Albergo Diffuso: a Sustainable and Socially Innovative Business Model

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EXECUTIVE SUMMARY 
 
The tourism and hospitality industry has experienced a progressive expansion and 
diversification in the last years, becoming one of the largest and fastest-growing industries in 
the world. Due to the Covid-19 pandemic, the Tourism Direct Gross Domestic Product, 
corresponding to the part of GDP produced by tourists, dropped by more than half in 2020. 
However, the forecast for 2022 is optimistic about a progressive recovery. Unfortunately, the 
activities of this industry did not show much ambition to become more sustainable, even though 
tourists are more interested in sustainable service offers and there is a growing awareness of the 
impact of business practices on the environment. As a matter of fact, the tourism and hospitality 
industry is crucial for its direct impact on the natural and cultural heritage and on local 
communities. Thus, businesses operating in this industry should straighten their strategic 
orientation towards sustainable development, reconsidering how they create, deliver and capture 
value. 
Innovating a business model to reach sustainable goals is challenging for tourism 
businesses. Still, it also creates new opportunities and gives the chance to address the emerging 
global challenges of inequality, poverty, environmental degradation and climate change on 
which the Sustainable Development Goals are focused (SDG). For this reason, the SDG 
became a strong driver of change, with the development of the 2030 Agenda on behalf of all 
the United Nations Member States, which committed themselves to reaching the 17 SDGs 
requiring the contribution of private actors as well.  
Adopting a sustainable model requires the collaboration of local communities and other 
business partners to reduce the potential negative externalities caused by stakeholders’ activities 
and promote the production of positive impacts. The transition to sustainable business models 
(SBM) does not represent only a way to be ethical and sustainable, but also a way to create value 
and competitive advantage. An SBM is not centred only on the mere financial value creation, 
but it extends the value created to the social and environmental areas impacting the company’s 
competitive advantage and creating outcomes affecting several stakeholders. The SBM enables 
the attainment of SDGs and enhances the creation of a shared value, increasing the company’s 
competitiveness while strengthening the development of the economic and social conditions in 
the community of interest.
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The purpose of this dissertation is to demonstrate the sustainability of a new business 
model applied in the tourism and hospitality industry that satisfies all the necessary conditions 
to be considered a sustainable business model and that could be a relevant point of reference 
for the development of sustainable hospitality in Italy and abroad: the albergo diffuso (AD). The 
AD has been analysed with respect to the minimum requirements to be officially recognised by 
Associazione Nazionale alberghi diffusi and the elements determining the socially innovative and 
sustainable characteristics. Moreover, an empirical study was undertaken to collect qualitative 
data through interviews with some selected ADs in order to have evidence of the link between 
the activities developed and the positive outcomes created from an environmental and social 
point of view. 
The first chapter covers the tourism and hospitality industry analysis, distinguishing 
tourism from hospitality, because, even if they are interconnected and we can refer to them with 
an all-inclusive term, they are not correspondent: the hospitality industry is made of four 
business areas (food & beverage, accommodation, entertainment, travel & tourism), while 
tourism comprehends hospitality, transportation, tourist destination, travel companies and it 
refers only to tourists. On the contrary, hospitality services can be available for both tourists 
and locals. Afterward, the chapter narrows its focus on the hotel industry defining the main 
accommodation typologies, with reference to the ones formally identified in Italy. It is then 
emphasised the necessity for the enterprises of the industry to shift to a sustainable business 
model (SBM), due to the huge impact that such businesses have on the environment and society, 
and the increasing tourists’ awareness of the effects produced. Indeed, the chapter suggests the 
adoption of an SBM enhancing the SDG achievement, aiming at reaching economic, 
environmental and social sustainability and creating value for several stakeholders involved in 
the activities. For this reason, the Triple Bottom Line approach is proposed as a useful tool to 
monitor the business performance under the three pillars of sustainability and assesses it from 
