Europe -  Prague

For a comprehensive review of the Europe market, click below:
HVS In-Depth Europe Hotel Valuation Index:   2022 | 2021 | 2020 | 2019 | 2018 | 2017 | 2016 | 2015 | 2014 | 2013 | 2012 | 2011 | 2010 | 2009 | 2008 | 2007 | 2006 | 2005 | 2004 | 2003 | 2002 | 2001

Prague is the Czech Republic’s industrial, political and financial centre and is an important gateway to Central and Eastern Europe. It is considered to be predominantly a leisure destination, but increased business activity and meetings, conferences and events over the last few years are indications of its improving international profile and of the further potential of the commercial segment. The city is primarily a spring, early summer and autumn destination. Success has been achieved in developing the city as a short-break destination, and as part of the Vienna-Budapest-Prague triangle travel route. The city is also a weekend-break destination all year round, particularly around Christmas. Affordable hotels and a high proportion of discount airlines servicing the city make it an attractive destination for stag parties and the like, and although the city does have a plethora of historic and cultural attractions, it generally lacks the high-end shopping and culinary experiences that tend to attract luxury tourists.

Prague’s visitors are primarily foreign tourists, traditionally constituting 85.0% of total visitation. The primary foreign source countries for Prague are Germany, the USA and the UK. The most notable growth in visitation in recent years was achieved by Chinese tourists. Owing to the greater weight of leisure demand in Prague, the city’s visitation, overnight demand and occupancy are somewhat more pronounced than in other city destinations. The market’s high season for leisure runs from the Easter weekend to September, while March, April, June, September and October typically have strong commercial and MICE demand. Increasing visitation to the city is reflected in the growing occupancy and average rate in recent years (pre-pandemic). Prague recorded a compound annual growth rate (CAGR) for occupancy of close to 2.5% from 2014 to 2019, and a CAGR for average rate of a staggering 5.0%, in euro prices. Most recently in 2020, the city experienced a significant downturn in all metrics due to the COVID-19 pandemic. A similar trend continued into 2021 with the first half of the year experiencing single-digit occupancies, while the second half showed some signs of recovery.

Prague’s pipeline remains modest, at around a 5.3% increase over the next couple of years, with most of the new projects falling into upscale and upper upscale category. The notable expected openings include the 204-room Almanac Alcron Prague (June 2022), the 523-room Hard Rock Hotel Prague (May 2023) and the 40-room Six Senses Liv Nordic Prague (February 2024). Compared to 2020, 2021 marked a decrease in terms of transactional activity in Prague with only one hotel transacting, the 165-room Grand Hotel Europa, which was sold for an undisclosed sum in March 2021.

Our HVI analysis indicates a marketwide increase in hotel values of 4.0% in euro prices and a decrease of around 1.4% in local currency due to the appreciation of Czech Koruna against the Euro. Prague was one of the most impacted cities in Europe in terms of RevPAR decline in 2020 but showed encouraging signs in the latter part of 2021. With the limited new supply and the healthy growth in visitation pre-pandemic, a rebound in performance to pre-COVID levels is anticipated by 2024.

Change In Value For Market: (€Euro)

Legend
Significant Value Increase: Greater than +10%
Moderate Value Increase: Between +3% and +10%
Stable Values: Between -3% and +3%
Moderate Value Decline: Between -3% and -10%
Significant Value Decline: More than -10%

For more information, please contact:

Sophie Perret, MRICS, MBA
Senior Director
[email protected]
  • +44 20 7878 7722 (w)
  • +44 0 7725781037 (m)
Nikola Miljković
Associate
[email protected]
  • +44 0 2078787724 (w)
  • +44 0 7593572865 (m)