Business innovations for ‘community-based tourism’ development in rural areas: “the case of ‘Albergo Diffuso’”

January 13th 2015
Maurizio Droli
International School Specializing in the Albergo Diffuso
Associazione nazionale Alberghi Diffusi
© Maurizio Droli, 2015, maurizio.droli@uniud.it
Business innovations for
‘community-based tourism’
development in rural areas: “the
case of ‘Albergo Diffuso’”
Faculty of Tourism and
Hospitality Management
Opatija, Hrvatska- Croatia

A premise: “community-based” tourism (C-BT) is
• a form of tourism which aims at include and
benefit local communities, particularly
indigenous peoples and villagers in the rural
areas. For instance, villagers might host
tourists in their village, managing the scheme
communally and sharing the profits.
18/04/2018 M. Droli, 2013 – maurizio.droli@uniud.it 2
www.tourismconcern.org

• There are many types of community tourism
project, including many in which the
‘community’ works with a commercial tour
operator, but all community tourism projects
should give local people a fair share of the
benefits/profits and a say in deciding how
incoming tourism is managed.
A premise: “community-based” tourism (C-BT) is

Community-based tourism should:
• Be run with the involvement and consent of
local communities. (Local people should
participate in planning and managing the
tour.)
• Give a fair share of profits back to the local
community.(Ideally this will include
community projects (health, schools, etc).)
• Involve communities rather than
individuals. (Working with individuals can
disrupt social structures.)18/04/2018 M. Droli, 2013 – maurizio.droli@uniud.it 4

• Be environmentally sustainable. (Local people
must be involved if conservation projects are
to succeed.)
• Respect traditional culture and social
structures.
• Have mechanisms to help communities cope
with the impact of tourists.
• Keep groups small to minimize cultural /
environmental impact.

• Brief tourists before the trip on appropriate
behaviour.
• Not make local people perform inappropriate
ceremonies, etc.
• Leave communities alone if they don’t want
tourism. (People should have the right to say
‘no’ to tourism.)

Distinguishing characteristics of C-BT:
• A community by definition implies individuals
with some kind of collective responsibility,
and the ability to make decisions by
representative bodies.
• Community based tourism is tourism in which
local residents (often rural, poor and
economically marginalised) invite tourists to
visit their communities with the provision of
overnight accommodation.

• The residents earn income as land managers,
entrepreneurs, service and produce providers,
and employees. At least part of the tourist
income is set aside for projects which provide
benefits to the community as a whole.
• Community based tourism enables the tourist
to discover local habitats and wildlife, and
celebrates and respects traditional cultures,
rituals and wisdom.

• The community will be aware of the
commercial and social value placed on their
natural and cultural heritage through tourism,
and this will foster community based
conservation of these resources.
• The tourist accommodation and facilities will
be of sufficient standard for visitors, albeit
those expecting simple rural accommodation.

• The community will be required to have
continuous access to a phone (which might be
required for medical assistance) and daily
access to email (which will be required by
operators to confirm bookings).
• The community may choose to partner with a
private sector partner to provide capital,
clients, marketing, tourist accommodation or
other expertise.

• Subject to agreement to the ideals of
supporting community development and
conservation, and to planning the tourism
development in partnership with the
community, this partner may or may not own
part of the tourism enterprise.

How do we evolve community-
based tourism principles into
community-based tourism
business innovations?
The “Albergo Diffuso” (litterally
translated in “scattered hotel”)
A brief description of the innovation

The “Albergo Diffuso”
The Albergo Diffuso (AD) was nominated ‘Best Practice for Growth’ by
the European Business & Innovation Centre Network - EBN and United
Nations Development Programme - UNDP. They were both rewarded in
the international EBN-UNDP context on 27th June 2008 in Budapest,
Hungary.

