Prague Hospitality and Tourism - Statistics Project Example

Prague Hospitality and Tourism Executive Summary This report addresses the hospitality and tourism sector in Prague. It contains an overview of the market using a table that addresses accommodations, attractions, amenities, accessibility, activities and ancillary services, along with an analysis of the public, private and voluntary sector roles and responsibilities. In addition, this report delves into a plan addressing an approach to alleviating the shortage of hotel rooms in the city that has been attributed to its high occupancy rate, and shortage of hospitality labour in a market where higher wages are being offered due to a limited labour pool in other industries. It was found that Prague has the necessary public, private and voluntary resources to meet these challenges however it is the private sector that will ultimately solve the problem through more hotel rooms and increased training opportunities. The approach to these issues used principles gathered from the works of Fletcher et al (2013, p. 22) where they defined tourism as a concept represented by individuals moving “… between different geographical locations for any purpose and any duration”. Fletcher et al (2013), along with Cook et al (2014) both point out the role of markets in addressing their particular issues as these relate to the importance of attractions, services and the cooperative climate of the public, private and voluntary sectors in addressing the challenges of their market. These aspects, along with the challenges facing Prague represented the analysis and basis for recommendations. Table of Contents Task 1 4 Task 2 6 Task 3 7 Conclusion 11 References 12 TABLES and FIGURES Tables Table 1 - Tourism Overview - Prague 4 Table 2 - Prague Occupancy Rate 9 Table 3 - Prague Hotel Planning Recommendations 10 Figures Figure 1 - Czech Republic Tourism Arrivals 8 Task 1 The following table provides an overview of the market: Table 1 - Tourism Overview - Prague Category Definitions Examples Overview Accommodations Prague is the largest city in the Czech Republic and the historical capital of Bohemia (Saver, 2016). It has a large array of accommodations that range from 1 through 5-star hotels, along with budget, boutique and moderately priced establishments (Jenckova and Abrham, 2017). The city is ranked as the 10th best locations to visit in Europe, preceded by the Swiss Alps and followed by Athens on a list compiled by U.S. News & World Report (2018). Its accommodations are among the best of any top destinations in Europe with a 4.51 ranking out of 5.00 (Kongres Magazine, 2018). Attractions The following represents what is termed as must-visit attractions (Trip Advisor, 2019): 1. StaromEstske nam, founded in the 12th century. 2. Church of Our Lady Victorious 3. Prague Castle The city is ranked as the fifth most visited city in Europe for attractions after London, Paris, Rome, and Istanbul (World Atlas, 2018). Amenities Amenities include the outlook and receptivity of the people of a country that provide a feeling of hospitality, friendliness and service delivery (Buhalis and Amaranggana, 2013). The perception of foreigners by the locals is warm and welcoming (Prague Guide, 2018). This translates into the broad arrange of different types of restaurants, cabs, sightseeing and nightlife that is ranked eighth in Europe (Prague TV, 2018). Accessibility Prague is usually accessed by plane or train, and via bus or car from closer destinations (Civitatis Prague, 2018). The city is served by Airport Prague, the Hlavni main train station, and via bus at the Florenc Bus and Metro Station (Prague Guide, 2018). Activities One of the best ways to see the city is via one of its many tours in many languages. The city has guided tours via helicopter and balloon, water cruises, sailing, cultural and theme tours, day excursions and ample nightlife (Trip Advisor, 2018). Ancillary Services This refers to services such as parking, tickets, chauffeur, foreign exchange, ATM availability, and related areas (Quora, 2017). To rate this area, the following information using the cost of living to gauge amenities (Our Big Fat Travel Adventure, 2017); 1. Accommodations – Apartment at £19.73 per night 2. Food - £25for two. 3. Beer - less than £1 4. Rental car - £98.40 for to days (Saver, 2016; Jenckova, 2017; Holiday Lettings, 2019; News & World Report, 2018; Kongres Magazine, 2018; Trip Advisor, 2019; World Atlas, 2018; Prague Guide, 2018; Buhalis and Amaranggana, 2013; Prague TV, 2018; Civitatis Prague, 2018; Prague Guide, 2018; Trip Advisor, 2018; Quora, 2017; Our Big Fat Travel Adventure, 2017) The above aspects have created an oversupply of tourists to the city that has risen to over 10 million visitors in 2017 from 6.5 million in 2009 (Knoema, 2018). This has caused an inflationary spiral on wages in other sectors and a shortage of hotel rooms (Kleyn, 2017). Whilst residents are friendly, the recent increases in tourists have caused questions on the sustainability of the sector as well as increased scrutiny of tourist behaviour that caused Dumbrovska (2016) to write an article titled “Urban Tourism Development in Prague: From Tourist Mecca to Tourist Ghetto”. It was found the norms for the city conform to generally accepted tourist behaviour accepted in the liberal markets of Europe that represents tolerance and acceptance of differences (Expats, CZ, 2010). Task 2 The public sector's role in hospitality and tourism represents the first aspect of the public, private and voluntary arena as it sets policies, support and related areas that guide the market (Andersson and Getz, 2009). It (the public sector) seeks to utilise tools such as infrastructure planning (transport upgrades for airports, rail and roads), along with tax abatement plans for hospitality sector investment, crafting of overall tourism policies and direction for the country and regions along with promoting private and voluntary sector involvements and VAT rates (Deloitte, 2009). In the instance of Prague, the hospitality and tourism sector contributes almost 60 percent of the city’s overall income (with aircraft engines, diesel