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Prague

Prague Hotels – Fierce competition blamed for stagnant room price despite increase in tourism arrivals  


Prague, 18 February 2013 – “Currently, there are a total of 341 hotels in Prague with 26,400 hotel rooms. More than 50% of the bedroom stock is in the upscale four- and five-star hotel segment,“ says Karel Klečka who specialises in hotel valuation at Jones Lang LaSalle Prague.  


Between 2000 and 2010, the Prague hotel market experienced a tremendous amount of development. During this time, hotel supply in Prague increased by 7,000 rooms, most of them in the upscale segment. In the last couple of years, fierce competition and declining tourism (especially in 2009) lead to the stagnation of the Prague hotel market in 2010 and 2011. There were no hotel openings recorded in 2010, a year later only 1 hotel (Fusion Hotel***) was opened. However, thanks to growing incoming tourism the Prague hotel market is improving. Currently, there are a few hotel openings planned, including Motel One***, Holiday Inn Express*** and NH Senovážné****. 
   
Prague´s tourist industry is dominated by international visitors (90%). As far as the Czech capital is concerned, Prague has been a popular tourist destination for Germans, Russians, Italians, British and Americans. The most dynamic growth was reported from emerging markets, primarily from Asia, with source markets such as China (+20%) and South America (+22%).   
  
“Despite the growing number of foreign visitors to Prague, hotel rates remain relatively unchanged at an average level of 73 EUR/night. Fierce competition in the market is keeping average room rates below pre-crisis levels. On the contrary, occupancy increased from 67% in 2011 to 69% in 2012. As a result, the room yield increased to 50 EUR/night, which is 7 EUR more than in 2009,“ says Karel Klečka from Jones Lang LaSalle and adds: “the highest occupancy is usually recorded in spring/early summer and then in autumn when a lot of festivals and international events take place in Prague.“