Analysis of the market

analysisWhile the hotel market in Prague at the present time is in decline as a result of the global economic crisis, as a rule, the hotel industry in Prague is highly competitive and continues to experience growth. In 2008 alone, several new luxury brand hotels were opened such as the Sheraton and Kempinski.

Despite this competition within the hotel industry, analysis of the market shows that there will continue to be demand for additional accommodation in Prague well into the future. Research indicates that Prague is perceived as an interesting tourist, business and congress destination in the CEE region. These perceptions are backed by the fact that new hotels continue to be opened by prominent world operators, such as the recently opened Sheraton, Rocco Forte and the planned Jurys Inn, Kings Court, Sofitel and Le Royal Meridien on Senovážné square.  Data as presented in the graph show the planned capacities, an indicator of Prague’s appeal and its international draw as a very attractive destination. While the current economic recession has seen several planned projects’ timelines being set back, there continues to be a demand for increased accommodations within the city.
Compared with other European countries, the Czech Republic occupies a leading position from an economic development standpoint, thereby potentially fostering economic stabilization in the Czech Republic to occur sooner than in other European destinations. As far as the range of accommodations options as well as quality, the Prague market has a comparable standing with other popular destinations such as Vienna.

analysis

Foreign demand is considered one of the primary forces in tourism is which was as high as 89% in 2007 and continued to grow during 2008. Data presented in the graph indicates Prague was among several other destinations which experienced a decrease in visitation as a result of the combination of the drop in foreign demand along with the global economic downturn. The decrease in demand has also been accompanied by a decrease in the length of trips. The RevPAR index recorded a significant drop of 11%. Real estate brokers anticipate the situation beginning to stabilize in 2010, returning to normal in 2011 and 2012. Other key indicators including occupancy and ADR have also recorded a drop, with occupancy experiencing a decline by more than 20% year-on-year in the 1st quarter of 2009.
The City of Prague is also seen as a top destination for the organization of conferences which, from the point of view of a congress hotel, brings in greater income as generated by additional services. Despite Prague’s popularity as a congress designation, there are not many new, top-quality congress premises currently available. A good indication of demand for additional congress facilities can be seen in the example of the Prague Congress Centre which has been ranked the 13th best congress centre in the world, and was the site to host the meeting of the IMF and the SSB in September 2000, as well as the NATO summit in November 2002.

analysis

The table compiled from data provided by the Czech Statistical Office indicates that between 2006 and 2008 there was a 12% decrease in congress premises and a significant increase of 11% in events organized.

A more detailed analysis of the hotel market in Prague and other metropolitan regions of the CEE region is detailed in the Feasibility Study.  A condensed version is also available in the section "Downloads".