Prague hotel rates catching up to Vienna

Increases in tourist numbers has kept pressure on room prices

Prague hotel rates are catching up with those from Vienna. Over the last five years, average hotel prices in the Czech Republic have risen by 18 percent. In Prague alone, they have gone up 22 percent. In Prague they have already reached €87.43 euros per room per night. In the Vienna it was €95.48, according to STR Global, which tracks developments in the three to five star hotel categories.

Five years ago, the average Prague room price was nearly €25 euros lower than in Vienna.

“Since 2014, the hotel prices have gone from bottom and began to increase, and we are still growing. We are almost catching up with our long-term goal of being at the Vienna level,” Václav Stárek, president of the Czech Association of Hotels and Restaurants (AHR ČR), told daily Hospodářské noviny (HN).

Hotel operators had been helped by the Czech National Bank’s (ČNB) intervention to keep the Czech crown close to Kč 27 per euro since November 2013. This made the Czech Republic cheaper for tourists. The end of the intervention last year did not stop the gradual rise in hotel rates.

In Prague, prices in euros grew year-on-year by 8.2 percent. Across the Czech Republic, room prices in euros rose 7.6 percent last year to reach €81.61

Hotel occupancy in Prague and throughout the Czech Republic is among the highest in Europe. In Prague last year it had an average of 80.2 percent. Hotels in the regions had an average 75.4 percent average occupancy.

The level of the increase in hotel room prices is starting to slow down, though. The price rises in recent years reflected the economic recovery and the willingness of people to spend more of their income on leisure.

Jakub Stanislav, a hotel investment specialist at CBRE, told HN that prices can no longer be expected to grow as broadly as they have in recent years. "Overall growth will be more about inflation and growth in the economy, but it will continue to be more pronounced in hotels with a good location, an interesting concept of services and conference facilities," he told HN. Prague has fewer luxury hotels than London, Rome or Paris, he added.

AHR ČR president Stárek said that the prices could be affected if new large luxury hotel complexes opened, as none had been added in the past five years. This could be a factor to help drive prices down. Prices rises could accelerate, though, if the state began to regulate Airbnb by forcing the operators of flats shared over the internet to pay more in taxes and fees. The Finance Ministry recently announced it was preparing new rules to address the situation with Airbnb.

While Prague is catching up to Vienna in hotel prices, it still would have a long way to go to reach Paris, London or Rome. The average hotel room price in Paris was €237.51 in 2017.

Last year, over 14 million tourists stayed in Czech hotels, almost 9 percent more than a year earlier, according to the Czech Statistical Office (ČSÚ). Nearly two-thirds were foreigners with most coming from Germany, Slovakia and Russia.

Germany alone accounted for 1.7 million tourists in 2017, up 3.89 percent from the previous year. Russia and China saw large increases in the amount of tourists they sent. Russia was up 34.84 percent to reach 500,081 tourists. Chinese tourist numbers rose by 35.85 percent to 454,806.

Britain, however, saw a drop in the number of tourists to the Czech Republic, down 1.21 percent to 428, 583.

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