The latest STR figures show that the Prague hotel market has borne the brunt of the coronavirus crisis in Europe. It recorded the steepest decline in average revenue per room in 2020, down 84.6% on the previous year on the back of an average 16.6% annual room occupancy rate. Even so, confidence in the Prague hotel market and its long-term potential is hardly waning, as underscored by the unflagging interest not only among investors, who are always on the lookout for good opportunities to buy, but also among hotel operators, who have identified Prague as the main target of their activities. Results reported for last summer, when rules were eased for a while, signaled that the market would be able to recover relatively quickly once the restrictions are lifted. Complete recovery, however, is not expected until 2024.
European hotel market figures just published by STR for 2020 reaffirm what was obvious over the course of the year: Prague was one of the European hotel markets hit hardest by the effects of the coronavirus crisis. The year-on-year decline in average revenue per room came to 84.6 percent, with only Barcelona, Rome and Lisbon being impaired on a similar scale. The impact on Europe’s other major hotel markets was a little softer, with an average 69.7% decline in revenue per room. The main reason for Prague’s declining revenue was the 78.5% drop in the occupancy rate (to 16.6%). Another key factor was the 28.1% cut in average prices to EUR 66 per room.
“Like most other major tourist destinations in Europe, Prague relies on international tourism, which was drastically curtailed by the effects of the coronavirus crisis in 2020. In Prague, however, the fallout was greater for two reasons. During the first wave, the Czech government was among the first to impose harsh restrictions, including the forced shuttering of hotels. Then, during the post-summer second wave, the Czech Republic’s increase in cases was one of the highest in Europe, resulting in the uncompromising suspension of foreign tourism and the subsequent closure of hotels. What’s more, the Czech authorities did not follow the example set by many other countries in using local hotels to accommodate health professionals or as makeshift hospitals. All this hastened Prague’s status as one of the most devastated hotel markets in Europe. Having said that, we must remember that these are temporary factors not directly related to the tourism market, which should recover quickly once the virus has been brought under control,” commented Bořivoj Vokřínek, Strategic Advisory, Head of Hospitality Research EMEA, Cushman & Wakefield.
