourism gaps.
Accommodation in Boyle Accommodation supply in County Roscommon remains a major barrier to tourism growth and this impact was also seen in the online survey where over 60% of visitors said that they stay for only a few hours/day trip. The B&B accommodation stock in Boyle equates to approximately 50 beds. Many existing accommodation providers are closed between November and March. Some B&Bs and self-catering properties are listed on Airbnb. There is also a caravan and camping park and a hostel.
The average B&B price across these properties equates to approximately €40 per person per night. No information is available on occupancy levels.
A survey undertaken throughout the county found that 66% of accommodation providers in Roscommon are not Fáilte Ireland approved with the majority citing “cost” as a barrier to becoming listed with the national tourism development body.
The recently appointed Roscommon Tourism Officer stated that a priority within the current tourism strategy is to encourage existing accommodation providers to engage with the Fáilte Ireland approvals process and to encourage others to think about the potential to develop new Fáilte Ireland approved tourist accommodation.
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The only hotel in the town, The Royal Hotel, closed approximately a decade ago with a loss of circa 20 bedrooms. While Roscommon County Council recently bought the premises, and has invited expressions of interest on the future use of the building, plans for its use are unknown at time of writing.
Accommodation is a core component in the creation of a successful tourist destination. Outside of accommodation, tourism incorporates activities, visitor attractions, travel operators etc. In addition to businesses directly involved in tourism, a wide range of other businesses benefit from tourist spend such as retail, pubs, restaurants, entertainment venues and so on.
Tourists choose a destination because of factors such as natural scenery, culture, visitor attractions and events, as well as tourist accommodation. However, tourist accommodation can be instrumental in facilitating and maximising tourism spend in an area by converting day trippers into overnight visitors. Tourists who overnight in a destination spend their money both inside and outside their accommodation, which means increased footfall for other local traders and service providers, and an additional chain of economic activity generated beyond the accommodation itself.
Given the town’s tourism assets, its accessibility and Fáilte Ireland’s impending development of a new destination brand for the region, it is not unreasonable to expect that targeted levels of tourism growth can be achieved. Key to driving that growth will be factors such as collaboration amongst public, private and community operators within the town and a proactive communications strategy that positions Boyle as an appealing tourism destination within the region.
A priority for tourism development and economic growth in the town must be the development of quality serviced tourist accommodation.
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4. Albergo Diffuso – the scattered hotel model in Italy
4.1 Introduction The original Albergo Diffuso idea evolved from the rebuilding and repurposing of houses that were destroyed in an earthquake in the Friuli region of Italy in 1976. In 1982, the term Albergo Diffuso was first introduced as part of a pilot project in Comeglians and the idea was formalised with the development of the Albergo Diffuso hospitality model by tourism marketing professor Giancarlo Dall’Ara3.
The model was formally acknowledged and regulated at local government level in Sardinia in 1998 and since then, the criteria for the model’s standards have been written into regional tourism legislation by most of Italy’s 20 regions. With some variations between regions, the essential norms remain constant across all. This gives the Albergo Diffuso the same standing in Italian law as other accommodation such as hotels, B&Bs, Agriturismi etc.; this was regarded as critical in order to help Albergo Diffuso promoters source business finance.
The aim of the model is to repurpose abandoned or vacant buildings in villages or towns as tourist accommodation in order reanimate the town centre, stimulate economic activity and halt the depopulation of those towns.
4.2 Albergo Diffuso Overview Albergo Diffuso translates literally as “scattered hotel”. As the model has started to expand outside of Italy, the Italian term Albergo Diffuso is typically used to describe the accommodation experience and it is positioned almost as a unique brand with its own identity that needs no translation.
The model is built on a horizontal structure as opposed to the vertical one typically associated with hotels. By providing guest accommodation across a number of properties in a town or village, it aims to give guests a unique experience of staying in the historical centre, enabling tourists to imbed themselves in village life, living like a local with the added bonus of hotel services.
The principle of the model prescribes that rooms should be decorated to a high standard of quality in an authentic homely and local style4. It prescribes that all the services of a traditional hotel are provided, albeit that bedrooms are scattered or dispersed around the historical centre within a radius of approximately 200 metres from the centre. Guest services provided include reception and concierge assistance, common spaces, dining facilities, daily room service, linen change etc.
Guests should be able to walk to other services such as a bar, reception or common area within 3-4 minutes as they would in a traditional hotel – in essence, the streets of the town
3 www.giancarlodallara.com 4 As with traditional hotels, it is to be expected that different standards of rooms are available with different prices associated with each e.g. standard Vs luxury rooms or suites.
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become the corridors of the hotel. Food should be local with a focus on local artisan producers.
A core element of the experience is that the hotel operates under the supervision of a single General Manager (GM), who is trained and experience in hotel management with the support of additional employees – in the same way a traditional hotel is managed.
Originator Giancarlo Dall’Ara stresses the vital importance of a GM to oversee operations and ideally a GM who is from the area and/or is currently living in the area; in an interview with the consultants, he noted that “this is more than a network of connected buildings, this is an hotel which needs to offer its customers all the services they would expect from an hotel. If somebody wants breakfast in bed in the morning, they need to be able to get it”.
Mr. Dall’Ara, also the founder and president of the National Association of Alberghi Diffusi (ADI), noted that the projects throughout Italy act as “drivers of development” in villages, with GMs encouraged to source products that are used in the hotel from local producers.
The model is environmentally sustainable as it is created within existing buildings and does not require new construction. It builds on an existing network of hospitality providers (e.g. visitor attractions, activities, restaurants, local food producers etc.). Its economic impact can extend beyond the accommodation itself, stimulating others in the community to expand an existing tourism offering or to create new tourism experiences. In Italy, it has also had the effect of season extension as many target customers seek “off the beaten track” destinations outside of the typical peak season. Dall’Ara stated that 90% of ADI members are open year-round.
4.3 Target customers The Albergo Diffuso model targets what Dall’Ara, the originator, describes as “third generation” tourists. These are people who have “the desire for a unique vacation experiencing new and different places, receiving personalised services and looking for authenticity and immersing him/herself within local cultures. S/he is not only interested in visiting a new place, but also in living it”. The description of the target customer identified by Dall’Ara very closely resembles the Culturally Curious target segment identified by Fáilte Ireland.
The overall aim is to give visitors an experience as “temporary residents” of the area rather than being like “traditional tourists”. This also closely reflects the current international trend for tourists who want to ‘live like a local’ resulting in the significant growth in the socalled ‘sharing economy’ and demand for accommodation platforms such as Airbnb, for example.
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4.4 Critical success factors A successful Albergo Diffuso is usually created where the following conditions are satisfied5
● The idea has been launched within the local community where residents are supportive of the innovation and local actors are interested in working together ● A single management company can be created and is willing to take most of the entrepreneurial risk. The management company can be a single entrepreneur, a cooperative, or another business enterprise that manages properties on behalf of multiple owners ● A reasonable number of rooms (minimum 7) are located at a reasonable distance from each other (not more than 200 meters), and are made available to the management company over the long term (minimum 9 years) ● A minimum level of additional services is available to the guests within the town (e.g. availability of pharmacy, food store, restaurants, etc.) and service providers commit to a seamless experience for guests ● The surroundings of the area should have touristic appeal (countryside, sea, mountains, archaeological sites etc.) ● The town or village is inhabited by a lively and welcoming community, proud of their town and ready to share experiences and quality time with tourists ● The entire town, i.e. not just the property owners, but also restaurants, B&Bs, craft shops, community groups and the local authority, must be involved in and fully support the endeavour 12 months of every year
In Italy the model is successful with local communities for various reasons including: ● Awareness of the advantages in terms of image, social life, economic returns and regeneration of the local town ● Local authority contributions to the model in the form of the provision of common spaces for reception as well as improvements public realm and the restoration of services such as libraries, community halls, sport facilities etc. ● Property owners start to look at their assets in a different manner and with “tourist” eyes, they identify problems and joint solutions to solve them ● Local enterprises evolve across a number of sectors such as local services, agrifood/wine, and local crafts, because such promoters see the Albergo Diffuso as an opportunity to grow their own businesses due to increased footfall in the town and therefore increased demand
4.5 Governance In Italy, an Albergo Diffuso generally takes one of the following administrative structures:
1. A private investor refurbishes houses in a town/village that are either already in the family or have been purchased by them, and runs the AD as a private business6
2. A group of local actors (property owners and other beneficiaries such as restaurants, retailers etc) creates a consortium and outsources the operational management to employees of the consortium or to an external management company
5 Albergo Diffuso, Developing Tourism Through Innovation and Tradition, IDEASS Italy (Innovation for Development and South-South Cooperation) a United Nations Development Programme. 6 This appears to be the most common format
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In both scenarios local government and/or LEADER funding has typically had some form of involvement in incubating the projects either with direct financial support to property owners and/or investment in public realm.
