Earnings of a Beach Establishment and Costs for the Concession: A Detailed Analysis

Understanding Beach Establishment Management

In the midst of the summer season, questions about the earnings of a beach establishment and the costs of a concession are more than legitimate, especially in light of the long-standing issue of extensions to EU directives.

Back in 2006, the EU, following the Bolkestein directive, mandated a public tender through open competitions – open to all EU operators – even for beach concessions.
Despite the risk of an infringement procedure from the EU – currently only suspended – Italy has continuously postponed the public tender for reasons of political expediency, with the latest extension contained in the 2023 Milleproroghe decree set to expire on December 31st.

However, in April, the Council of State issued a ruling censuring the extension of expired coastal concessions up to the end of 2023, but the government has yet to make a decision on the matter.
While waiting for a political resolution to this complex issue, let’s explore all the details about managing a beach establishment: costs, fixed and variable expenses, and earnings.

Regulations for a compliant Beach Establishment

As reported in the Official Gazette, beach establishments are delimited structures, managed as a whole, mainly equipped for bathing.
Besides the technical, building, hygiene, health, and safety requirements as per existing regulations, beach establishments must meet the following minimum requirements:

– A number of changing rooms equal to 10% of the number of shaded areas, such as umbrellas and tents.
– Common changing room with similar features as the individual cabins.
– Two restrooms, including one for disabled individuals, every hundred shaded areas.
– Two cold showers and one hot shower every hundred shaded areas.
– Waste collection system for differentiation, as per municipal regulations.
– Knowledge of at least one foreign language by reception staff.
– Medical and first aid supplies as required by the competent authorities.
– Cash management by the operator.
– Mobile phone charging facilities.

In general, when there are lots available, winning a portion of the beach area requires winning a competition periodically announced by the Maritime Domain Authority.
When taking over an existing beach establishment, obtaining the Single Environmental Authorization is necessary, which must then be submitted to the One-Stop-Shop of the Municipal Productive Activities.

Concession Costs and Other Expenses to Consider

The primary expense is the beach concession itself.
In addition to meeting all criteria, there is the cost of the fee, which does not fall below 2,500 euros annually.
Aside from the annual fee, there are several management expenses to consider:

– Waste disposal taxes.
– Beach cleaning services.
– Lifesaving services.
– High VAT.
– Property tax (IMU).
– Local taxes on fees.

Waste disposal taxes are borne by beach establishments, calculated based on the entire beach area and year-round.
The cost can range from about 2,000 euros for smaller establishments, up to 15,000 euros for larger areas.
Beach cleaning is the responsibility of the manager, even in winter.
The beach must be kept clean constantly, with costs varying depending on the size and location.

Buying an existing beach establishment can cost several hundred thousand euros, varying according to location, positioning, and size.

Beach Establishment Earnings: what to Expect

Determining the earnings of a beach establishment is not straightforward and depends on various factors such as the area size, the number of umbrellas, and the quality/quantity of services offered.
Studies suggest that an Italian beach establishment can earn an average of around 150,000 euros annually, which can double in major tourist destinations.

Earnings can increase significantly if additional services like a restaurant or evening entertainment are offered, but this also raises operational costs.
While exact figures are hard to pin down, estimated revenues typically exceed the concession fee paid to the State.

Earnings based on Services Offered

To delve deeper into potential beach establishment earnings, let’s consider an example with around 500 umbrellas rented out at about 15 euros each per day.
Fully occupying the establishment could yield up to 225,000 euros per month, totaling over half a million euros in three months.

These hypothetical earnings can be supplemented with profits from extra services like managing a bar or restaurant, swimming courses, or evening activities like private parties or disco nights.

Please note that this calculation does not account for variations like rainy days, low rental periods, or weather-related damages.