• If considered under a general
viewpoint, an “Albergo Diffuso” is
substantially three things:
1. an original model of hospitality
2. a coherent business model
3. a community-based development
process
14

process
15

– www.vecchioconvento.it www.borgodeicorsi.it
– www.borgodioria.it www.barbierigroup.it
– www.casaoliva.it www.montignano.it
– www.duecampanili.it www.ilborgodisempronio.it
– www.lacasella.it www.albergodiffusogalatea.com
– www.albergodiffusocastro.it www.laloggiagradara.it
– www.agriturismolasorgente.it www.borghidibasilicata.eu
– www.locandalfieri.com www.locandasenio.it
– www.malvarina.it www.omuaxiu.it
– www.jelsi.too.it www.lapianadeimulini.it
– www.residenzasveva.com www.albergodiffusosettelune.it
– www.sextantio.it www.albergodiffusosmerillo.com
www.sottolecummerse.it www.trulliholiday.com
– www.trullidea.it www.urbinoresort.com
– www.valdikam.it www.vecchiamottola.com
– www.ilborgoritrovato.com www.lecostellazioni.eu
– www.villaretrosi.it ecc., ecc., ecc.
18/04/2018 17
What are we talking about?
A few examples
To visit more structures: www.alberghidiffusi.it

An example:
– «The abandoned ancient buildings of a
single hamlet are restored, one building
is selected to house the common
reception area - this is the formula for
“horizontal“ hospitality, better known
as Albergo Diffuso»*.
Some media describe the Albergo
Diffuso in a superficial way
* Quoted from Isabella Fantigrossi,in: "Albergo diffuso, when the whole village
is transformed into a hotel", 17 October 2011, tg24, can be downloaded from:
http://tg24.sky.it/tg24/eco_style/2011/10/17/albergo_diffuso_turismo_sosteni
bile.html
18

Others use partly correct and partly
misleading definitions
An example:
– «Albergo diffuso translates literally as
“scattered hotel.” The principle is that
rooms, decorated in a consistently
authentic and local style, are scattered
throughout different buildings within the
town but overseen by one manager. A
traditional breakfast might be served at a
local cafe or in the kitchen of one of the
local houses, or delivered to your room.
Call it a B & B village».
New York Times, May 19, 2010, By Gisela Williams, retrieved by:
http://www.nytimes.com/2010/05/23/travel/23journeys.html?pagewanted=all
&_r=0 . A version of this article appeared in print on May 23, 2010, on page
TR10 of the New York edition with the headline: Saving Towns by Filling Rooms.
Other examples:
(1); (n) 19

An example:
– «Albergo Diffuso: two words conceiling
the complexity of a project, an
aspiration towards a new concept of
tourism and hospitality, a concept that
entails regeneration of the old town
centres».
Others offer a more in-depth description
This is Stella Teodonio, quoted from: “In Vacanza ... a Casa”, Monthly magazine of the
XIII and XVIII Comunità Montana dei Monti Lepini, N.6, June 2006, Rome.
20

• What range of services is offered to
the guests?
• What problems can it solve for its
guests?
• What value is created for the guests?
• In short: what is the Albergo Diffuso?
18/04/2018 21
Overview of the Albergo Diffuso

• The “Albergo Diffuso” (AD), litterally
translated “Scattered Hotel” is an
Italian innovation in response to the
1976 earthquake which occurred in
the Friuli Venezia Giulia Region
• A hotel which offers to their guests a
unique experience of living a
historical centre / rural village
Overview of the Albergo Diffuso: general
characteristics of the hospitality model*
(*: Dall’Ara, Dichter,
UNDP brochure,
2008)

• it provides all the services of
traditional hotels
• the rooms are scattered inside the
village and /or around old town
centre
23
UNDP brochure,
2008)

• it provides the sensation of “being
local”
• guests are not traditional visitors or
tourists, but “temporary residents”
• it responds to the demand attracted
more by the uniqueness of the
places than by the existing
international quality standards
UNDP brochure,
2008)

1. not development projects, but
business opportunities and
(perhaps) a business
2. services up to Hotel standards
3. unitary management
4. rooms (located in flats, semi-
detached houses, etc.) are
scattered in no less than two
separate and pre-exisiting buildings
25
A closer look at the Albergo Diffuso
(the hospitality model 10 key-features)
UNDP brochure,
2008)

5. “reasonable” distance between
units and the reception (300 metres
maximum)
6. shared services (e.g. catering)
7. lively community (not empty villages)
8. typical environment
9. distinguishable features
10.management style always fitting
the territory and its culture
26
A closer look at the Albergo Diffuso
(the hospitality model 10 key-features)
UNDP brochure,
2008)

