Each year we take a family vacation to Italy.  We catch-up with family and friends, and have our kids spend time with their grandparents.  To make it a vacation, rather than a trip, we travel within Italy for about a week, and spend another week with our extended family in central Italy. I started sharing my observations from these trips with my institutional clients when I was on the sellside during the Great Financial Crises.  The annual note was my most read work products. Feel welcome to hit delete or wander down the rabbit hole with me …

 

White Lotus. It seemed like ‘everyone’ was visiting Italy this year.  Countless conversations with friends and clients who planned to visit the peninsula this summer. The results from North American airlines show increases in international travel, and I can’t remember the last time Air Canada ran multiple flights per day between Toronto and Rome.  I have a suspicion that the second season of HBO’s show White Lotus, which is filmed in Sicily, may have had a significant influence on travel plans.  At the baggage carousel in Rome there were so many people talking about connecting flights to the southern part of the country that I noticed.  Tuscany (in the northern part of the country) was busy but less so than in previous years when we visited. When rough seas caused the last-minute cancellation of a boat trip we’d chartered to Cinque Terre, and the owner of the villa where we stayed helped us book a beautiful beach club for the day and commented that ‘this year the beach club has a lot of availability’. Apparently, last year we would have needed to book the beach club well in advance and not the morning of our visit.  The beach club, La Tana del Pirata had the one of the best Italian wine selections I’ve ever seen at a restaurant.

 

eSims.  Most of the family loaded eSims from Airalo (it’s an app) on our cellphones.  This was a relatively simple, convenient, and an inexpensive way to have data service while on our vacation.  $15 per day for international roaming is annoying.  $60/day for a family of four people is even more so, especially after spending the better part of last two decades listening to Canadian telecom executives talk about how high margin roaming is on their earnings calls. For context, my wife bought a physical sim from Wind and paid a one-time fee of €25 for 100GB of data and unlimited calling and text messaging.

 

Markets. No one is talking about markets or ‘the magnificent seven’. I was asked about markets twice during the entire trip.  The only discussions about stocks, inflation, and economics were in my inboxes, podcasts, and streams. The Italian are still complaining about higher prices but even then, it felt like people had recalibrated and expect higher year-over-year price increases.  I felt that prices were about the same as last year for anything we bought in Italy; items like flights, accommodations, and the car rental that we purchased from Canada were significantly more expensive than last year.  

 

Building an Empire on Personality and Perseverance. The Mad Butcher of Panzano, Dario Cecchini turned personality into a restaurant empire.  You can hear him yelling Buon Appetito and greeting patrons in his restaurants while sitting through lunch. You can’t help but laugh when he poses for pictures and says ‘carne’ (meat in Italian) instead of ‘cheese’ as he smiles for the cellphone cameras.  Lunch was excellent and cost less than the appetizers in ‘his’ restaurant in the Bahamas.  After lunch, there is a flood of patrons from his restaurants into his butcher shop, where he has a phalanx of staff to serve clients. Ninety minutes later the lunch crowd is gone, and Dario is standing alone behind the counter of his butcher shop.  It’s Tuesday afternoon and he’s engaging as he grinds. I was left with the impression that he knew the exact margin and turnover on everything in his shop from memory; I’m pretty sure he did okay on the salt we bought.

 

Lighting Round

• Southern Italy may be uncomfortably hot but the temperature in Tuscany and Central Italy was perfect during our visit; highs were in the low thirties to high twenties and low twenties to high teens each evening.
• Bolgheri (the west side of Tuscany) and Napa are my favourite places on the planet; more specifically the most northern part of Bolgheri and Prichard Hill in Napa.  Both regions produce some of my favourite wines.
• We are not supposed to talk about the benefits of global warming, but I love Cabernet Franc and it seems like the proportion of Cab Frac in the Bordeaux blends from Bolgheri continues to increase.
• In Tuscany, if you order meat cooked medium-rare it is pretty much rare; red to blue in color. In Rome, if you order meat cooked medium-rare it is pretty much medium-well, pink to brown in color.
• They are already cleaning Rome for the jubilee in 2025.  The jubilee is a Chrisitan pilgrimage, that happens every twenty-five years. During the jubilee the Saint’s Doors at the four major basilicas in Rome are opened.  2000 was the last jubilee and the cleanest I’ve every seen the city.
• I love driving on the highways in Italy.  The left lanes are for passing.  It’s brilliant.
• The price of food and wine in Italian restaurants, all over the country, continues to reinforce how expensive it is to eat out in Toronto.  We ate at fabulous restaurants, the food was always inexpensive and the wines were marked up €5-10 above the retail prices we’d seen at wineries we’d visited.  The largest mark-ups we saw on wine were about 50% at a Michelin Star rated restaurant in Rome.
• Car Rentals (yes, three bullets on a car rental):
  • I’ve had less involved conversations while purchasing a car at a dealership than some of the folks picking up rental cars in Rome.
  • My rental, an Alpha Romeo Stelvio needed a liquid called AdBlue; I had no idea what that was until the car told me it wouldn’t start in 600km if I didn’t add AdBlue. Apparently, the AdBlue (a clear liquid) needs to be refilled every 5-7k kms. 
  • There were three attendants who checked in my rental car when I dropped it off in Rome.  I have never seen this level of intensity from one attendant, never mind three, when returning a rental car. I wonder what they missed earlier in the week.
• Italian’s tap huge amounts on their credit cards today.  I remember using tap to pay for things in Italy a few years ago; it was like I had done magic and retailers would often call over colleagues to see if the tap had worked.  This visit Italian’s were surprised when I couldn’t tap more than €130 and they would watch closely to confirm the transaction with the card inserted was successfully completed.
• Fiumicino, Rome’s largest international airport now looks like the airport you’d expect in a major city.  The retail in FCO finally looks like what’s you’d expect to find in the Italian capital. And, FCO has automated passport scanning for Canadians over the age of fourteen!
• There are still scooters for rent in Rome but the quantity looks more sensical today.  Last year, I saw hundreds strewed about during the drive from downtown to the airport. The business model didn’t look like it could work, without these units being picked up and moved back to the core where utilization would be higher. This year I could count on two-hands the number of scooters I saw outside the city centre.

 

We had the privilege of sharing our trip this year with some very close friends, from Canada, who have been threatening to come to Italy with use for twenty years; we also had a pop-in from some friends from the UK. The trip was great. It was excellent to catch-up and reflect on the last year. I’m very fortunate in family and friends, and clients.  I love my work, it lets my family do lots of interesting things together, and there is nothing I enjoy more than helping my clients.

 

I hope you’ve enjoyed my nonsense. If you’d like to read observations from previous years you can find them here. I’m a very guilty vacationer, so I welcome you to reach out so we can catch-up and hope the summer is treating you exceptionally well. 

 

All the best.

 

Delli (delli@cibc.com) 

 

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