the Profit, People or Planet’s point of view. Furthermore, the chapter deepens the Sustainable 
Tourism definition, through an application of the TBL approach: tourism is sustainable when 
it makes optimal use of resources, respects the socio-cultural authenticity of the host 
community, enhancing inter-cultural integration, and when it ensures the long-term operational 
economic viability. The dissertation continues by comparing Sustainable with Responsible 
Tourism, which is a more practical concept than the former, acting directly on tourism activities 
and behaviours. At this point, several versions of sustainable tourism are introduced 
representing valid alternatives to unsustainable and mainstream mass tourism (Ecological
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tourism, Ecotourism, Green Tourism, Soft tourism, etc.). Accordingly, a Hotel Sustainable 
Business Model is developed through the application of the triple bottom line approach 
underlining the importance of co-creation, since, in the case of hospitality services, a lot depends 
on guests’ behaviours, and consequently, it is fundamental to involve and educate visitors to 
responsible practices. Finally, the study suggests the use of the Triple Layered Business Model 
Canvas (TLBMC) to draft the sustainable-oriented business models, as the division into three 
layers allows to focus on each sustainable pillar taken into account. The chapter concludes with 
future hospitality trends and insights to understand the future development of the industry. The 
forecast confirms an increasing interest in sustainable travels and stays, combined with a need 
to live authentic and regenerating experiences. 
The second chapter is dedicated to the albergo diffuso model, a made-in-Italy example of a 
sustainable business model in the hospitality industry. It encompasses the history of the model 
born in 1976 in Friuli Venezia Giulia together with the main events of the albergo diffuso (AD) 
development, such as the first time the model was formally recognised by a regional regulation 
in Sardinia, which constitutes the starting point for the following regulations in the other Italian 
regions. The chapter then describes the fundamental elements of the albergo diffuso model, both 
structural and conceptual, with a focus on the role and characterization of the location, 
conceived as a tourist product able to give a significant contribution to the attractiveness of the 
overall tourist experience, as well as the existence of a territorial network. Afterward, the study 
analyses the development of the model throughout years, remarking the creation of the 
Associazione Nazionale alberghi diffusi (ADI) in 2006, which manages its European trademark, 
identifying the requirements that need to be met to be formally defined as an albergo diffuso. 
However, the association also foresees other forms of diffused hospitality: paese albergo, residence 
diffuso and albergo diffuso di campagna.  The chapter recalls the main steps that brought to the 
internationalization of the model and it estimates the actual presence of AD in Italy, although 
the number is expected to increase also thanks to the National Recovery and Resilience Plan 
(NRRP) funds. The advantages and disadvantages of an albergo diffuso are then presented, 
stressing especially all the positive environmental and social outcomes. The model is examined 
from the sustainability point of view and the innovation one. The former refers to an intrinsic 
feature of the model that results in being naturally inclined to satisfy some specific Sustainable 
Development Goals and create a co-evolutionary relationship with the surrounding territory 
and the local community, while the latter refers to innovative elements of AD as the focus on 
strengthening human relations or finding local experiences or even the use of technology to
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optimize the guests’ experience. In addition, the Weaver’s matrix is introduced as a tool for 
estimating the sustainability and the competitive position of a particular tourist destination based 
on tourist intensity and tourism regulations, enabling to capture the difference between an albergo 
diffuso and an agritourism (rural tourism business). The third generation of tourists is identified 
as the target segment of the model, since they are motivated by the need to live an authentic 
experience in which they can actively participate thanks to co-creation. Moreover, the diffused 
hospitality initiative can encourage the recovery of the tourism industry after Covid-19 as it is 
naturally suitable to satisfy the emergent guests’ requests. In conclusion, the chapter highlights 
the lack of homogeneity within the regional regulations and the consequent problems, and the 
current funding opportunities with a particular reference to the European funds. 