– accomodation
– breakfast service
– restaurant service
– catering
– bed-linen
– room & house cleaning
– assistance to the guests minimum 12
hours a day
– telephone assistance during the daytime
– assistance during the nightime (emergences)
The basic (hotel) services offered
UNDP brochure,
2008)

• Where did … come from?
– the name: the region of Friuli Venezia
Giulia, in north-eastern Italy (1982)
– the original hospitality model:
Giancarlo Dall’Ara, 1989
– the first complete project: San Leo,
Pesaro-Urbino (central Italy), 1989
– the first national convention:
Campobasso, Region Molise, 1998
– official national acknowledgment:
Code of Tourism, 5 May 2011
28
The hospitality model called Albergo
Diffuso: Its ‘brief’ history

• An Albergo Diffuso uses entire
homes rather than just “rooms with
en suite bathroom”
• homes are scattered across the old
town centre
• cleaning is more expensive and takes
longer
• there are higher costs for heating in
winter and air conditioning in
summer respect traditional hotels18/04/2018
Every rose has its own thorns.
What about the Weaknesses?

• a strong appeal toward the media
and tourist markets
• it creates a new hotel without new
buildings, using un- or under-utilised
dwellings
• an original model of hotel hospitality
• a model that can be exported to the
entire Mediterranean basin with no-
or a few structural adaptations
18/04/2018 30
... Strengths ...

• Abused defintions of AD
– especially noticeable in a few italian
regions, where homes are networked
using the brand-name of “Albergo
Diffuso”, but hotel standard is not yet
achieved
• Private businesses speculating
• Public bodies speculating
• Assistentialism (Friuli Venezia Giulia)18/04/2018 31
(*Droli, Dall’Ara, 2012)
... Threats* ...

«Designed and managed as an
integrated planning project, it had
greater success at attracting public
funds and developing a significant
hospitality sector, even where none
existed, than …
(Source: Leonardo Zanier, quoted from an e-mail sent to M. Droli on 11
October 2009. Forthcoming. )
An example: The AD in
Friuli Venezia Giulia
32

«… at interconnecting with the other
production sectors: farming, crafts,
education (with a few exceptions),
natural resources and local
development, restoration of the old
rural ways (partly achieved), etc. All
these areas are “monitored" but
when they move, they do so
separately».
(Source: Leonardo Zanier, quoted from an e-mail sent to M. Droli on
11 October 2009. Forthcoming)
33
An example: The AD in
Friuli Venezia Giulia

• It enhances the value of private
goods(homes, people, businesses,
local skills, products etc.)
• It enhances the value of tangible and
intangible resources (tourist and
general infrastructure, natural
resources, history, local culture, etc.)
• Transforms an old town centre, a
hamlet and a rural area into an ideal
holiday spot and a good place to live
all year round 34
Opportunities

• Inclusive opportunities for the local
community:
– Global Tourism Award 2010, London,
World Travel Market
• for Giancarlo Dall’Ara, President of ADI
• Innovation:
– 2008, Best Ideas, Budapest, EBN-UNDP
• For the hospitality model and related
actions as developed by G. Dall’Ara
Research Staff: (M. Droli, G. Dichter)
18/04/2018
The original hospitality model:
International awards (a selection)
EBN - European Business & Innovation Centre Network
UNDP - United Nations Development Programme

• Albergo Diffuso projects: 300
• “self–defined” alberghi diffusi:
less than 100
• Registered ADs to date (ADI): 60
With so many projects, why so few ADs?
A few figures (2011):
36

• Albergo Diffuso projects: ?
• “self – defined” alberghi diffusi ?
• Registered ADs (ADI): 70 apprx
The growth rate of these projects is so
fast that it is difficult to monitor all AD’s
projects and self-defined ADs (source:
Google)
A few figures (2012):
37

18/04/2018 38
… where can you find ADs?
Source: GDA.

18/04/2018 39
Source: GDA.

18/04/2018 40
Source: GDA.