4.6 Challenges Dall’Ara is critical of property owners who do not fully deliver on the AD model, citing Puglia as an example where the term Albergo Diffuso is being “abused”. He refers to property owners in Puglia creating a network of accommodation, but because they do not offer a comprehensive hotel service, he considers that their approach is damaging the Albergo Diffuso brand reputation.
Maurizio Droli, Lecturer at the University of Udine and founder of International School Specializing in the Albergo Diffuso (SISAD)7 states that “Unfortunately, only a few of the ADs operating in Italy and abroad in the last thirty years are achieving the needed results in each of the key areas of Effectiveness, Efficiency, Equity and Ecologic sustainability issues. The majority of them are struggling to compensate higher managerial costs compared to those of conventional (vertical) hotels. Moreover, the existence of, fortunately a small part of them, is depending on public-funding”.
In an interview with Maurizio Droli, he cited the example of the Friuli Venezia Giulia region where state funding has been supporting ADs locally for the past 15 years. This compares with Sardinia where state funding contributed to the original refurbishment work only, but the ADs there are now self-sustaining.
Droli referred to the quality standards that pertain to the traditional hotel model and noted that the AD must adhere to those as well as many others that relate to public realm and the maintenance of other privately owned buildings in the town; as previously noted “the streets of the town become the hotel corridors” in an Albergo Diffuso.
4.7 Impacts There are currently 100 ADs in Italy scattered across approximately 500 buildings8 but quantifying the impact of the AD model is difficult as Maurizio Droli notes “there is no definitive data on the sector”. However, in his book Manuale dell’Albergo Diffuso, Giancarlo Dall’Ara cites some statistics from the ADI membership in 2012 including:
● Overseas tourists account for approximately 40% of AD guests with the majority from Europe ● Two thirds of AD promoters have no previous tourism experience, and one third are former hoteliers ● 90% of ADs are open year-round and most are in rural towns and villages in Italy
An earlier report from 2010 states that:
● 86% of ADs provide a reception, library/lounge, restaurant/breakfast room and a general foyer area ● 70% have 30 rooms or fewer ● Room rates in 2010 ranged from €30 a night for a standard single to €500 for a suite
7 http://www.sisad.it/it/home_page 8 Out of approximately 7 million empty houses
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4.8 International Interest The concept has been adopted and implemented in Spain and is being explored in other countries including Germany, Switzerland, Croatia, and Giancarlo Dall’Ara is currently working, in a consultancy capacity, with a group in Japan to develop the first Asian AD. It should be noted that the Spanish model is underwritten by an international wine producer that also operates an international restaurant chain9.
Source: Giancarlo Dall’Ara
Source: Giancarlo Dall’Ara
9 https://www.thedrinksbusiness.com/tag/hacienda-zorita-albergo-diffuso/
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Case study – Friuli Venezia Giulia
A pilot programme to develop the Albergo Diffuso concept was implemented in the Friuli Venezia Giulia (FVG) region of Italy with funding under LEADER in the 1994-1999 programme. Following the pilot programme a law was passed under regional legislation in FVG to require Albergo Diffuso structures, as they were developed in towns throughout the region, to provide tourist accommodation for at least 80 people. The legislation detailed that accommodation was to be set in residential buildings and managed by a business partnership or management company (normally in the form of a co-operative) between the owners of the buildings. In some towns/villages the town council and other private commercial and/or social enterprises are also members of the management company. Further renovation funding was granted with ERDF funds in the programming periods of 2000-2006 (Docup Objective 2) and 2007-2013 (ROP ERDF) to both private and public owners of buildings across a number of different Albergo Diffuso structures throughout towns in the FVG region. The grants were awarded to integrated projects (IPs) consisting of public and private owners. The public beneficiary i.e. the Municipality in which each Albergo Diffuso is located, assumed the role of lead partner and applicant. ERDF financed 50% of the costs borne by house owners for design, renovation works and purchase of furniture. The regional government of Friuli Venezia Giulia, acting as the Managing Authority (Autorità di Gestione) of the funding programmes, paid the ERDF funds as well as quotas of national and regional co-funding, directly to the beneficiaries of the selected integrated projects. Beneficiaries had to agree to comply with the restriction that their properties were to be available as tourist accommodation for at least 10 years from receipt of the final ERDF payment grant. They were also obliged become members of the Albergo Diffuso management company. At present there are 21 such management companies overseeing the operation of 21 Albergo Diffuso structures throughout the FVG region. Between them, they provide tourist accommodation for 1984 people in 373 residential buildings. A review of the impact of the ERDF funding was undertaken in 2015 to evaluate the socioeconomic impact of the Albergo Diffuso structures in FVG. For the purposes of this report on behalf of Boyle Town Team, the relevant key findings are noted below:
Property owners
The primary motivation for property owners to get involved included:
• Opportunities for owners to restore abandoned housing • Opportunities for owners to create additional sources of income to supplement their primary income source • Desire for owners to be part of the regeneration of their town or village
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Renovations
In applying for funding, property owners had to commit to a minimum spend of €30,000 per housing unit for cosmetic changes to their properties, a minimum of €60,000 per housing unit for internal and external refurbishment or a maximum of €300,000 for major infrastructural renovations.
The review demonstrated that the following expenditure was typically incurred:
Spend % property owners
Up to € 100,000 3%
From € 100,000 – €200.000 43%
More than € 200,000 43%
Approximately one third of property renovations yielded 1-5 beds per property, just under half of the renovations delivered 6-10 beds per property and the balance ranged from 1120 beds per property.
Management structure
The review found that management companies established with the membership of the property owners are unanimously perceived as the ‘beating heart’ of established ADs and are regarded as critical to their success over the long-term. Key activities undertaken by the management companies include:
• Reception and reservations
• Financial management
• Care, maintenance and cleaning of rooms
• Promotion and marketing
• Networking
• For some ADs, the management company also undertakes responsibility to drive tourist demand for the destinations in which the AD is located through the joint development or support of cultural activities and events etc.
The review noted that in most cases, the workload of the management company increases with the increase in the number of beds that come on stream within the AD.
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Impacts of ADs on the local areas
Tourism growth
75% of respondents stated that tourism in their local area has grown as a result of the Albergo Diffuso. Growth varied across different ADs, with recorded levels ranging from 20% to 60%.
Job creation
All of the ADs within the review resulted in the creation of jobs in their local areas, particularly for temporary or seasonal contracts for cleaning and maintenance services.
Challenges of ADs
The review examined the relationships between owners and identified that levels of conflict between property owners were as follows:
Conflict experienced in the operation of the AD? %
Never 54%
Sometimes 32%
Often 11%
No response 3%
For those who identified that conflict is ‘sometimes’ or ‘often’ an issue, the main reasons for such conflict were cited as:
• Lack of transparency in the criteria used for the distribution of guests
• Distribution of earnings, which were not always perceived as adequate for the level of commitment owners were required to give to their accommodation
• Differences in the prices of different properties
• Management costs
• Differences in opinions regarding cleaning, check in and out activities and property management in general
• Failure to comply with decisions taken by a majority in the management companies
• Lack of collaboration and negative attitudes with respect to the future and to the development of the AD
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Subvention for the ADs in Friuli Venezia Giulia
The review examined the property owners’ assessment of the AD’s sustainability in the absence of further public subsidies.
