New Study: AirBnb is Pushing Praguers Out of the City Center

At the expense of hotels, accommodation platforms in Prague are taking a growing share of the increasing business of tourists. The percentage of Airbnb platforms in tourist accommodation is increasing, and hotel owners are trying to counter this with new development projects.

Every year, three hundred thousand more tourists come to Prague. However, while the number of hotel beds has risen by 1.4 percent over the last two years, accommodation capacity via Airbnb platforms has grown by 34 percent. These results come from a study by the consulting firm Deloitte, according to which, last year Prague had available for short-term rental about fourteen thousand apartments.

“The possibility of profits through short-term housing platforms pushes people out of the city center. We expect this effect to extend farther,” said Deloitte’s property manager Miroslav Linhart.

According to Cushman & Wakefield, there are now in the capital a total of 16 hotel projects with 2900 rooms. However, only 42 percent of this capacity is being built. “Taking into account the strength and considerable size of the Prague hotel business, the planned construction is relatively modest and easily absorbed by the market. Especially when we realize that it may take many years for the hotels to be completed,” said Bořivoj Vokřínek, a hotel market specialist from Cushman & Wakefield.

According to him, an example of a complex path from the plan to the realization is the project of a luxury hotel of the Ritz Carlton chain in buildings near the Old Town Square. Builders are already working there, but the project has been under construction since 1998. However, the growth in accommodation platforms does not mean that Prague hotels are empty. “Their occupancy has been around 78 percent on average for the second year running. This percentage is a relatively high number. However, the average prices of accommodation are gradually increasing, and Prague is already close to the prices of Vienna,” said Václav Stárek, President of the Czech Association of Hotels and Restaurants.

Per room, the price for a four- or a five-star hotel in Prague in September is an average of ninety euros, and in Vienna 102 euros. Prague hoteliers year-on-year average prices increased by 2.2 percent, while the occupancy rate increased by 70 percent according to the hotel association statistics.