The third chapter starts by showing the actual picture of AD distribution in Italy, which 
fosters the development of the model thanks to the territory made of many small towns and 
villages. Although it is not possible to have clear information about the distribution of the 
estimated 250 alberghi diffusi, it is clear that they are concentrated in the Centre of Italy. The 
chapter continues with an analysis of 8 different Italian case studies, representing several Italian 
regions and capturing the best practice from each sample. Subsequently, the case studies analysis 
is expanded to the international context presenting: the emblematic Japanese case, where the 
small centres showed the same criticalities of the Italian scenario allowing for a successful 
application of the model with the aim of regenerating the local territory; and the recent project 
developed in Africa with the social purpose of donating the revenues for financing the health 
assurance of Rwandan people. This study has undertaken a multiple case approach, conducting 
semi-structured interviews via telephone with selected Italian alberghi diffusi, in order to collect 
evidence of the model’s sustainability and explore the outcomes of such hospitality business. 
The research results show an evident contribution of the interviewed structures to the creation 
of positive outcomes for the local territories and communities, enhancing positive social 
impacts. Interviews’ findings are presented accordingly to the topics that emerged during the 
interviews. Thereafter, the explanation of the basic concepts and tools necessary for the 
identification of the alberghi diffusi impacts, such as the logic model and the logical framework 
and the evaluation of the social impacts, all the societal and environmental changes created by 
activities. Finally, the thesis elaborates an impact framework to summarise the link between the 
activities developed by ADs and the outcomes created, reconciling every element of the 
framework with social impacts corresponding to Sustainable Development Goals Impact 
Standards. In conclusion, the empirical data shows that an albergo diffuso can enhance the positive
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social impact creation and, for this reason, it is configured as a sustainable and socially innovative 
model from several points of view. Albergo diffuso would be a great starting point for tourism and 
hamlets regeneration, in line with the priorities fixed by the United Nations’ 2030 Agenda for 
sustainable development, also representing Italian excellence to international tourists and 
foreign countries where the model is being exported. It is finally recommended to further 
develop the research in this field with attention to the identification of proper indicators to 
measure the outcomes created, since it is still missing a structured and formal set of indicators 
to measure the sustainable performances of tourism and hospitality enterprises.
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CHAPTER ONE – SUSTAINABLE BUSINESS MODELS IN TOURISM AND 
HOSPITALITY INDUSTRY 
 
This first chapter starts with an introduction of the reference industry, the “Hospitality 
Industry”, in order to understand which are the different areas characterizing the industry. It 
follows a clarification of what distinguishes Hospitality from Tourism and some statistics about 
tourism activities both worldwide and in Italy. Given this context, the focus will be narrowed 
to Hotel Industry, explaining all the several typologies of accommodation.  
 The second paragraph is focused on a core concept for this thesis: Sustainability. It starts 
with how Tourism and Hospitality businesses deal with sustainability, it explains how much 
fundamental is to strategically orient businesses of this sector towards a business model that is 
sustainable, that is beneficial for both companies and for the achievement of the SDGs, and it 
continues deepening the concept of the value proposed, delivered and captured. In addition, 
the paragraph examines Sustainability as a concept based on the 3 pillars of the Triple Bottom 
Line approach (TBL) and it ends exploring the characteristics of Sustainability and Responsible 
Tourism, proposing the many forms in which the former can be articulated and the phases to 
implement the latter. 
The third paragraph concerns the Hotel Sustainable Business Model, a specification of 
the Sustainability Business Model (SBM) used in the Hotel industry and it includes Triple 
Layered Business Model Canvas, that can be employed to show the SBM under analysis. 
In conclusion, the chapter presents the sustainable trends in the sector, thus looking at 
what is happening on the demand side in terms of travellers’ emerging needs and desires, and 
on the offer side in terms of widespread practices among hotel companies. 
 
1.1. THE HOSPITALITY INDUSTRY 
The hospitality industry is providing services to customers that go beyond the 
satisfaction of the basic needs, indeed this industry is fuelled by extra-income of people. The 
hospitality businesses are based on the relationship between guests and hosts: the latter are 
completely focused on the customer, since their reason for being is to provide wellness, comfort, 
and entertainment to guests, offering them accommodation, food, drink and entertainment.
