Italy's travel market reached a record €30 billion in gross bookings in 2025, according to new data from Phocuswright. The figure represents a 4.5% increase year-on-year, propelled by a strong rebound in inbound tourism and accelerating digital adoption across the sector.
The report, released ahead of the Phocuswright Europe conference in Barcelona, shows that total tourism volume hit 476 million overnight stays — up 10 million from the previous year. Crucially, the growth was almost entirely driven by international visitors, while domestic demand remained essentially flat.
Low-cost carriers reshape aviation
Low-cost carriers have dramatically altered Italy's aviation landscape. During summer 2025, they captured 61% of total capacity, up from 48% in 2019. This expansion has improved connectivity to secondary cities such as Bari, Catania, and Palermo, funneling more inbound travellers to regions beyond the traditional gateway hubs of Rome and Milan. Legacy carriers like ITA Airways and Alitalia (now merged) have faced increasing pressure on domestic and short-haul European routes.
The hotel segment remains the largest by gross bookings, with room revenue reaching €19.1 billion in 2025. Hotel investment also rose, exceeding €2.5 billion, as international investors targeted both gateway cities and emerging luxury destinations like the Amalfi Coast and Lake Como. This mirrors broader trends seen in other European markets, such as the UK travel market surpassing £56.6 billion, where hotel performance has been a key driver.
Rail travel is gaining traction, with gross bookings reaching €4.3 billion and online penetration climbing to 64%. High-speed operators like Italo and Trenitalia's Frecciarossa are benefiting from increased digital distribution, particularly through mobile apps and OTAs.
Pete Comeau, managing director at Phocuswright, commented: "476 million overnight stays is a record, but the more telling number is where the growth is coming from. Foreign visitors drove the increase whilst domestic demand stayed essentially flat."
The shift to digital channels is unmistakable: 58% of all bookings now occur online, with mobile platforms playing a significant role. This trend is consistent with developments in other major travel markets, such as the Western travelers driving Japan hotel ADR to record highs, where digital booking adoption is reshaping distribution.
Looking ahead, the Phocuswright Europe 2026 conference will delve deeper into these trends, bringing together industry leaders from airlines, hotel groups, cruise lines, and travel-tech vendors to discuss the forces shaping Europe's travel economy. For travel professionals, the message is clear: Italy's market is not just growing — it is transforming, with digital and inbound demand leading the way.
