Italy's farm stay market – rising demand and trends

9 January 2019 | Applicable law: Italy

Italy is famous not only for its art cities but also for its natural beauty and exquisite cuisine. It is not a surprise that the local hospitality sector has developed and adopted the so-called agritourism concept, a unique and efficient way of stay in Italy enjoying the rustic nature of the place.

An ‘agriturismo’ (or simply 'farm stay') is a type of hybrid tourism solution, in which commercial services to tourists, such as accommodation and hospitality, are combined with the agricultural ones. In addition, farm stays are designed to provide visitors with food tasting of typical products.

Farm stays are not governed by a single piece of legislation. Indeed, they are regulated simultaneously by article 2135 of the Italian Civil Code and the Italian Law no. 96/2006, along with the relevant regional laws, as applicable from time to time. Legal features of the Italian 'agriturismo' are that it is a business activity mandatorily related to agriculture and it can only be performed by chartered agricultural entrepreneurs and their family members (Italian law no. 96/2006). In other words, the tourism activity has to be deeply interlinked with the agricultural one, whose dominance is measured in different ways according to the applicable local legislation.

In this regard, the latest survey published by the Italian National Institute of Statistics ('ISTAT'), reports that the positive trend of ‘agro-economy’, also registered in previous years, has continued in 2018, with a value amounting to Euro 1.39 billion (+29% over the past ten years).

ISTAT’s report offers a clear picture and a better understanding of the Italian 'farm stay' economy market. In 2018, there were 23,615 licensed farm stays able to provide accommodation to visitors (+0.9% over the previous year, 2017). According to the study, farm stays are widespread throughout the Italian peninsula, though they are mainly located in hilly and mountainous areas with respectively 52.5% and 31.4% of total activities. Tuscany and Bolzano confirm their longstanding and consolidated farm stay tradition, coming first in the list. Nevertheless, the highest growth has been recorded in the southern regions of Italy. The survey also shows how women play an important role in agricultural business, by managing 36% of total farm stay activities.

The recent statistics also reveal an increase in the arrival of foreign tourists (+8.6% over the preceding year), whereas domestic visitors’ growth was more than half (3.5%). The total amount of Italian agri-tourists is higher than those coming from other countries (1.8 billion instead of 1.6 billion).

The positive trend of the agro-economy also appears in relation to the so-called 'enoturismo' (or 'wine tourism'). Similarly to farm stays, wine tourism is also regulated by the combined provisions of several laws. Indeed, Italian Law no 205/2017, with the aim of promoting the 'Made in Italy' products and the internalisation of the related Italian companies, sets out an ad hoc regulation of wine tourism. Wine tourism activities, under the above law, include: (i) the promotional activities carried out in the winery production; (ii) tours of grape plantations, production and exhibition sites of wineries and (iii) wine tasting and marketing, also in combination with food along with the educational and recreational initiatives relating to such wineries.

At a first glance, it appears that legally the definition of wine tourism is very close to that of farm stay. It comes as no surprise that in 2019, the Italian Ministry of Agricultural, Food and Forestry Policies ('Mipaaf') approved further ad hoc regulations (Ministerial Decree no. 2779/2019) wherein, amongst others, wine tourism activities are now considered as being 'connected to agricultural activities'. Therefore, an interesting aspect of this concerns the tax issue related to VAT application. The Italian application of the VAT system applicable to wine tourism companies is currently comparable with that of farm stay entities, providing the possibility of benefitting from a 50% flat-rate reduction of the VAT charged on taxable transactions therein.

The Italian legislator is sending a clear signal of its intention to endorse the Italian agro economy and the entities operating within this sector.

This document (and any information accessed through links in this document) is provided for information purposes only and does not constitute legal advice. Professional legal advice should be obtained before taking or refraining from any action as a result of the contents of this document.


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