Italy is both blessed and cursed when it comes to the country’s bounty of history and responsibility of preserving it all. It is “estimated that Italy is home to two-thirds of the world’s cultural treasures” (Safer). Not only is Italy lucky to have such a rich and (fairly) well-preserved history, but it is also fortunate to benefit economically from the tourists who travel from around the world to visit Italy’ treasures. But, on the other hand, Italy’s treasures have proven to be a curse due to the amount of financial resources needed to restore the historical sites and keep them running.
Unfortunately, not being able to restore and maintain the country’s historic treasures is a problem Italy knows all too well. It is apparent that “the country is too broke to keep its historic ruins, churches, and monuments from crumbling to dust. Italy is up to its neck in debt” (Safer). Italy’s financial hardship is the result of many aspects, one of them being taxes going unpaid. Rossella Ream, the director of the Colosseum shared that the Colosseum is receiving only five percent of what it needs to run, restore, and maintain the historical site, from the government (Safer).
Luckily for Italy, its government, the people, the country’s economic status, and its history, people of the world and other investors have stepped up to take on the responsibility of restoring and maintaining various historic treasures around Italy. It has now become very fashionable, high fashion at that, to oversee the restoration of Italy’s history. Major fashion houses have either taken it upon themselves or are donating substantial amounts of money to go towards the refurbishment of various parts of Italy’s history. To name a few of the benefactors and fashion houses who are tending to the restoration of historic Italy are: Diego Della Valle, the Fendi and Buldari fashion houses and another fashion house in Japan that has strong ties to the country.
It is really interesting with as many tourists as Italy attracts (countrywide) that the government doesn’t allocate and invest more money into the preservation of these areas. One would assume that the government would place great significance on Italy’s history and the tourist industry because of the economic benefits associated with them. The country as a whole benefits from the tourist industry, the federal and local governments benefit in various forms of taxes, and the local businesses gain substantial business and stability. Italy’s annual revenue from tourism in 2013 was about $46 billion in US dollars, making tourism a very profitable part of Italy’s economic standing (International Tourism). When looking at Italy’s economy as a whole, “two-thirds of Italy’s Gross Domestic Product (approximately 69%) is represented by the services sector, whose strong point is tourism” (The Italian Economy).
Looking next at the United States, approximately $1.5 trillion US dollars was generated in the travel and tourism industry in 2012 (The Travel). This accounts for about 8.6% of the United States GDP (Travel & Tourism). To ensure the continued growth and development of this sector, the United States government and United States travel and tourism industry have created an alliance that will foster the progression of travel and tourism in the United States. The U.S. government knows that to promote the development of travel and tourism it needs to allocate money for the restoration and maintenance of the industry. Therefore, “under the Travel Promotion Act, the Corporation for Travel Promotion (CTP) can access up to $100 million in federal matching funds to execute its mission based on a 1 to 1 ratio of public to private funds” (The Travel).
When comparing the amount of money invested into and generated by the travel and tourism industries of both Italy and the United States, there seems to be quite a big difference. More than half of Italy’s revenue comes from the travel and tourism sector, but government invests very little into development and maintenance of the industry. Whereas, a very small portion of the United States’ GDP is generated by the travel and tourism sector, but still the government invests a healthy amount of money into preservation and growth of the sector. Where does the difference lie?
After comparing how much money is generated and invested in the travel and tourism sectors of both Italy and the United States, a lot of questions arise. Where is Italy spending their money if not in the tourism and travel sector? Why does Italy not invest more money into the restoration and maintenance of their tourist attractions? Why has the United States decided to invest a certain amount of money in the travel and tourism sector? Why does Italy, a country that strongly depends on its travel and tourism sector to generate revenues, place seemingly low significance on the sector compared to the United States, when it relies so heavily on that revenue source, but doesn’t invest a fair amount?
I do not pretend to know the answers to these questions, but I can try to draw some conclusions. First, the Italian government is blind to the value that its travel and tourism sector holds in terms of the country’s economic stability. Second, the Italian government, for some reason, believes that the cost associated with restoring and maintaining the country’s history and tourist attractions is greater than the potential benefits. Third, the country is corrupt and is allocating resources elsewhere. Any number of these reasons, or a combination of them, as well as others I did not identify, could play a part in the travel and tourism sector in Italy not receiving funding.
However, Italy is lucky that other investors have decided that the restoration and maintenance of Italy’s history is worth their attention and money. Members of the high-end fashion industry have taken a particular interest in the preservation of some of Italy’s most famous and beloved historical sites. Why are the fashion houses doing this? The fashion houses claim it is because they love the country and its history and have a special connection to Italy. But, I would not take that at face value.
If Italian businesses operate similarly to those in the United States, and I wager they do, it is not a smart business move to invest money unless you have an understanding of the gained benefit. When it comes to philanthropic activities, such as restoring a country’s history, a business is likely using the opportunity more as a marketing and promotional tactic, where they will one day be able to display their name and reap the benefits of their philanthropy.
Ultimately, the goal of a business is to create a profit. There are many ways to achieve this goal, but all involve some sort of marketing and promotion. One way that companies market and promote their brand is through philanthropic activities. Companies believe that if they help their surrounding community, then in return they, the company, will experience and increase in customer awareness, trust and sales. These types of marketing tactics often result in an ‘everyone wins’ scenario; the surrounding community and the company both gain something.
This practice is regularly used in the United States. Examples of this include, but are not limited to Wells Fargo, Walmart, and Chevron Corporation, and even down to smaller businesses. While I was a swim coach and raising money for my team, companies were always willing to donate money or host fundraising events for the swim team contingent on the amount of publishing and recognition it would generate. This is exactly what the fashion houses are doing by overseeing the restoration of Italy’s historic landmarks.
It will be interesting to see if the benefits of these philanthropic activities will be greater than or less than the cost of the restorations. My gut tells me that the benefit the companies will gain from taking on the various projects will exceed the cost. These companies will likely gain the opportunity to display their name on the various advertisements of the historic sites and also gain exclusive access to the premises. The companies can then use the exclusive access to the sites as a way to further promote and set apart their companies. Perhaps the fashion houses will host fashion shows or events at these locations that will create a further perception of their elite status.
Ultimately, I imagine that this scenario will further create a “win-win” situation for all of the parties involved. The fashion houses will gain the edge and publicity of having access and using the unique and historical sites, as well as reaching new markets. Likewise, the historic attractions will gain exposure and likely more popularity and visitors. Finally, the federal and local governments will also benefit from the increased awareness and traffic to the historic sites; in addition to the country’s history being restored and preserved, which will work to secure the future of Italy’s travel and tourism sector.
After the restorations are complete, I will be interested to compare the success of the tactics to companies in the United States of similar size who have completed equivalent philanthropic activities. I will be looking specifically at cost and benefit ratios and the difference in customer awareness. It will be fascinating to see if philanthropic marketing is more effective in one country or if it is about the same.