engines, refined oil products, electronics, chemicals, food, printing, automobiles, etc. representing key economic sectors) (Prague.com, 2018). In a telling statement, Linhart, a partner in the Deloitte Czech Republic in Prague stated: “In terms of economic benefits, improving the tourism infrastructure is more important than increasing the raw numbers of tourists, as better infrastructure will result in wealthier tourists and longer stays” (Deutcher, 2018, p. 1). The main public agency that coordinates hospitality and tourism for the Czech Republic (and thus Prague) is the Czech Tourism Authority that operates under the Ministry for Regional Development (Czech Republic, 2017). These two agencies “… promote the Czech Republic in the respective markets, build brand awareness of destinations and stimulate the volume of arrivals of foreign visitors to the Czech Republic” (Czech Republic, 2017, p. 1). The private sector represents the actualisation of tourism policies directed by the government. The actors represent airlines, tour agencies, hotel and restaurant chains that invest in facilities and train workers as well as the thousands of local small businesses (Mukherji, 2018). The private sector works with the Czech Tourism agency that is a mixture of public and private resources since it aids in forging a closer execution of national and regional plans with the private sector (Czech Republic, 2017). Whilst large hotels and restaurant chains run their own campaigns, the usual practice is to mesh parts of the spending with the government Czech Convention Bureau (2018) and the Tourism Institute of the Czech Republic (Czech Republic, 2018). An important example of this public/private collaboration is the International Business Council that consists of large hotel and restaurant chains that work with the Czech Confederation of Commerce and Tourism (International Business Council, 2018). The Czech Confederation of Commerce and Tourism is the top voluntary and independent organisation in the country that includes associations, federations, independent smaller businesses, and tour companies to provide them with a coordinated voice (International Business Council, 2018). Another example of voluntary participation in the Association of Travel Agencies of Czech Republic that is a voluntary organisation consisting of travel agencies, transport companies, insurance, travel trade fairs, information technologies, as well as advertising agencies and PR firms (Expats, CZ, 2018A). It is active in the Czech Republic as well as foreign countries to promote tourism and devise promotions and packages that benefit large as well as small businesses. Task 3 In terms of tourism arrivals, the Czech Republic has rebounded strongly from the lull caused by the 2007 recession that negatively impacted the sector until 2009: Figure 1 - Czech Republic Tourism Arrivals (Knoema, 2018, p. 1) The recession caused a pullback in planning for major chains in Prague caused by restricted lending from banks (CEE Hotel Market Snapshot, 2015; Martin and Isozaki, 2013). Termed as hibernation strategies, hotel planning for new facilities retreated sharply (Martin and Isozaki, 2013). The issue of occupancy rates means when the figure is above 70 percent a market is said to have a dearth of supply (Alonso, 2017; PriceWaterhouseCoopers, 2016). Table 2 - Prague Occupancy Rate (Statista, 2018, p. 1) The Prague tourism and hospitality sector has been dealing with a major skill shortage represented by maids, cleaners, chefs and other positions (Expats.CZ, 2018B). One of the reasons is the limited labour pool has caused a dramatic rise in the demand for workers that has caused an increase in wages to attract personnel (OECD Ecoscope, 2018; Johnstone, 2018). The above problems, high occupancy rate, need for more facilities, hospitality sector labour shortage, and higher pay mean the private sector will have to invest in more hotel rooms. The following represents the hotel planning process and fitting in the above aspects to guide a solution to hotel room shortages in Prague: Table 3 - Prague Hotel Planning Recommendations (The hotel type is a 2 to 4 start facility of 200 rooms) Months (in 4-month intervals) Notes: Legend: Green indicates the preferred schedule, Red is potential time allotment overrun. The following explains nuances in the planning process: (Mitra and Tan, 2012; Martin et al, 2006; Gatti, 2012) The above planning process timeframe includes construction time as there is an overlap in terms of the need to find, hire and train staff. The plan represents a dual approach to planning the facility and planning hiring practices that include training, classes and other aspects in order to address the skills shortage. Conclusion Prague represents a vibrant tourism destination that has recently become a victim of its own success. Its list of attractions, accessibility, and amenities has caused a tourism boom where its occupancy rates have resulted in the need for additional hotel rooms. The high wages paid in other sectors of the economy has caused a situation where people are prone to rejecting low wage hospitality sector jobs thus contributing to the shortage. This report has uncovered the private and voluntary sectors will need to address job training as well as find a means to increase wage scales for the sector to provide the personnel to service the hotel rooms that need to be added to the city’s inventory. References Alonso, E. (2017) 2018 hotel forecasts: increasing demand, limited supply growth. (online) Available at (Accessed on 25 March 2019) Andersson, T., Getz, D. (2009) Tourism as a mixed industry: Differences between private, public and not-for-profit festivals. Tourism Management. 30(6), pp. 847-856. Buhalis, D., Amaranggana, A. (2013) Smart tourism destinations. Information and Communications Technologies in Tourism. In: Xiang Z., Tussyadiah I. Information and Communication Technologies in Tourism. London: Springer. CEE Hotel Market Snapshot (2015) Prague, Bratislava and Budapest back on track? (online) Available at (Accessed on 25 March 2019) Civitatis Prague (2018) How to get to Prague. 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