Eastern Europe

Travel Slowdown Bites Prague


Even for the twilight of winter, the Czech capital seems quiet these days.

Now's the time of year when the tourists who in spring and summer crowd the narrow streets of the Old Town start returning to the city as the pall of gray that falls over Central Europe in October begins to break. This year, though, the winter tourist exodus has felt sharper, and the spring resurgence – however nascent at this time of year – milder.

Indeed, spring is making a timely appearance. (This, of course, is relative in Central Europe, where just seeing the sun before April has Praguers text-messaging friends, lovers, and mere acquaintances to praise their good fortune and plan an imminent trip to the beer garden.) But Prague's downtown still feels largely vacant, almost eerily so given that the city – among Europe's most popular tourist destinations – is usually starting to bustle about now.

It's not just a feeling. As with other sectors of the Czech economy, the global financial crisis is taking a toll on the tourism industry. Already struggling as the Czech crown's rapid appreciation last year made Prague a considerably more expensive destination, the industry, which accounts for nearly 3 percent of Czech GDP, is taking a further hit as Britons, Germans, and Americans forgo travel in these lean, insecure times.

Travel "is one of the first [areas] where people want to save money," said Marketa Chaloupkova, a spokeswoman for the state's inbound tourism agency, CzechTourism. "We saw the impact of the crisis in the last quarter of 2008."

In that period, Czech hotels and pensions accommodated 7.5 percent fewer guests year-on-year, according to the agency. Another recent survey of restaurants, hotels, souvenir shops, and travel agencies by the Association of Czech Tourism Offices and Agencies reported a 30 percent drop in cash sales among these businesses last year compared with 2007. In the first two months of 2009, revenues were 35 percent lower than in the same period of 2008, the survey reported.

Pensions and camps, in particular, are hemorrhaging, with 2008 occupancy rates down 34 percent and 12 percent, respectively, according to CzechTourism. Hotels are also struggling.

DESPERATE MEASURES

Since the beginning of the year, one local English-language publication has seen several of its four- and five-star hotel clients cancel or reduce their subscriptions, all saying they had to cut costs as the financial crisis devastated occupancy rates. Asked whether the crisis had hurt business, Robert Zwinz, resident manager of the Andel's Hotel in Prague's Smichov district, said, "Absolutely. We saw it start going backward as of autumn last year."

Zwinz said the crisis has hit the hotel's lucrative corporate conference business particularly hard. He estimated Andel's is hosting 25 percent fewer conferences now than last year. Leisure travelers are also staying away: the hotel had nary a room available for Easter weekend by early March 2008 but is hoping for last-minute bookings this year.

What can hotels or pensions or restaurants do? They're not sitting on their hands, and the crisis has even inspired a bit of daring. Earlier this year the upscale Prague restaurant U Petrske veze tried attracting increasingly thrifty customers by implementing a system whereby diners could eat and then pay what they felt the meal was worth. This system has had success in London and Seattle recently, but it flopped in the Czech capital: people were walking out without paying, and the restaurant abandoned the scheme after a week.

Andel's Hotel is offering regular clients cut-rate prices, has introduced new loyalty programs, and, in a laudable if desperate act of self-improvement, has laid new carpets to keep up appearances in these tough times.

Whatever hotels or restaurants try, reality is people won't start traveling again until they can pass a night without wondering whether they'll still have a job the following day, even with the Czech currency taking a tumble in recent months. The tourism industry will just have to ride this one out.

Andel's Hotel's Zwinz, for his part, seems to recognize this, and that 2009 will be rough.

"Generally speaking," he said, "when you hear the [bad] news – which you get more and more – we're not very optimistic right now."

Provided by Transitions Online—Intelligent Eastern Europe


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