Wednesday, December 23, 2009

Rough times of Prague’s travel industry continue...(crises in numbers)

Czech statistical office released the data of Czech’s incoming travel industry for the third quater (Q3). And in comparison with the last two years the incoming travel industry is still falling. The hoteliers still dont see any light in the end of tunnel. Worse yet, a full recovery for tourism is not expected until 2013 according to Euromonitor International. On the other hand crisis in travel industry has revealed new markets like “funemloyment” in USA.

The focus of this paper is to demostrate continuing crisis in Prague. The third quater was choosen as the base for comparison with previous years.

Source: Czech Statistical office, 2009

The first chat shows that number of nights in Q3 has degreased in 2009 in comparison with 2008 and the same rule is valid for number of quest in Prague; however, the crises has started before 2008, so someone could expect degrease even in the year 2008. The point is that even if the number of west travellers was already significantly degreasing the number of east travellers was still increasing. In other words the traveller from countries like Russia, Poland, Ukrajine, Romania and other coutries were still coming to Prague in higher number than in 2007. Furthermore the big impact on this paradox had the residents of Czech Republic when the number of guests (app. 43 ths.) was higher than in 2007.

Source: Czech Statistical office, 2009

The confirm the hypothesis of progressing crises this chart would be used as an example. It is very vissible that since 2006 number of quests staying was degreasing. Even if the number of quests in 2007 reached the highest value the progress of overnigh stays per guests was already decling. There may be more factors then only crises, for instance, changing travellers behaviour – Prague is becoming very popular among European cities but it is becoming also as a crossroads for other travellers. The other reason may be in the travellers who are travelling to Europe to know more than Czech Republic or Prague but also Vienna, Paris and other European cities.

Source: Czech Statistical office, 2009

The most travellers are coming to Prague from Germany, Italy, Spain, UK and US. Therefore, they were chosen as a sample for this research. The full impact of crises is seenable in this chart. On one hand UK and Spain has been it by crises at most and on the other hand German tourists has produced similar level of overnight stays within last three years in the third quarter of last three years.

Source: Czech Statistical office, 2009

The number of guests is almost in the same line as number of overnight stays. Why almost? Because in the case of Germany the number of guests is even ingreasing (remember still in Q3) since 2007; however, the number of overnight stays are at the same level and it meas that German market. It could be stated that German travellers like to spend their holidays in near Prague instead of further destinations but the crises has left the impact on them with regards to lower number of overnight stays. Furthermore Germans tend to stay in lower rated accommodation. The habits of UK, Spain, Italy or USA tourists have remained same but either the number of overnight stays or the number of guests has been degresing significatly. It the case of UK the number of guests degreased from 130 ths. in 2007 to 90 ths. in 2009.

Source: Czech Statistical office, 2009

Finally, room accupancy has confirmed our previous words of hoteliers problems. Overall in Prague room occupancy has degreased from 68% (2007) to 60% (2009) in quarter three. The five stars hotels in Prague was hit at the most. As you see, their occupancy has degreases from 72% (2007) to 53% (2009). Degrease in four stars hotels was notably lower between Q3 in 2008 nad Q3 in 2009, moreover, these hotels seems fall slower than luxury hotels in Prague.

And it is obvious that the buying power of west countries is live blood for the hoteliers. The equation of Prague’s hoteliers is:

Lower number of quests -> Lower occupancy -> Higher level of competition -> Lower prices -> Lower earnigs -> ?

Hoteliers have to react. Some degreased the prices, others cut their costs (marketing, personal etc.). They have to find new markets, worth every penny, come up with new customer’s programs becasue regular customers are worthy twice.

If the assumption of European monitor is right and they claim that full recovery will be in 2013. In other words next year 2010 (and 2011) would be the year of higher numbers in overnight stays, numbers of guests or rooms occupancy in comparison with year 2009.



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