«From 1945 to date, the number of
rooms in Italy has grown from nearly
30 million to 120 million: the
housing stock has quadrupled. It is
true that Italy had a demographic
boom after the wars (and not just
Italy) but Italy is hugely over-
urbanised with at least 20 million
empty rooms»*.
Potential?
*Quoted from Aldo Loris Rossi, Professor of Architectural Planning, Università di
Napoli, and President of the National Association of Architects, 2008.
41

Poor.
there are no joint public-
private plans to facilitate the
development of innovations
across large territories,
whether regional or national.
What are the prospects for a rapid
development of this innovation in Italy?
42

Poor.
A few regions where the
existence of ADs firms is literally
dependent on public funds
candidate themselves as models
to imitate (E.g. Friuli Venezia
Giulia)
What are the prospects for a coherent
development of this innovation abroad?
43

• a novelty is created that responds to
market demand
• business improves (turnover)
• average operating costs for the
rooms are reduced
• …
What advantages derive from strictly following
this hospitality model?
44

Old town centres, hamlets and
small rural economies have
been in existence for
centuries. They are not new.
They were ‘simply’ missing an
engine to drive their revival:
this is the AD and its industry.
18/04/2018 45
What advantages derive from strictly following
this hospitality model: a summary

process
46

2. The Albergo Diffuso as a
business model
Key actions
Revenue streamsCost centres
Resources
Top clients
47

business model
Key actions
Resources
Top clients
48

Top clients
• generally:
– Who do the ADs work for?
– Who are their most “attractive”
clients?
– Who do they create value for?
18/04/2018 49

Generally speaking, AD guests are more:
• self organised
• interested in experiencing local
culture
• attracted by non-famous new
destinations, with a sufficiently
appealing identity
• ‘post-industrial’ (Fabris, 2003)
• ‘permeable’ (Canestrini, 2004)
• ‘third generation’ (Dall’Ara, 2005)
18/04/2018 50

This new type of tourist demands more
from operators:
• achieve and surpass standards
• create a uniqueness that has
value for those “ from the
outside looking in”
18/04/2018 51

• reasons for travelling*
– relaxing 47-60%
– outdoor sports 8-12%
– visiting friends/rel.ves 8-10%
– events 7-10%
– day trips in the area 6-9%
18/04/2018 52
“slowing down”
space, being
outdoors
blending with the
locals
finding each
other again
finding new
places
(* Source: International Specialist School of Albergo
Diffuso (www.sisad.it). Survey date 2004-2008, area:
FVG, sample: 364 respondents).
A top clients’ profile

• In short: what do advantages stem
from managing these clients?
– entry into niche and “new luxury”
markets
– long term relations with travel agents,
tour-ops and final clients
18/04/2018 53
Top clients

business model
Key actions
Resources
Top clients
54

Key actions
In general:
• what activities enable the supply of
these services?
• what are the key relations with clients?
• what distribution channels are the most
important?
55

Key actions
Actions:
• sell the hamlet as a “tourist product”
(hospitality + catering + complementary
activities + local products + transport, etc.)
• facilitate the develpment of novelties
• offer revenue opportunities to young
people, businesses, people with specific
skills, …
• develop static and dynamic packaging
• contribute to the safeguard of natural and
historical resources
56

Key actions
Distribution channel management:
very wide differences across
businesses
• indirect sales (through agencies and tour ops)*
20-100%
• direct sales (straight to the final client)*
50-80%
• non tourist sales (variation)
+/++/+++
* estimated values
57

Key actions
Relationship management:
• guest satisfaction and loyalty,
expenditure by guests, home owners,
residents
• mutual curiosity
• mutual respect
• common responsibility towards shared
resources and community
• CRS
58

Key actions
In short: what advantages do these
activities bring?
• moving from resources to products
• joint promotion (and sales)
• problem-solving
• platforms/network/partnership
• … 59

business model
Key actions
Resources
Top clients
60

Revenue streams
• In general:
– how much is an AD worth and how
stable is its main source of income?
– what services and products are guests
paying for?
– what services are guests not paying
for but are willing to pay?
61