64% of respondents consider the chances of autonomous survival ‘very limited’ and 30% as ‘limited’.
The majority of ADs considered that public subsidies were necessary to support ongoing promotional activities for the ADs and the geographic areas in which they are located. They also noted that ongoing public investment is required in the locality surrounding the AD for elements such as infrastructure upgrades in roads, trails, broadband.
The review also states that the ADs in the FVG region believe public subsidies are essential to meet the expenses of the management companies and guarantee their survival. This reflects the comments of Maurizio Droli who stated that ADs in this region have been in receipt of state subsidies for the past 15 years.
Conclusions of the Review
Overall the review is positive about the impact that the Albergo Diffuso model has had on marginalised areas within the FVG region.
The investment has helped to arrest the total demise of small businesses in some towns thanks to the increase in tourists and in particular the type of tourists that are attracted to the AD model.
The development of ADs in the town has also resulted in upskilling of locals and has deepened and strengthened relationships between all of the players (property owners, other service providers, local government).
The report notes that whilst state subvention has been instrumental in creating the accommodation product, much more work is still required in the area of marketing and promotion. The report recommends that members of the management companies take a more active role in their respective management companies to optimise the true potential of the model.
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5. An Albergo Diffuso in Boyle – How might it work?
5.1 From Concept to Reality Based on the brief for this pre-development study and having researched the Italian Albergo Diffuso model, this chapter outlines local reaction to the idea, estimates for capital development, potential sources of capital funding, a description of the various components of the project, assumptions, risk factors, and estimated financial projections.
5.2 Reaction to the Idea The online survey was completed by 312 respondents; people involved in tourism in Boyle, members of the local community and tourists.
Despite most (85%) having no direct experience of an Albergo Diffuso, respondents showed strong interest in the idea of an Albergo Diffuso in Boyle.
Overall, 84% of respondents believe that the concept is worth exploring, and 77% think it could help grow tourism. Within these overall figures, there is a slightly higher level of interest among visitors than among locals, but this should be viewed with the caveat of the small sample size of visitors who completed the survey.
Looking behind the top-line data, there is uncertainty on whether an Albergo Diffuso will ultimately prove to be right for Boyle. 180 respondents (60% of the total) made additional comments; many positive, many cautious, many negative.
As well as thinking that the AD idea is worth exploring, the research shows demand from the local community for a function room to cater for ‘cradle-to-grave’ family events and community events (christenings, weddings, parties, funeral lunches, meetings, functions etc). It should be noted that it is difficult to envisage where such a facility could be made available within the properties that have expressed an interest in the Albergo Diffuso model.
Sample comments that reflect overall sentiment:
Positive comments
● “I believe the concept is a perfect fit for Boyle as it would result in solving two key issues. Firstly, it would provide high quality accommodation to capture tourists currently visiting the region but staying elsewhere. Secondly it would improve the current state of the town centre derelict buildings improving the town’s appearance.” ● “Good idea when we haven’t got a hotel, but will it hinder in the development of a future hotel?!” ● “I strongly support the concept of a scattered hotel having stayed in them in Italy. However, there, I understand that the state has some involvement in some of the buildings, and I do not know whether a similar involvement would work here. A high quality of design is essential, and the external links between the buildings have to be treated, maintained and considered in the same way as corridors, and garden circulation routes in hotels.”
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Cautious comments
● “Boyle businesses need to do more to work together rather than compete with one another. They must do this before the idea of a scattered hotel will work in the town.” ● “I agree with the concept but primarily this town needs an hotel. Should the idea come to fruition what will be the financial input by the owners of the property and what happens in the event of it not being a success, is restoration money refunded?” ● “I think that it is an excellent idea and that it would really work in Boyle but I also think that as well as this idea been a great idea for Boyle, the town really does still need a hotel.”
Negative comments:
● “It would not solve the problem of a lack of a function room to cater for large groups. Coach tours, Weddings, Funeral parties, etc. Competition within vested interests of property owners may make it unworkable.” ● “No room service, no porter, having to walk somewhere else for breakfast early morning with children maybe in pouring rain. No, no, no – that’s not a holiday, great for hot countries.” ● “I think it would be far better to have a conventional hotel rather than a scattered hotel”
Note: more analysis of the online survey is included in the appendices.
Interviews with Tourist Attractions
Feedback from interviews with owners and managers at visitor attractions in Boyle has also been very positive about the potential for additional tourist accommodation in the town.
All those interviewed believe that the scattered accommodation model could have the potential to extend visitors length of stay in the town, extend the season and that “it can’t but be positive for tourism in the town”.
5.3 Capital Development Site visits revealed that the properties that have expressed an interest in the AD project are in various stages of condition and repair. Two of the properties are already operating as tourist accommodation; one as a B&B and one as self-catering. For all other properties, significant capital investment will be required to bring them to the standard expected by today’s domestic and international tourist and to achieve the Fáilte Ireland Welcome Standard.
Fáilte Ireland Accommodation Classification Under the Tourist Traffic Acts 1939-2011, Fáilte Ireland has specific powers and functions in relation to accommodation legislation, monitoring of product quality, customer relations and the management of appointed sub-contractors for the inspection and registration assessment of various accommodation categories.
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All hotels in Ireland must be classified using the Fáilte Ireland Hotel Classification Scheme, and hotels must attain the “Approval” minimum entry level requirements in order to comply with the Registration and Renewal of Registration Regulations for Hotels 2016. Only premises that meet with these requirements can call themselves a “hotel”.
An Albergo Diffuso would not meet the requirements of the Registration and Renewal of Registration Regulations for Hotels 2016 so the term “hotel” cannot be used. Therefore, the consultants advise that the proposed development should aim for approval under the Fáilte Ireland Welcome Standard10. To meet the needs of the target customer, fit out, facilities and decor of the bedrooms should be done at least to a standard comparable to that of a 4* guesthouse or hotel.
Bedroom Development Costs The minimum size for a double bedroom should be around 15 sq. metres (in keeping with Fáilte Ireland regulations) and all bedrooms should have en-suite facilities.
Renovation costs could be anywhere from €1,500 to €3,000 per square metre, meaning that it could cost between €22,500 and €45,000, or more, to bring each bedroom to marketready standard. Detailed costings are beyond the scope of this pre-development study and further investigation of capital development costs on a room by room and building by building basis would be required.
Note: Most of the properties that have expressed an interest in the AD project are situated in Architectural Conservation Areas and could therefore be on the higher end of the scale for renovation costs. Even where a property itself is not a protected structure but it adjoins one, higher levels of renovation costs should be expected.
Bedroom Decor and Style The brief for this study suggested “all rooms should be fitted out and decorated to a single template”. However, this is contrary to the format prescribed by the Italian AD model, which stipulates that rooms should be in keeping with the character of each building and that homogenisation should be avoided.
The consultants recommend that all rooms should be developed to the same general, high standard of comfort, furnishings and facilities, but note that the nature of individual buildings (high/low ceilings, large/small windows, presence/absence of period features etc) will naturally mean that some rooms will be more appealing to the customer. A tiered pricing model could be applied to reflect this, e.g. standard rooms and deluxe rooms.
It is also recommended that some rooms are available at ground floor level to facilitate guests with limited mobility.
10 See appendices for details of the Fáilte Ireland Welcome Standard
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Central Reception Area The reception area could be an existing structure or conversion project which would act as the administrative central office for overseeing operations, reservations, key pickup and drop, and general guest enquiries. The accounting and back office costs would also be housed here. Such a space could potentially be housed in King House or in the courtyard area of King House, but given the high level of vacancy, there are other options also in the town.
Breakfast and Other Food Options It is recommended that the food element of the experience be provided by existing restaurants/cafes/gastro-pubs. This would have the effect of spreading the economic impact of increased footfall to other hospitality services within the town and avoid the necessity for additional employees within the AD management model.