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 The hospitality industry is divided into four main areas: 
1. Food & beverage (Restaurants, Bars, Fast foods); 
2. Accommodation (Hotels, Resorts, Bed & Breakfasts, Motels); 
3. Entertainment & Recreation (Cinemas, Theatres, Museums, Zoos); 
4. Travel & Tourism (Airlines, Trains, Cruise lines, Tour guides, Travel agents). 
Considering another point of view, it is possible to distinguish between two types of hospitality: 
 Private hospitality, arranged in a private home by individuals for individuals; 
 Commercial hospitality, where lodging, meals, beverages and entertainment are 
provided for making a profit. 
In the former type, guest and host are equal in power, the guest feels a moral obligation 
to be a good company, while in the latter the only obligation of the guest is to pay and behave 
adequately, maintain the right to go elsewhere in case of unsatisfactory hospitality service. 
The secret of hospitality is to make the guest feel welcome, pleased as if he were at home, 
fulfilling and anticipating all his desires. 
The current concept of hospitality is the result of an evolution of the accommodation of 
the aristocrats in the 18
th
 century, when courtiers gave hospitality to high-rank people. Even if 
today we do not make differences according to the social status, we do recognise that travellers 
have different features, travel expectations impacting the type of accommodation they’re going 
to choose and how much money they want to spend for it. Moreover, in commercial hospitality, 
there are still some social rituals expected by guests, such as a warm welcome at the arrival, the 
final greeting and thanks upon departure. All such expectations shape the quality perceived by 
guests and highly impact the level of guests’ satisfaction once they have received the service: the 
wider the gap between the quality perceived and the quality expected, the worse it is. A key 
element to shorten this gap is empowering the front office employees, since they are the direct 
point of contact with the guests. 
 
1.1.1. HOSPITALITY VS. TOURISM 
Hospitality businesses may offer services to tourists, but they can also include the 
provision of services to people who are not tourists, such as locals enjoying their free time, or 
people coming to an area for reasons other than tourism. Anyway, the two industries of tourism
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and hospitality are highly interrelated, thus it’s useful to briefly analyse the tourism sector as 
well. 
Tourism refers to all the activities carried out by visitors. “A visitor is a traveller taking a 
trip to the main destination outside his/her usual environment, for a period of time shorter than 
a year, for any main purpose (business, leisure or another personal purpose) other than 
employed by a resident entity in the country or place visited” (UNWTO, 2010). 
According to UNWTO (United Nations World Tourism Organization) statistics, the 
direct economic impact of tourism in 2019 was estimated to be USD 3.5 trillion, representing 
4% of the world GDP. This contribution is measured in terms of Tourism Direct Gross 
Domestic Product (TDGDP), which is the portion of GDP produced by all industries that 
interact with tourists (UNWTO, 2021). 
Until 2019 tourism saw a continuous expansion and diversification, becoming one of the 
largest and fastest-growing economic sector all over the world. Several factors have contributed 
to such a huge expansion: a relatively strong global economy, the expansion of the middle class, 
the increasing market openness and also the urbanization of emerging economies, technological 
advances, and innovative business models. Focusing our attention on Italy, in the pre-pandemic 
period the tourism domestic product was 5,9 % of overall GDP (UNWTO, 2021). 
Unfortunately, the COVID-19 pandemic dramatically reduced the TDGDP by more 
than half in 2020: it diminished till being equal to 1,8% of the global GDP. In 2021, thanks to 
the vaccination and lower travel restrictions, global tourism experienced a 4% upturn, with more 
than 15 million more international tourists’ arrivals (overnight visitors) than in 2020, though it 
remained 72% below the pre-pandemic levels (UNWTO, 2022). In 2022, UNWTO points out 
that international tourist arrivals could raise by 30% to 78% compared to the previous year. 
However, this would be by 50% to 63% below the pre-pandemic presences. Although the 
international tourism is struggling to recover, the domestic tourism is driving the recovery of 
the sector, especially for the large domestic (UNWTO, 2022).