Rooms revenue/N. of
rooms
Total room sales
Potential room sales
(REvPAR)
Gross sales/N. of rooms
Total sales including catering and other
services, after taxes and discounts/ N.
available beds
(GOPPAR)
62
Revenue streams
• sources of revenue: two indicators

0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
Eur
Vendite effettive (€) Mancate vendite (€) Vendite potenziali (€)
• room only, actual and missed sales
by month
(*: Source: SISAD,
average data for 3 ADs
with a minimum fee
of 25 euros per night
per person.
Revenue streams
63

Visibility of the AD- local
area
Commercial value of the free publishing
services (articles) from the press, radio
and media in general;
Reduced purchasing costs
for shared goods and
services
Value of savings on all production factors
(except water and energy)
More “zero miles” services
Value of services and/or products
sold/booked by the AD
Savings on water and
electricity charges
Value of savings in terms of operating
costs
Revenue streams
• smaller outgoings for the community
64

Revenue streams
• In short: what are the advantages
for businesses and the community
from optimising these flows?
‒ stabilize sales of existing services
‒ increased sales for low and end of
season
‒ increased revenue per unit of product
(not hospitality)
65

business model
Key actions
Resources
Top clients
66

• In general:
– what are the diseconomies compared
to a traditional hotel?
– what are the largest expenditure items
for an Albergo Diffuso?
– what are the most expensive
resources?
– is the AD “cost driven”?
Cost centres
67

• Diseconomies (reasons why the
Albergo Diffuso should be managed
differently from a traditional hotel)
– greater operating costs: heating,
electricity, …
– maintenance: both daily care and one-
off repairs
– staff having to move around the village
Cost centres
68

• cost structure and typical costs
(*: Source: SISAD, 2009)
Cost centres
ITEM
% of total annual
costs (M3-FVG)
Staff/personnel costs 33,60%
Advertising and promotions 21,70%
Other costs (third party services) 11,50%
Accounting 7,70%
Cleaning and laundry services 6,90%
Telephone 5,20%
Purchases (home and office equipment) 4,10%
Consultants 3,90%
Stationery 2,50%
Professional fees 2,50%
69

• cost structure:
Cost centres
ITEM
% of total
annual costs
(M3-FVG)
Insurance 2,00%
Maintenance (incl. gardening and grass
cutting) 1,50%
Trade association fees 1,20%
Postage 0,90%
Entertainment 0,70%
Outsourced catering 0,00%
Intermediaries 0,00%
Miscellaneous energy 0,00%
Members fees 0,00%
Electricity 0,00%
Gas 0,00%
Etc.
(*: Source: SISAD, 2009)
70

In short: what advantages can a
balanced cost structure bring to the
AD management, its members and
the local community?
• more stable final price structure,
greater range, more all-inclusive
packages
• easy-to-compute variable prices
(dynamic packages), etc.
Cost centres
71

business model
Key actions
Resources
Top clients
72

Resources
• In general:
– what resources are needed by THIS
hospitality model?
– what resources, among many, are
crucial for revenue in the short term?
(to start)
– what resources should be considered
strategic? (to stay in the market)18/04/2018 73

Resources
• The “countryside”*
18/04/2018
(* Garrod et
al., 2006)
Elements of the countryside
Sea, mountain or hill landscape ,,,
Nature (wildlife), animal and plant species
Biodiversity
Geology and morphology
Air quality
Natural and traditional borders in farmed land
Rural buildings
Rural villages and markets
Historical buildings, industrial architecture...
Pathways, signposted walkways, private rural ways, ...
Wetlands, rivers, lakes
Air and water quality
Woodlands and forests
Local traditions, dialects, cuisine, crafts, festivals and lifestyles
74

Resources
• features of “rural” villages
(mountain, seaside, hillcountry, …):
‘the luxuries of our time’*
breathing
clean air (or
not too
polluted)
“slow” pace
of life
safety
relationships,
being together
authenticity free space
around you
18/04/2018
(* Enzensberger, 1999;
De Masi, 2004)
75

