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A square with rounded corners colored with a changing gradient that starts red and pink on the top left and changes to purple and blue on the bottom right. On this background are the white letters "T," "H" and "E." To the right of the rounded square, black text reads "Times Higher Education."

Messina’s Hotel Riviera, which has seen better days, is now part of Italy’s bid to brace against domestic demographic decline by attracting more international students. The hotel is now university-owned thanks to the nation’s slice of E.U. pandemic recovery funding.

The Times Higher Education logo, with a red T, purple H and blue E.“About 10 years ago, universities began to feel the impact of shrinking domestic student populations, constant brain drain and diminishing funding for core programs,” Salvatore Cuzzocrea, rector of the University of Messina and president of the Conference of Italian University Rectors, told Times Higher Education.

“Until then, the only real influx of international students came from privileged backgrounds, who came to study Italian art, language and culture,” he said.

Thanks to more than 12 million euros ($12.9 million) in public funding, the Hotel Riviera is now university property and set for a total revamp into a hall of residence. Together with the nearby Hotel Liberty, which has been leased to the university for 15 years, there will be space for an extra 408 beds for out-of-town students—both international students and those coming from other parts of Italy.

Sixty-five percent of the funding comes from Italy’s share of the E.U.’s post-pandemic recovery fund. More widely, the government has set aside €960 million (more than $1 billion) from those E.U. funds, 40 percent of which is intentionally set apart for southern regions, to triple the number of beds available for out-of-town students, bringing the total nationwide from 40,000 to 105,000 by 2026.

Messina’s international student population has “skyrocketed” from just 55 in 2018–19 to more than 900 in 2022–23, and they come from more than 70 countries, Cuzzocrea said.

Pizza-chewing internationals are a welcome sight around town for the rector, but they are also a necessity in a sector bracing itself for demographic decline. A February analysis by the consultancy Talents Venture said the forthcoming fall in the number of 18- to 21-year-olds and a northward drift within Italy in those remaining “constitutes one of the most serious threats to the sustainability of the Italian university system.”

The consultants found that 18 percent of courses had fewer than 20 first-year students last year, with student-linked funding set to fall by more than €600 million ($647 million) between 2020 and 2040, based on population projections. Talents Venture chief executive Pier Giorgio Bianchi said the 15 worst-affected campuses were all in Italy’s south.

While southern universities face the most fearful projections, beds for out-of-town students are a prerequisite for growth at many institutions, with those in the north facing steeper costs.

The University of Milan is spending €20 million ($21.5 million) on purpose-built accommodation for 258 students, with half the funding coming from E.U. recovery funds. Both Italian out-of-towners and international students will have to apply for a bed in the means-tested rooms, which cost €250 ($270) a month.

“In Milan you can’t find a single room for less than €500 or €600. These are new buildings, single rooms, in a good place,” said Marina Brambilla, deputy rector for education and student services at Milan.

“Students need accommodation—this is the first need, and Milan is very, very expensive. Without more accommodation we will have problems,” she said. “Particularly when students come from outside Europe, they want a campus—they don’t want to look on their own for an apartment.”

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