As previously noted however, the entire experience should be seamless for the customer, thus restaurants/cafes/gastro-pubs that decide to engage with the project must, as far as possible, commit to an “on-demand” service. As Dall’Ara also noted “If somebody wants breakfast in bed in the morning, they need to be able to get it”.
5.4 Potential Sources of Funding The cost of developing the properties is assumed to be incurred by the property owners. However, a number of potential sources of both loan finance and grant-aid have been identified which could help with the overall cost of renovation and these (outlined below) will require further exploration should the project proceed to the next stage.
Central Government Funding It is understood that an approach has been made to central government to assist the property owners with the capital cost of refurbishment, but it is not certain how such funding would be administered or whether it is proposed it be positioned as loan finance or non-repayable grants.
It was suggested that in the event such funding were to be made available by Central Government, a business entity would be the preferred route for administration.
Roscommon LEADER Partnership – grant aid The County Roscommon LEADER Programme 2014-2020 currently has funding for tourism projects of €700,000, of which half has already been committed to tourism projects.
Within the current round of LEADER funding, Roscommon LEADER Partnership has confirmed that self-catering accommodation is eligible for funding at a level of 50%; B&B in a domestic house is not.
Match funding can be drawn from private investment or the national exchequer (e.g. Local Authority, Fáilte Ireland capital grants scheme), but not from other EU sources. The latter would be regarded as double funding which is not permitted.
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Any project in receipt of LEADER funding should remain operational for approximately five years after the final tranche of funding has been drawn down.
Credit Union – loan finance The Credit Union in Boyle has been approached by the property owner’s group and the it has stated that it is, in principle, open to the idea subject to loan applications and approval on a case by case basis.
Western Development Commission (WDC) – loan finance The WDC’s Community Loan Fund offers capital to community and not-for-profit groups that have worthwhile ideas about how to improve the socio-economic life of their community.
Loan amounts are repaid on an amortised basis by monthly direct debit. There is a charge of a fixed 3% margin for the term of the loan with no arrangement fee. The WDC does not ask for personal guarantees and it would only be in exceptional circumstances that security on the funded asset would be sought. The term of these loans typically ranges from three to ten years and the WDC can also consider providing ‘bridging finance’ against approved grant-aid letters of offer.
The WDC stated that it would consider loans to individual property owners (subject to full business plans and all other relevant documentation), but would also consider a loan to a business entity such as a co-operative or other entity that was representative of the property owners. In the case of the latter, the business entity would be awarded the loan on behalf of the property owners to develop the properties and the rental income would be used to repay the loan (also subject to necessary documentation). In this instance, property owners would have to agree to waiving the rental income until the loan is repaid – but in the intervening period the properties will have been renovated and, it is anticipated, will have appreciated in value.
The WDC’s average initial investment on a business project is typically in the region of €250k-300k, and around €100,000 for community projects. However, higher amounts can be considered if a project can show an ability to repay.
Preferred funding vehicle
For each of the above potential sources of finance, the funding bodies have differing views on whether the applicant should be individual property owners or if the applicant should be an entity which applies for funding on behalf of the property owners. In the absence of detailed information, it is impossible to definitively state which is preferable at this early concept stage; however, all are positively disposed towards the potential of the project and are happy to review applications on a case by case basis.
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5.5 Applying the model in Boyle To successfully recreate the Albergo Diffuso model in Boyle, the minimum standards that need to be present, as prescribed by the concept originator Giancarlo Dall’Ara, are:
Albergo Diffuso requires… Potential for Boyle to meet the requirement
Town centre with a stock of vacant habitable properties
Plenty of potential properties that can be renovated and repurposed.
Central Reception Office that is professionally staffed
A local structure currently provides a tourism service, and with additional investment, training and upskilling, it could take on a coordination role.
Space within King House or its courtyard area could potentially be suitable to house the Central Reception Office, as indeed could other vacant properties in the centre of the town.
Provision of communal services that can be accessed by guests i.e. central lounge/seating area, bar, restaurant as is be the norm in a traditional hotel
No central lounge or function room is currently envisaged. Communal services would most likely be provided by local bars and restaurants.
In research with local bars and restaurants, nine cafes/pubs stated that they would be interested in working with accommodation providers to make meals available to guests.
Maximum 200m distance between the communal services and bedrooms
This is achievable within the Patrick St, Green St, Main St area.
Local vibrant community who will welcome guests and integrate them into the local community and the local culture
Existing tourism providers are positive about the concept and believe that it could add to the overall experience in Boyle.
The online survey cautions that businesses must put aside personal interest and work in partnership for the benefit of the town.
Defined structure that ensures consistency in service quality, irrespective of the specific provider
Members would need to agree to a customer-centric philosophy.
Within the structure, there could be no guarantee that each property owner would enjoy the same level of occupancy. Different building structures will necessitate different room styles (albeit to comparable standards) with different pricing, and in today’s world, the customer is the ultimate arbiter of demand. Some buildings (even in their current condition) are more visually appealing than others and even if decor and fit out are to a similar standard, the nature and location of some building may make them more appealing than others.
Appointment of general manager
A general manager would need to be employed with responsibility for operations, marketing and administration of the entire visitor experience.
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Issues to Consider In ascertaining the ease with which the model could be delivered in Boyle, the following facts should be considered:
Interest from Property Owners The research has identified that in the absence of state funding, there is limited appetite amongst property owners to invest in the redevelopment of their respective properties as scattered tourist accommodation.
● Of the nine property owners interviewed, only two stated that they would still be interested in the Albergo Diffuso model if no grant aid was available to support the renovation of their property. (The consultants were unable to make contact with the tenth property owner). ● A further three property owners stated that they may be still interested if other people also remain involved in the project but expressed concern about ‘going it alone’ without the involvement of a core group. ● Four were clear that without grant aid and potential tax breaks, they would not consider being involved in the project.
Local Restaurants/Bars Research with local bars/restaurants to gauge their interest in the project was broadly positive with all stating they believe the concept could help to grow tourism to Boyle and that it could help their individual businesses. When asked about providing the food element of the Albergo Diffuso model nine11 cafes/pubs stated that they would be interested in working with accommodation providers to make meals available to guests. However, it should be noted that currently, outside of the peak tourist season, no evening meals are served in pubs/restaurants in Boyle from Sunday – Wednesday.
All but three stated that they would be interested in providing evening entertainment for tourists at certain times of year; “We are looking to grow our bar business and focus on live music, so this is the perfect opportunity for us”.
In the online survey, restaurants/food/choice was identified as the second main gap (after accommodation) in Boyle’s current tourism offering.
Local Authority Support Roscommon County Council has expressed its support in principle for projects that can help to rejuvenate the centre of Boyle. More specifically in relation to the Albergo Diffuso project, Roscommon County Council Director of Services and members of the Planning and Building Control department have confirmed their support for the repurposing of vacant property as tourist accommodation in Boyle. Roscommon County Council has said that it can provide the following supports to help expedite the planning process:
1. No development contributions for change of use will be charged, yielding a saving for property owners in the region of €20.80 per square metre;
11 Total number of respondents was twelve
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2. A sliding scale would be applied to commercial rates which would see no rates paid on properties in year 1 of operation, 20% payable in year two progressing to 100% of rates payable after 6 years of operation; 3. Car parking could be evaluated on a case by case basis with the potential to relax parking laws; 4. Pre-planning meetings could be facilitated to specifically support property owners interested in the Albergo Diffuso project with the aim of minimising pre-planning expenditure.
The Local Authority also stated that whilst it would not be in a position to manage the scattered tourist accommodation model, it could, for example, host the reception area in a county council-owned building in the town centre.
In reference to the Italian model which notes that “the streets are the corridors of the hotel”, significant investment in public realm may also be required to ensure safe, litterfree and comfortable walkways for guests at all times.
Governance Structure & Management As with the Italian model, a management company would need to be established through some form of corporate entity to manage the tourist accommodation experience on behalf of the property owners and guests. The underlying assumption is that the corporate entity will be NFP (not for profit) and ideally registered as CHY (Charity Status).