Resources
• RURAL RESOURCES. Take
‘relationships and being together’:
rural villages are often very small.
What are the advantages?
 RELATIONSHIPS AND BEING TOGETHER:
(*ISTAT, 2008)
I.E.: “Meeting your friends every day”
(respondents aged 6+)
up to 2.000 inhabitants 27%
up to 2-10.000 inhabitants 24,2%
up to 10-50.000 inhabitants 23,9%
metropolitan areas: 16,1%18/04/2018 76

Resources
• SKILLS: according to CNEL:*
“the skills required for these new
forms of hospitality are mainly
managerial and require higher
education, graduate and post-
graduate qualifications”.
(*: CNEL Report for the Conference of Italian Tourism, Genoa, 20-21
September 2004)
77

Resources
18/04/2018
• FINANCING business creation and
consolidation:
 work and training:
 EU structural funds ESF and ERDF
 investments for existing businesses:
 CIP / JEREMIE
78

Resources
18/04/2018
• FINANCING: LEADER programmes
for rural development and the key
role of Local Action Groups
• Other tools
• National
• Regional
79

Resources
18/04/2018
• FINANCING public bodies for
projects impacting “wide areas”:
 South-East Europe – SEE
 Adriatic – IPA
 Europe in the Mediterranean – MED
 Interreg IVC:
 Horizon 2020
80

Resources
18/04/2018
• FINANCING: a common trend:
 Innovative content, rigorous
management, results and
accountability are increasingly required
by the various financing bodies
 public financing is considered “a
complement” to private funds. No
longer the other way around
81

Resources
• In short: what are the potential
advantages of adequately
enhancing these and other
resources?
– real estate development
– financial development
– jobs and economic development
– sustainable development
– sustainable, long term competitive
advantage 82

process
83

3. The AD as a community-based
development process
84

The most important partners
In general:
• who are the suppliers?
• which businesses, associations, public bodies work with
the AD?
• who is in the unit that manages the Albergo Diffuso?
85

• The Albergo Diffuso usually acts as the most
relevant stakeholder on the territory
• It stimulates local actors (both public and private)
to re-think their development strategies:
 It stimulates the local existing and potential
entrepreneur in creating new businesses in the tourist
sector
 It helps local authorities to re-think development
strategies because it “re-positions” the area on the
national and international tourist markets
A partnership-based model for tourist
development of the territories
18/04/2018 86

Which problem does it solve and how?
18/04/2018
• It generates a high quality tourist product, expression of
local areas and territories without generating negative
environmental impacts
• It helps to develop and network the local tourist supply
• It increases sustainable tourist development in internal
areas, in villages and hamlets and in historical centers, in
the off-beaten tracks areas increasing the supply in the
tourist market
• In contributes to stop the abandoning of the historical
centers
• It promotes participation within the local communities
87

How? by creating trade contacts between
guests and local resource managers (B2C)
and among managers (B2B)
HETEROGENOUS
RARE RESOURCES
FOR GUESTS
18/04/2018 88
HETEROGENO
US AND RARE
RESOURCES
FOR GUESTS
18/04/2018
(* Droli, 2009)

Local
authoritiesEvent organisers
2
Catering
staff
4
5
HOTEL
owners of the AD
rooms
3
GLOBAL
MARKET
1
Stakeholders and main coopetitors
HETEROGENO
US AND RARE
RESOURCES
FOR GUESTS
18/04/2018
(* Droli, 2009)
89

Local
Farmers
artisans
small retailers
2
7
Catering
staff
4
5
HOTEL
8
Owners of the AD
rooms
3
GLOBAL
MARKET
1
Traditional businesses (non turist)
HETEROGENO
US AND RARE
RESOURCES
FOR GUESTS
18/04/2018
(* Droli, 2009)
90

Guides and local
experts
Local
farmers
artisans
small retailers
2
7
Catering
staff
4
5
HOTEL
9
8
owners of AD
rooms
3
GLOBAL
MARKET
1
Students researching
local resources
Sport instructors
People with specific competences and
useful skills
HETEROGENO
US AND RARE
RESOURCES
FOR GUESTS
18/04/2018
(* Droli, 2009)
91

