The number of hotel guests in central and eastern Europe is falling, and hotel owners are raising prices. According to the international consulting firm CB Richard Ellis (CBRE), hotel occupancy rates in 2008 fell by 6.7% year on year, and average room rates have increased by 7.4%.
The price increase does not apply to Prague, however. While there was positive price growth at the beginning of 2008, in the second quarter the Czech hotel industry began to feel the impacts of the cooling of western economies, in combination with the strong crown at the time. “From August the decrease in occupancy rates and the decrease in prices led to a drop in profits by more than 11%,” said Martin Thom, the director of CBRE’s hotel section. Only Bucharest experienced a similar drop.
In spite of this, competition will grow stronger. Prague this year will have 800 new hotel beds, which is a bigger increase than in any other city in central and eastern Europe. There will be a new Sheraton hotel Karlovo náměstí, Rocco Forte at Malá Strana, King’s Court at náměstí Republiky. And Park Inn at Pankrác. The following year there the luxury chain Sofitel will open a hotel at Národní třída and Le Meridien at Senovážné náměstí. “The stricter conditions for obtaining bank loans could mean that some of the planned projects will be delayed,” notes Thom.
According to a poll conducted by the international site Hotel.info, Prague is the third in the world when it comes to the quality of hotel services. Tokyo ranks first, and Lisbon is second. The poll rated three and four-star hotels.
The hotel market in Bratislava also showed poor results, according to the CBRE analysis. Hotel profits per room fell by 8%. Problems with financing also meant that a number of projects have been cancelled or postponed.
Vienna, on the other hand, fared quite well. But analysts not that the positive results were helped by the European football championship, which led to a price increase i June by 63%. The hotel champion of the region was Warsaw, where profits grew by nearly 8%. Only Zurich and Geneva, which hosted Euro 2008, could compete with Warsaw in this respect. Warsaw can be optimistic about the future as well because it will be hosting the European championship in 2012.