This could take the form of a Company Limited by Guarantee or a Co-Operative or indeed a hybrid of both. It is recommended that at the next stage more detailed legal and accounting advice is sought to identify the model that is best suited to the project.
Shareholders/members of the management company (for ease of referral purposes hereinafter referred to as Central Reservations Office Ltd. or CRO Ltd.) would have to include property owners, but could also include other service providers such as restaurants/cafes/bars.
The management company would need to be funded by a fee payable by the property owners and by commission on converted bookings.
The role of the management company ought to be outlined in a Service Level Agreement with the shareholders that, as per the Italian model, is likely to include:
● Reception and bookings ● Care, maintenance and cleaning of rooms ● Financial management ● Promotion and marketing ● Networking on behalf of the properties amongst other local tourism providers
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Title of the properties would remain with the existing property owners, who would commit to their property being available to CRO Ltd. as tourist accommodation for a lengthy time period (to be agreed). Separation of ownership and management protects the primary assets in the event of adverse financial or litigious circumstances affecting the management company.
Suggested Founding Instruments There would be three critical supports to the successful foundation of CRO Ltd.:
1. Memorandum and Articles of Association which must ensure clarity in the scope of the company’s authority and activities, and robustness in its structure to provide for stability. 2. Protocol (legally binding) to be agreed between the shareholders and CRO Ltd. that will regulate and define the role each party shall play in the development and operation of the CRO Ltd, and that will set out the financial and other obligations of both parties. 3. Licence or Lease to be granted to CRO Ltd. by the property owners, which both facilitates development and ensures protection of the assets.
Board of Directors It would be important that the Board of Directors of the management company include an appropriate mix of skills and experience among its members to ensure that the company is guided effectively to fulfil its objectives and meet the goal of creating a successful accommodation and tourist destination. It needs to be efficient and certain in its decisionmaking and be capable of bringing influence to bear on other bodies where required by the interests of the CRO.
In addition to the members nominated by the major shareholders, provision should be made for a number of further members who may be co-opted by the Board. This would enable the Board to ensure that there is a good balance of relevant skills and experience among the directors. As large boards are unwieldy and not conducive to fast and effective decisionmaking, the size should be limited to about 10 members. The Board would have overall responsibility for the governance of the company, including its strategy, operations, staffing and finance.
Sub-committees of the Board covering, for example, marketing, development and finance could facilitate a more even distribution of the overall workload among directors. Moreover, it would not be necessary that the sub-committees be comprised solely of Board members – others could also be invited to participate in order to enhance the skills and experience available.
The above are general guidelines only and professional legal and financial advice should be sought in the first instance.
Challenges with a co-operative model Giancarlo Dall’Ara expressed concern about the management of an AD by a community led co-operative model. He stated that he has observed communities attempting to manage ADs with such a model and that it has not worked well;
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“It is a romantic idea, but almost impossible to create. There can be jealousy within the group with some property owners believing that others are getting more business than they are. I won’t say it can’t work, but I haven’t seen it work well so far”.
As noted in the Friuli Venezia Giulia case study, over 40% of management companies refer to conflict between property owners due to issues such as ‘lack of transparency in the criteria used for the distribution of guests’, ‘inadequate distribution of earnings relative to the level of commitment required’ and ‘differences in the prices of different properties’.
5.6 Financial Modelling and Assumptions Notwithstanding the range of issues to be considered and the challenges to the co-operative model as noted by Dall’Ara, a financial overview model has been prepared. For the purposes of identifying break-even and stabilisation points within the proposed project, the financial model assumes that issues and challenges can be overcome in Boyle.
See overleaf for profit and loss.
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Profit and Loss Account for Boyle Albergo Diffuso (40 units) over six years.
Year 1 2 3 4 5 6
Average Rental Rate (ex VAT) €59.63 €64.22 €73.39 €82.57 €87.16 €87.16
Nights open per year 300 320 350 350 350 350
Total Possible Rentals 12,000 12,800 14,000 14,000 14,000 14,000
Total units rented 4,800 5,760 7,000 7,700 8,400 9,100
Occupancy (Annual) 40.00% 45.00% 50.00% 55.00% 60.00% 65.00%
RevPAR 23.85 28.90 36.70 45.41 52.29 56.65
Total Units Rental Income €286,239 €369,908 €513,761 €635,780 €732,110 €793,119 Minus Property Owner Payments @60% €171,743 €221,945 €308,257 €381,468 €439,266 €475,872 Net Income €114,495 €147,963 €205,505 €254,312 €292,844 €317,248
Less: Expenses
Manager Cost 100% F €50,000 €50,000 €50,000 €50,000 €50,000 €50,000
Cleaning Cost €10 (1 hr) €48,000 €57,600 €70,000 €77,000 €84,000 €91,000
Sundry Cost €2 per unit €9,600 €11,520 €14,000 €15,400 €16,800 €18,200
Rates (on CRO) €15,000 €15,000 €15,000 €15,000 €15,000 €15,000
Insurance F €5,000 €5,000 €6,000 €6,000 €6,000 €6,000
Electric €500 pm €6,000 €6,120 €6,242 €6,367 €6,495 €6,624
Heating 100% V €2,000 €2,040 €2,081 €2,122 €2,165 €2,208
Sales & Mkt 4% of sales €11,450 €14,796 €20,550 €25,431 €29,284 €31,725
3rd party Commission €25,761 €33,292 €46,239 €57,220 €65,890 €71,381
Website Comm. @2.5% €1,431 €1,850 €2,569 €3,179 €3,661 €3,966
Accountant Fees 100% F €3,000 €3,000 €4,000 €4,000 €4,000 €5,000 Bank Charges 100% F €1,000 €1,000 €1,000 €1,000 €1,000 €1,000
Travel expenses €2,000 €2,000 €2,000 €3,000 €3,000 €3,000
IT & Licenses 100% F €1,000 €1,000 €1,000 €1,000 €1,000 €1,000
Prof Fees/Consultancy 100% F €3,000 €3,000 €3,000 €3,000 €3,000 €3,000
Total Overheads €184,242 €207,218 €243,681 €269,720 €291,294 €309,104 Net Profit/Loss €69,747 €59,254 €38,176 €15,408 €1,550 €8,144
Fixed Costs €92,681 €96,482 €104,992 €110,520 €114,893 €118,678
Variable Costs €91,561 €110,736 €138,689 €159,200 €176,401 €190,426
Contribution €194,677 €259,173 €375,072 €476,580 €555,709 €602,693
Contribution % (CM/Sales x 100) 68.00% 70.10% 73.00% 75.00% 75.90% 76.00%
Breakeven Point €136,271 €137,705 €143,814 €147,439 €151,364 €156,175
Breakeven no of rentals 2285 2144 1959 1786 1737 1792
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Inflation assumed at 2%
RevPAR, or revenue per available room, is a performance metric in the hotel industry that is calculated by multiplying a hotel’s average daily rate (rental rate) by the occupancy percentage.
F = Fixed Cost; V = Variable Cost
Assumptions and rationale underpinning the financial model As is the case with any financial projections, achievement of results is entirely dependent on the various explicit assumptions being fulfilled. Although the following assumptions have been compiled carefully and conscientiously, and with reference to extensive research and experience, there can be no guarantee that they will be fulfilled. Reference should also be made to the disclaimer in the appendices.
Operating Revenue and Cost Assumptions The main assumptions underlying these projections are as follows:
● Occupancy: Commencing at 40% in 2018 and rising to 65% by year 6. (Using Fáilte Ireland and industry average occupancy rates as a base). ● Average room rate: Commencing at €65 rising to €95 per room by year 6 (inclusive of VAT @ 9%). ● Repairs and maintenance: The property owners are responsible for the upkeep and maintenance of their individual properties. ● Professional fees: For auditing/accountancy and other professional services. ● Wages and salaries: Estimated at €50,000 and assumed to include a General Manager and part-time administrator. The project could also benefit from community employment (CE) scheme employees. ● Marketing: Based @ 4% of sales is the very minimum budget to gain national & international recognition for new tourist accommodation in Boyle. ● Overheads: Detailed in the P&L attached. ● Capital cost fit out – The administrative office would need to be fitted out in line with health and safety at work legislation, and with fit-for-purpose infrastructure such as IT, telephony and other such backup services. This is not modelled in the P&L as it is assumed to be a capital cost and funded from external sources, and as such should be costed separately. ● Overhead costs: assumed to cover building maintenance, energy, water & waste, insurance, cleaning, and security. ● Other operating costs: estimates based on the scale and type of activity. ● Depreciation: not part of this scope.