Guides and local
experts
sports instructors
Students researching
local resources
Tour-operator, Agenzie
d’incoming, Network di
agenzie, Bus-operator, .…
Park managers,
Universities, LAGs
Business incubators, ...
Local
farmers
artisans
small retailers
2
7
DMO, SMEs consortiums,
market clubs, product clubs,
international circuits, ...
Catering staff
4
5
HOTEL
6
9
10
8
owners of AD
rooms
3
Facilitators
GLOBAL
MARKET
1
Nature parks, wider institutions and
commercial intermediaries
18/04/2018
(* Droli, 2009)
HETEROGENO
US AND RARE
RESOURCES
FOR GUESTS
92

In short, what are the advantages of full
development and productive
management of these partners?
• economies of scale
• revenue optimisation
• new sources of revenue
• reduced risk
• enhanced resources
• other…
93

Why partnering: Marketing
• Improve destination image
• Improve marketing efficiency
• Improve market coverage and reach
• Provide support for electronic marketing and
distribution, including Internet
• Provide support for participation at trade shows
• Harness power of co-op marketing programmes
• Access new markets
• Etc.
94

Why partnering: Products
• Enhance and preserve resources
• Set quality standards
• Develop attractions, theme parks and accommodation
• Provide technical support for innovative product
development programs
• Contribute to the economic wealth of the community
• Create sustainable development of tourism sector
• Overcome trade and investment barriers
• Protect consumers
• Deal with competition
• Etc.
95

Why partnering: infrastructure
• Improve roads, transport infrastructure and
basic services
• Provide impetus for intermodal transportation
• Improve public health and sanitation
• Improve safety and security
• Enhance telecommunications system
• Etc.
96

Why partnering: Research and Technology
• Provide research and measurement
methodologies
• Implement Tourism Satellite Accounts
• Enhance technological innovation and
application
• Etc.
97

Why partnering: Human resources
• Set service and quality standards
• Provide training and education programs
• Improve productivity and innovation
• Etc.
98

Why partnering: Financing
• Obtain investment and funding
• Leverage public investment
• Obtain start-up financing
• Improve yield
• Etc.
99

Why partnering: the Environment
• Preserving resources e.g. natural, cultural,
historical, etc.
• Sensitizing potential customers (e.g. students,
employees, firm’s managers, etc.) about the
importance of specific resources
• Recreating wilderness in environmentally
compromised areas (“greening”)
• Etc.
100

The dilemma
• Within public-private partnering processes:
– managers cannot leverage their authority
– no one can be fired by any other
– the willingness of the public decision makers and/or
firms’ managers:
• to participate or not in the PPP
• to pay or not for it
• how much to pay, etc.
cannot be given as certain.
• Starting from this assumptions, how is it possible to
increase the productivity (Cost/Result ratio) of these
processes? 101

What are the outcomes? How sustainable are
both innovation and partnership?
18/04/2018
• Environmental sustainability – nothing new has to be built
• Institutional sustainability – local actors must agree upon
the proposed development model
• Social sustainability - it mainly applies to areas which are
considered marginal, usually out of the ordinary
development schemes and models, off the beaten track
• Economic Sustainability – it is a market driven model of
hospitality which works where there is a specific demand
102

An AD partnership is usually created if the
following conditions are met
18/04/2018
• There is a reasonable number of rooms (min. 7) located at
a reasonable distance from each other (approx. 200 m),
that can be made available to the AD for a long term (min.
9 yrs).
• The village is able to provide a minimum of services to the
guests (there is a pharmacy, a food store, a coffee shop,
etc.).
• The surroundings of the area have some appeal
(countryside, sea, mountains, archeological sites etc.).
103

An AD partnership is usually created if the
following conditions are met
18/04/2018
• The idea has been launched within the local community
and the residents have learned the advantages that can
come from the innovation
• Local actors are interested in working together
• A single management unit can be created and is willing to
take most of the entrepreneurial risk. The unit can be
either a single entrepreneur, a cooperative, or any other
suitable form of productive association.
104

Its contribution to Human Development
and profitability
18/04/2018
The proposed innovation is in line with the achievement of:
• MG 7 “ensure environmental sustainability” supporting
the integration of sustainable development in country
strategies
• MG 8 “develop a global partnership for development”
enhancing decent work and employment opportunities in
the tourist-related sector, based on the exploitation of
local resources.
105

