REAL ESTATE NEWS

Hotel Industry in the Times of Crisis

With the current state of affairs in the global economy, it is quite surprising to find new boutique and luxury hotels popping up all over the place.

The age-old business of tourism was blossoming in the Czech Republic for many years after the fall of communism, but unfortunately it seems that the golden age of development is over for the time being. The business of tourism goes hand in hand with the building of hotels and in this aspect; Prague hasn’t slowed even a bit which seems strange given the current state of affairs.

An example of this hotel boom is the Buddha-Bar, a longtime Parisian establishment that has locations worldwide, has opened not only its famous Buddha-Bar, but also a boutique hotel in the lovely center of Prague. Among other luxurious hotels that opened their doors in Prague in the recent past are the five star Hotel Kempinski, known world round, the intimate At the Three Storks five star boutique hotel, and the worldwide chain Sheraton.

The question stands: how come so many luxury chains of hotels and private luxury Boutique hotels are still opening? The answer seems to be very simple: too much optimism from the investors in the years passed. The fact is that the economic recession has decreased the income of the hotels by almost one third compared to the spring of 2007, many hotels (especially the luxurious ones) are half empty and are forced to offer their rates at a 60 percent discount. Hotels are, however, not the only victims of tougher economic times: the restaurant industry has also been hit hard with over 40 fine dining establishments going under in Prague. The only advice for hotel and restaurant owners seems to be: offer a product that will attract customers even in the times of crisis and be flexible.