Visitor projections assumptions ● Visitor numbers to Boyle are based on achieving footfall in line with visitor arrivals to the region. ● Boyle has the potential to attract the Culturally Curious and Great Escaper segments and win back some of the market share it has lost to Carrick on Shannon in recent years.
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Property assumptions ● Properties will be refurbished to a high standard of decor and comfort to meet tourists’ exacting expectations and to meet the Fáilte Ireland Welcome Standard12. ● All properties will be repaired and maintained annually by the property owners to maintain high standards equivalent to 4* standard as expected by the customer. ● For the purpose of this study a unit is a double/twin room. ● Property owners will make their accommodation product available for bookings through a property management company, CRO Ltd., whereby this business entity markets and sells accommodation on behalf of the property owners in return for a consideration such as commission suggested around 40% of the sale, ex VAT. Essentially, the CRO would act as a centralised booking, sales, marketing and operations centre for an annual fixed fee in addition to commission charged per converted booking. ● A system of bednights distribution will need to be agreed with the property owners to avoid the ‘conflict’ referred to in the Friuli Venezia Giulia case-study. Service providers within the model will have to acknowledge the power of the customer in today’s world, who is at all times the ultimate arbiter of occupancy levels in accommodation worldwide.
Staffing Assumptions ● A General Manager (GM) is responsible for the smooth and professional operation of the Albergo Diffuso. Supported by operational and sales/marketing staff, the GM will ensure a seamless service between all components of the AD (reservations, reception, rooms, dining, concierge, cleaning, maintenance, security etc). ● Annual tourism and hospitality training will be undertaken by all staff involved in the project to ensure they deliver excellence in customer care.
The Wider Tourist Experience ● Local restaurants, cafes, gastro-pubs that wish to be part of the scattered accommodation experience commit to providing the visitor with an “on-demand” experience that is reflective of the 4* accommodation standard. ● Retailers and other businesses in the town deliver excellent customer service and act as champions for the town. ● Roscommon County Council commits to invest in public realm to ensure a quality visitor experience as guests walk from reception to their bedrooms and to common areas, within an accommodation model where “the streets are the hotel corridors”. ● In 2016, the four main visitor attractions (Lough Key Forest Park, Boyle Abbey, King House and Arigna Mining Experience) co-operated on a joint ticketing and cross promotion initiative. Although the summer season was well underway by the time the initiative was fully operational, feedback from the visitor attractions was positive. Underlining the potential impact of such co-operation, one of the sites stated that it “resulted in an increase of approximately 15% in visitor numbers”. This kind of ongoing cooperation would be critical for the Albergo Diffuso.
12 See appendices for details about the Fáilte Ireland Welcome Standard
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Target market assumptions ● The scattered accommodation model will target the Culturally Curious and Great Escaper and in keeping with international trends, these customers will be the ultimate arbiters of the model’s success. Drawing on peer reviews and referrals, customers will vote with their feet and if the quality and standards of the experience do not meet with their expectations and demands, projected sales will not be achieved.
Marketing assumptions ● Development of a comprehensive sales and marketing plan to launch, promote and deliver business into Boyle via a multitude of channels and to include: ○ Promotional material & collateral to be distributed to the market ○ Public relations strategy ○ Website and social media strategy ○ Engagement with Fáilte Ireland and Tourism Ireland marketing platforms ○ Networking with other tourism providers in the region ○ Engagement with travel trade ● Such promotional activity will be in place 9-12 months ahead of opening date.
● Communications programme with the local community to keep them informed of development plans and to secure their support for the project. ● An estimated 40% of sales will come through AD’s own channels; brand website for direct bookings and 60% from third parties such as Booking.com, Expedia, and other market leading sites.
● Consideration will be given to adopting the Albergo Diffuso ‘brand’ in naming the new product. This will be clarified with the Italian founder of the concept vis a vis naming rights.
Risk factors The development of a new accommodation offering carries significant risk, even when the CRO is operated with subvention and subsidies. The ramp-up time must be planned to achieve maximum possible occupancy as early as possible, however accommodation products generally take at least three years to gain traction in the market place. Since the Albergo Diffuso concept is completely new in Ireland, this adds a further level of risk and complexity and uncertainty around the projections. It is acknowledged also that the unique nature of the AD may help with publicity and generating awareness about the proposed new venture.
The following are major risk factors:
Planning permission: the proposed accommodation buildings could be listed and there could be some resistance to elements of the proposed works. Any planning application would be open to objection as part of planning process. Mitigation/avoidance: pre-planning consultations with the planning authority, and with other interested parties; conform with requirements of planning authority.
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Capital cost overrun: the CRO project may be under-budgeted at the outset through inadequate specification, which has to be remedied, or because of unforeseen factors such as problems with the site or existing buildings that were unknown at the time of costing. Mitigation/avoidance: completion of thorough structural, services and building fabric surveys; accurate design and specification; good project management, enabled by Roscommon County Council and Boyle Town Team project management team.
Product quality: If the building quality and accommodation fit-out do not meet required standards and consumer expectations, post-construction correction may be possible, but this will add to costs. Mitigation/avoidance: accurate specification, design and build quality and good project management.
Visitor numbers: it is impossible to predict visitor numbers to Boyle once the CRO is established – the margin of error is high. Advance market testing can increase the confidence in projections. However, the challenge with a new accommodation offering is that consumers cannot really test and assess the experience before it is available; up to that point, all that is available is imagery and text, which essentially force consumers to imagine a future experience. Mitigation/avoidance: Our sensitivity analysis shows that break-even on operating costs is reached at 1,737 unit rentals – before payments to property owners – (assuming 40 no. units are available for sale) at 60% occupancy in year 5. (After property owner payments are disbursed, breakeven number of rentals increases to 8,400 units). This equates to renting almost five units every night before rental payments to property owners (over 350 room nights) which would certainly be challenging in the shoulder season. (Note: this increases to a minimum of 24 rentals per night after payments to property owners).
Market conditions: the operating environment may change significantly between the date a decision is made to refurbish the accommodation and the date the doors open for business. The consequences of negative external developments such as economic recession or Brexit can be a failure to achieve visitor number and/or targets. Mitigation/avoidance: ensure quality of visitor experience; intensive pre-opening marketing; incentivise markets, reduce operating costs.
Operations: operational problems may arise in a number of areas including a failure to deliver a good visitor experience due to poor management and inadequate staff training, poor operating cost control, poor operating standards and unforeseen operating problems with the building, accommodation and/or other visitor facilities. Mitigation/avoidance: Appoint experienced management, ensure staff are well trained, and ensure that contractors, suppliers and maintenance personnel meet required standards.
Summary of the financial model The financial modelling demonstrates that the costs associated with the operational management of the Albergo Diffuso model in Boyle are significant, with an anticipated break-even point at a minimum of 24 rentals per night (8,400 divided by 350 nights) after payments to property owners.
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Stabilisation of a typical hotel can take three to five years and it is imperative that cashflow (not included in this scope) is controlled while working to establish the business.
The success of the model in the Italian context appears to vary according to factors such as the location, the governance model and public subsidies.
Cognisant of the financial risk, yet taking on board that the primary need in Boyle is to address the accommodation deficit, it is worth noting that there may be alternatives. Detailing such alternatives is outside the scope of this document, however, the following can give a flavour of such options.
5.7 Alternatives: ‘Residence Diffuso’ model
Residence Diffuso is a similar but alternative model outlined by Dall’Ara and is defined as a “Non-hotel reception structure providing accommodation in more than one residential unit. They are provided with reception and assistance services, located in one town and integrated by the centralised reception desk. It is a non-hotel reception structure characterised by a centralised booking system and by basic reception and assistance services”.