Its contribution to Human Development
and profitability
18/04/2018
It complies with the Global Code of Ethics for Tourism of the
UNWTO - specifically with:
• Art. 1 “Tourism’s contribution to mutual understanding
and respect between peoples and societies”
• Art. 3 “Tourism, a factor of sustainable development”
• Art. 4 “Tourism, a user of the cultural heritage of mankind
and contributor to its enhancement”
• Art. 5 “Tourism, a beneficial activity for host countries and
communities”
106

International interest expressed to the Italian
Association of Alberghi Diffusi (ADI)
18/04/2018
In Europe:
• Albania
• Austria
• Croatia
• France
• Portugal
• Switzerland
• Other EU countries
Abroad:
• Brasil
• Cuba
• Costa Rica
• Ecuador
• Panama
• Other countries
107

For further information the relevant websites
are the following:
18/04/2018
• http://www.albergodiffuso.com
• http://www.alberghidiffusi.it
• http://www.sisad.it
108

For further information the relevant books are
the following:
18/04/2018
• BIC Lazio, (2007). “L’albergo diffuso come strumento
innovativo per la valorizzazione del potenziale turistico”,
Rome: BIC Notes, December.
• Giancarlo Dall’Ara (2004). “Il fenomeno degli alberghi diffusi in
Italia”. Patto Territoriale del Matese, Campobasso.
• Giancarlo Dall’Ara (2010). “Manuale dell’Albergo Diffuso”.
Milan: Franco Angeli.
• Maurizio Droli, Giancarlo Dall’Ara (2012). “Ripartire dalla
Bellezza. Gestione e marketing delle opportunità
d’innovazione nell’albergo diffuso, nei centri storici e nelle
aree rurali”. Padova: Editrice Universitaria CLEUP.
109

Actors active in Italy and available to
cooperate in order to properly transfer this
innovation
18/04/2018
• The Italian Association of Alberghi Diffusi (ADI)
• Giancarlo Dall’Ara’s marketing consultancy firm
• S.I.SA.D. International School Specializing in the
Albergo Diffuso
110

18/04/2018
Actors to involve in the receiving country in
order to transfer the innovation properly
• National Ministries involved with tourism to analyze
the legal aspects
• The local administrations in order to verify how this
new model can fit their existing development plans
• Local stakeholders (public and private sectors) involved
in the tourist sector to analyze the feasibility
• Where possible, the support of a Business Innovation
Centre or a Local Economic Development Agency which
can support local administrations and entrepreneurs
providing financial and non financial services
111

For further information the relevant scientific
articles and conference proceeding papers
are the following:
18/04/2018
AD as Hospitality model:
• Dall’Ara, G. (2005), “Il fenomeno dell’Albergo Diffuso in Italia”.
Conference proceedings, Campobasso, November, 2004.
• Dall’Ara, G. (2010), “Manuale dell’Albergo Diffuso”, Milano:
Franco Angeli.
• Confalonieri M. (2011), “A typical Italian phenomenon: The
albergo diffuso”. Tourism Management, 32, 3: 685-687. (ADI –
GDA considers valid only the first part of this two pages
article, while the remaining have been considered misleading)
AD as a business model and PPP-based development process: (n)
112

Thanks for your attention and the patience!
You can quote any part of this lecture provided you cite the source:
Droli, M. (2015), Seminar: “Business innovations for ‘community-based tourism’ development in rural areas: “the case of
‘Albergo Diffuso’”, University of Opatija, Faculty of Tourism and Hospitality Management, Opatija, Croatia, 13th January.
Photo credits: Albergo Diffuso “Residenza Sveva” Termoli, (CB), Albergo Diffuso ‘Locanda Senio’, Palazzuolo sul Senio (FI), Albergo Diffuso
“Sextantio”, Santo Stefano di Sessanio, (AQ), Agenzia Qviaggi; Tuscanhotels; Elbacampingeuropa; Tuscany-charming.
Maurizio Droli
For further info and ideas of collaboration:
http://www.sisad.it/en
maurizio.droli@uniud.it
113

Business innovations for ‘community-based tourism’ development in rural areas: “the case of ‘Albergo Diffuso’”

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