A new study from PwC predicts that small and midsize businesses based in Prague will suffer a reduction in turnover of between CZK 250bn and CZK 580bn for the 12 months between March 2020 and February 2021. This covers a range of outcomes, including a rapid relaxation of restrictions and a return to normal life to a pessimistic look at the impact of a second wave. The study focuses on Prague primarily because companies in the capital city contribute roughly 26 percent to the overall gross domestic product of the Czech Republic. The biggest hits will be to the city’s accommodations, restaurant, cultural, entertainment sectors along with personal care businesses (like beauty salons, massage parlors, saunas and the like).
“Prague produces 60 percent of the tourism business in the Czech Republic,” Václav Stárek, head of the Association of Hotels and Restaurants told the daily Lidové noviny. “We estimate that 80 percent of this is made up of foreign tourists. That is why Prague is the most endangered region. For many companies this could be fatal.” He warns that one in 11 Czechs works in businesses connected to the tourism sector. The economist Petr Zahradník thinks this view is too fatalistic, predicting that the economy will be back, rolling along at 2020 levels by 2022. “The study took the worst possible period,” he told Lidovky.cz. “If it ends in March 2021, it misses the development that will follow. If there’s no [second wave] it should be very hopeful and there should be positive development in the shape of a V.”