The core difference between this and the Albergo Diffuso is that the full services typically associated with a hotel are not offered with a corresponding reduction in costs of operation (e.g. no requirement for a GM, different guest expectations around dining experiences or other common spaces). Within this model, the refurbishment of the properties would naturally still be assumed and a CRO could offer support to the owners for bookings and concierge services.
Within this model, the property owners could pay a per usage fee to the CRO for services such as key collection and reception area provision. In this way the accommodation providers are responsible for the upkeep and maintenance of standards and marketing of their own properties, while using this management company as a central operational platform within the town on a pay for use basis only.
The CRO services could be supplemented by the property owners engaging with existing platforms such as Airbnb (www.airbnb.com), and the associated platforms such as Airhandy (www.airhandy.com) and Airsorted (www.airsorted.ie). This approach offers the opportunity to digitally market accommodation to a very wide audience on a commissionable basis. The digital disruption of service bookings continues apace, and this may be an easily implementable option available to accommodation providers and Boyle Town Team. Indeed, there are already a number of accommodation providers in the area utilising these platforms and the consultants are happy to provide further verbal information if required beyond the scope of this assignment.
If the CRO could attract state funding to supplement the “pay for use” model, it could provide an amenity for the town to facilitate accommodation bookings year-round to
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maintain a baseline level of service whilst being free from seasonal funding concerns. The remit of the CRO could also be extended to include marketing services on behalf of the property owners and the town in general. This kind of model has already been established in Ireland amongst tourism accommodation providers as outlined in the examples below:
Manor House Hotels
A comparable model within the Irish tourism landscape is Manor House Hotels. Manor House Hotels of Ireland was set up in 1986 by Bord Fáilte (now Fáilte Ireland) to market small independent luxury properties overseas. The company is a non-profit organisation owned by the member hotels; country houses, manor houses and castles.
A sister organisation, Irish Country Hotels was established in 1986 by the Irish Tourist Board to market small independent family run hotels overseas. The company is a non-profit organisation owned by the 26 member hotels.
In both cases the individual hotels pay a membership fee and own shares in the Manor House Hotel company (“The Company”). The Company markets all members of each group overseas with a particular focus on international tour operators. The Company contracts pricing with international trade buyers on behalf of the individual hotels and takes a commission on sales. It also manages a website on behalf of the members.
Each member also has a website for their own property and it is incumbent on members to optimise the potential for their respective businesses through their own sales and marketing activities. As one member noted “you get out of it what you put into it”.
Destination Westport
Another example relates to Destination Westport. The organisation was formed by the major tourism businesses in the town with a mission of ensuring that the town was promoted in Ireland and overseas. The success of Westport as a tourism destination is largely due to established partnership efforts between the businesses, the community and the public sector. It is founded on a principle of putting the destination ahead of individual operators with a view that a rising tide lifts all boats.
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6. Conclusions and recommended next steps
The Italian Albergo Model has attracted acclaim as a unique response to lack of accommodation in marginalised areas throughout Italy. The model offers a lifeline to towns and villages that have been abandoned, or are at risk of abandonment due to ongoing depopulation.
A review of EU funding that supported the development of the model in the Friuli Venezia Giulia region of Italy found that the AD model has had a positive socio-economic impact on marginalised towns and villages within that region. The review points to tourism growth, job creation and the rejuvenation of towns where the local populations have embraced the model as a means of boosting community spirit for the greater good.
The model however is not without challenges. Many Alberghi Diffusi13 in Italy are run by single entrepreneurs who have either renovated family properties or have renovated properties they have purchased within abandoned or near-abandoned hamlets. They run the business as any entrepreneur would a traditional hotel business answerable to just one paymaster and their customers.
Other models in Italy are operated through co-operatives where multiple buildings are made available by different property owners. This model appears to be more challenging with conflict arising between property owners about various aspects of the management of the Albergo Diffuso and the distribution of bednights amongst the property owners.
If Boyle were to progress with the idea as outlined in the preceding chapters, the town could certainly benefit from first mover advantage to optimise the novelty nature of the AD model. If successful, no doubt other towns and villages in Ireland would attempt to replicate the model and an ongoing challenge for Boyle will be to optimise that first mover advantage and consistently remain ahead of the curve in terms of innovation and service delivery.
Although in theory, the AD model is a simple concept, the practicalities of offering a consistently seamless tourist accommodation experience across a number of providers should not be underestimated. The focus of this report is on the development of an AD model for Boyle; whilst the overhead costs of the model indicate a major financial challenge, there is nothing to suggest that individual properties that have been refurbished and re-purposed could not successfully operate as tourist accommodation in their own right.
As is noted throughout this document, the tourism industry of today is one in which the customer truly is king, and the customer will be the ultimate determinant of the success or failure of any tourist accommodation.
13 Italian plural form of Albergo Diffuso
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6.1 Next steps
If Boyle Town Team decides to progress the idea to the next stage, the following actions should be undertaken by Boyle Town Team, the Local Authority and the property owners who have expressed an interest in the Albergo Diffuso project.
1. Review document taking full consideration of potential renovation costs for the properties themselves and for the estimated operational costs of the management company that will be required to oversee the Albergo Diffuso model. 2. Clarify levels of interest from property owners in the renovation of their properties against the backdrop of the report findings and identify other tourism service providers who are interested in being part of the project. 3. Develop a clear vision amongst the core stakeholder group interested in pursuing the idea and secure buy-in at all levels. 4. Approach central government to elaborate on the discussion around capital development funding and to clarify if such funding would take the form of grant aid or loan finance. 5. Approach other possible funders as outlined in the document to ensure all options are evaluated. 6. Liaise with Roscommon County Council regarding pre-planning discussions for the renovation of specific properties in the town. 7. Establish an exploratory fund with contributions from interested parties so that accurate estimates for property renovations can be obtained from construction professionals.
Both Italian AD experts Giancarlo Dall’Ara and Maurizio Droli are available and interested in visiting Ireland to meet with interested parties and present in more detail their experiences of AD models in operation in Italy. Both have said that in order to provide recommendations on the specifics for Boyle, they would prefer to see the town, walk the proposed route of the interested properties, see the properties themselves and evaluate the potential for hotel food and beverage services provided by local restaurants and cafés.
Both charge an approximate daily rate of €1,500 plus VAT and travel expenses.
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Appendices
● Documents reviewed
● Consultees
● Online survey findings
● Fáilte Ireland quality standards
● Fáilte Ireland Global Segmentation
Disclaimer
This report is strictly private and confidential and without prejudice is intended for the addressee only. It is not for circulation to third parties nor should its contents or financial projections be taken as certified. All assumptions are based on industry standards and norms. Valuations are purely theoretical and Bane Mullarkey Ltd. and Weldon Mather t/a WM Consultancy LTD accept no liability whatsoever for any recommendations or commentary enclosed herein. You are strongly advised to consult with your accountant, tax adviser and solicitor before making any final decisions.
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Documents reviewed:
Manuale dell’Albergo Diffuso, L’idea, la gestione, il marketing dell’ospitalita’ diffusa, Giancarlo Dall’Ara
Albergo Diffuso as a model of original hospitality and sustainable development of small
historical villages, Firenze University Press, 2015; T. Villani, G. Dall’Ara
Albergo Diffuso, Developing Tourism Through Innovation and Tradition, Business Innovation Centre, Lazio
Valutazione Tematica N. 10, Gli effetti socio-economici della modalità dell’Albergo Diffuso Dicembre 2015 (Evaluation of EU support on the socio-economic effects of the Albergo Diffuso model in Friuli Venezia Giulia, December 2015)
Boyle Local Area Plan 2015-2021
County Roscommon Local Economic and Community Plan 2016-2021
County Roscommon Tourism Statement of Strategy and Work Programme 2017-2022
Wider Benefits of Tourist Accommodation, Fáilte Ireland 2016
People, Place and Policy – Growing Tourism to 2025 (National policy and action plan)
Tourism Ireland Corporate Plan and Marketing Plans
Fáilte Ireland Global Segmentation Study, 2014
Fáilte Ireland Hotel Classification Matrix, March 2017
Consultees
Aisling Dineen, Roscommon LEADER Partnership, Rural Recreation Development Officer
Alan O’Connell, Roscommon County Council, Executive Planner
Bodo Funke, Boyle Chamber of Commerce and Angling Tourism Operator
Brian Farragher, Roscommon County Council, Planning & Building Control
Brian Nerney, Boyle Town Team, Chair
Claire Carty, ROSCOMMON Leader Partnership, Project Officer
Colm Kelly, Roscommon County Council, Community & Enterprise, Boyle Town Team Liaison
Dara O’Callaghan, Boyle Chamber of Commerce
Emer Dowd, Roscommon County Council, Tourism Officer
Emmet Humphreys, Roscommon County Council, Planning & Building Control
Fiona Monaghan, Fáilte Ireland, Former Head of Wild Atlantic Way
Geraldine McLoughlin, Western Development Commission, Investment Team
Gerry Kielty, Boyle Arts Festival, Chairman
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Giancarlo Dall’Ara, Originator of Albergo Diffuso model and founder of Associazione Nazionale Alberghi Diffusi
Gretta Byrne, OPW, Boyle Abbey
John Mulligan, Author and Journalist
Linda Campbell, Fáilte Ireland, Head of Standards and Quality Assurance
Margaret Mulligan, Boyle Town Team, Albergo Diffuso Sub-Committee
Martin Lydon, Roscommon County Council, Director of Services Planning and Enterprise
Mary Mullins, Roscommon County Council, Arts Officer (Ref. King House)
Maurizio Droli, Lecturer at the University of Udine and founder of International School Specialising in the Albergo Diffuso (SISAD)
Michelle Coghlan, GM Kilronan Castle Hotel
Patricia Golden, Úna Bhán, Manager and Boyle Town Team
Sinead Devine, Boyle Town Team
Trevor Conroy, Boyle Town Team
Úna Doris, Tourism Officer Westmeath (formerly Roscommon LEADER Partnership)
Valerie Stetson, Arigna Mining Experience
Property Owners
Alison Clarke O’Shaughnessy, also on Boyle Town Team
Barry Lynch
David & Fiona Lavin
Frank Muldoon
Gerard Sheerin
James Candon
Mary McGee
Mervyn Boles, also on Boyle Town Team
Peter & Karen Byrne
Tom Cunningham
Cafés and bars
Clarkes
Creightons Bar
Daly’s Storehouse
Drumanilra Farm Kitchen
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King House Tea Rooms
Margaret’s Café
Mattimoes Bar
The Bazaar
The Moylurg Inn
The Open Table
Whistlers Bar & Grill
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Online survey findings
The online survey was completed by 312 people; local people involved in tourism, local people with no involvement in tourism and visitors to Boyle:
Respondent profile % of respondents
Own or work in a tourism-related business in or near Boyle 16%
Live in Boyle but not directly involved in tourism 42%
Visited Boyle / Co Roscommon as a tourist or for festival/event 41%
A selection of comments on an Albergo Diffuso for Boyle
● “Boyle needs two things, a proper modern hotel and a factory to offer decent paid jobs to skilled and semi-skilled people. Money should stop being wasted on exploring this scattered idea.” ● “A great concept to boost economic fortunes of Boyle. It will incentivise property owners to redevelop existing underused / non-used buildings into high quality accommodation. It will bring life back into the town centre during the week and at nighttime. Historically, business owners lived over their premises with their families. This gave a vibrancy to the town centre that no longer exists. The tourists staying in the scattered hotels will be free to visit local restaurants and bars which will provide further revenue for these businesses. In addition, tourists staying overnight will spend more in local shops and businesses. As an added bonus, the work required to upgrade the buildings will provide employment for those involved in the building trade and increase revenue of suppliers of building materials and homewares. Finally, the renovation and redecoration of buildings as part of the scattered hotel concept will greatly enhance the visual amenity of the streetscapes of Boyle. This would be a hugely positive step for Boyle, a good news story which we need after years of negative events and decline of the town’s fortunes.” ● “It would need to be finished, managed and cleaned to an excellent standard to that of a 4* Star Hotel. It is a fantastic idea but needs to be attractively priced. Most of all it needs to be advertised …” ● “Boyle needs a hotel a proper hotel” ● “Boyle needs a hotel with a function room to draw the tourists back into Boyle.” ● “before developing the scattered hotel. develop the amenities of the area. fishing is overlook but boyle has one of the best rivers running through it. also the canal if they were fishing stands disable anglers would come or you have Lough key and Lough Tara …” ● “Best of luck its a great idea” ● “Boyle businesses need to do more to work together rather than compete with one another. They must do this before the idea of a scattered hotel will work in the town.” ● “This concept is why Boyle will never succeed. The town team don’t understand the town, don’t care about anything other than themselves and don’t operate as a unit. This is not a practical approach to the issues in the town surrounding the hotel. It appears as a publicly broadcast feud fuelled to go against the majority of the town’s wishes for personal point scoring.”
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● “In my opinion the idea of scattered accommodation would be more appealing if it was based on an air bnb concept – that the individual locations would have more self catering facilities and could be linked in with local restaurants already established such as Drumanilra and the Bazaar etc where meals could be included within the booking price.” ● “It would not solve the problem of a lack of a function room to cater for large groups. Coach tours, Weddings, Funeral parties, etc. Competition within vested interests of property owners may make it unworkable.” ● “A great concept to boost economic fortunes of Boyle. It will incentivise property owners to redevelop existing underused/non-used buildings into high quality accommodation. It will bring life back into the town centre during the week and at night time…” ● “There is no getting away from the fact that the town lacks a good quality hotel, while Carrick on Shannon has plenty. Why the powers that be refuse to see that this is the problem – not weird scattered accommodation – is beyond me.” ● “People want a proper hotel, where they can have fun and drinks together at the end of a day especially if there is a big group, going in and out of each other’s rooms, not having to leave in all kinds of weather to go to a different place, and leave again to get food.” ● “A dying town in a cold, wet windy country doesn’t really scream “come stay here”. There’s no way near enough to do to justify anything more than an hour in that town, we collected family and went to lough key, which was closed and then gave up on Boyle altogether and went to carrick on Shannon, somewhere Boyle could really start taking direction from. Lively little town with lots of hotel, self catering and b&b accommodation. There’s nice little shops and the walk down the town was nice and pretty and not full of empty spaces. It comes across as a town that’s loved. Boyle, not so much.” ● “There is no getting away from the fact that the town lacks a good quality hotel, while Carrick on Shannon has plenty. Why the powers that be refuse to see that this is the problem – not weird scattered accommodation – is beyond me.” ● “This is the most ludicrous idea ever! Boyle is not comparable to a historic Italian town … it’s wet, cold and miserable … You seem to be pushing what is effectively Air BnB but with less organisation and probably more expensive. A hotel is more than a place to sleep …” ● “Great idea for Boyle & it would be a fantastic asset” ● “Hotel required with proper facilities”
Pre-Development Study for an Albergo Diffuso in Boyle
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Top five tourism assets in Boyle
1. Lough Key Forest Park 2. King House 3. Boyle Abbey 4. Boyle Arts Festival 5. Three main clusters emerged as the fifth top tourism asset: a. Fishing/river/canal b. The town itself (shopping, facilities, friendly people, restaurants) a. Links with Moone Boy/other famous people
Typical length of visit
Duration %
1-2 hours 21%
Day trip 39%
1 night 13%
2-3 nights 21%
4+ nights 6%
Purpose of visit
Purpose %
To visit Lough Key Forest Park 84%
To visit cultural attractions such as King House, Boyle Abbey etc. 57%
To visit friends/relatives 48%
To attend Boyle Arts Festival/other festival/event 56%
To attend a family event (e.g. wedding) 31%
On business 6%
Other 8%
Pre-Development Study for an Albergo Diffuso in Boyle
49