The capital city of Prague will conclude a memorandum with the Association of Hotels and Restaurants of the Czech Republic and Prague City Tourism. It was approved today by the City Council. m of Prague.

The city and hoteliers plan to jointly support cultivated and sustainable tourism, develop Prague as attractive for congresses, conferences or exhibitions, and promote the city abroad. The city plans to obtain the necessary funds by increasing the stay fee from the current CZK 21 to CZK 50. This is paid by the tourist himself, so this step will not have a negative impact on the wallets of Praguers, nor on the city budget.

“I very much welcome the approval of the memorandum, on the basis of which Prague will invest much more resources in sustainable tourism. However, they will not come from the money of Prague taxpayers, but from the fee for the stay, which is paid by the tourists themselves. This fee is the only tool by which Czech municipalities can directly compensate for the costs of tourism and with which they can contribute to its economic benefits. Prague, with a higher accommodation fee of 21 crowns per night, lags behind both in Europe and even behind a number of Czech cities. The increase in the fee will help the city and the people of Prague, and I am glad that we are also suitable for this necessary step with the hoteliers themselves, “says Pavel Vyhnánek, Deputy Mayor and Councilor for Finance and Budget.

For example, the parties to the memorandum plan to run regular targeted campaigns to promote sustainable inbound tourism. The image of Prague as a suitable destination for congresses and conferences will also be significantly supported. The city will also support exhibitions, fairs or other important events, whether cultural or business, which attract cultured visitors.

“We want to show the best that Prague can enter, and thus make its image a destination full of history, monuments, culture and quality gastronomy. We will be marketing campaigns for a cultured clientele, which is the greatest benefit for the city. Such a visitor does not choose his destination according to the amount of the accommodation fee, but according to what he may contain. Together with the hoteliers, we agree that the increase in the sojourn tax will not affect the attractiveness of our capital, on the contrary, it will help us increase it, “says Hana Třeštíková, Councilor for Culture and Tourism.

Tourism in the capital employs more than 100,000 inhabitants. Selected taxes and their subsequent redistribution, however, within the so-called budgetary determination of taxes are not related to regions and their economic activity. Thus, although tourism is a component of the Prague economy, Prague receives only a fraction of the revenues that flow from tourism to public budgets.

“Prague has historically accounted for more than sixty percent of the volume of tourism in the Czech Republic. We are very happy that together we managed to find a way to systemically finance tourism support. It is also good news for the inhabitants of the city and the Prague entrepreneur, who in many cases are economically directly or indirectly dependent on the development of tourism, “comments Václav Stárek, President of the Association of Hotels and Restaurants of the Czech Republic.

The residence fee, which is the only one in the field of tourism direct income for municipalities, represents a unique opportunity to gain access to funds that will be invested back in the development of sustainable tourism with high added value and building Prague’s image as a cultured and attractive destination. The fee is paid for each night by a self-service facility in a Prague accommodation facility for a short-term stay not exceeding 60 days.

“Due to the budgetary determination of taxes from the city’s point of view, in the long run that expenditures in tourism exceed its revenues. This difference is intended to alleviate the increase in the residence tax. In addition, with this step we are fulfilling another of the points of the new Concept of Inbound Tourism. We will use part of this income to cultivate tourism and we will be able to better prevent its negative effects, “adds František Cipro, Chairman of the Board of Directors of Prague City Tourism.

The Act on Local Fees allows for an increase in the rate of the residence fee from CZK 1 to CZK 50 from 1 January 2021. This possibility has already been used, for example, by Český Krumlov, Františkovy Lázně or Valtice, ie municipalities that have a few orders of magnitude smaller volume of tourism than the capital.

In other European cities comparable to Prague, the amount of these fees ranges from two EUR and the cities use this income, for example, for infrastructure development or tourism support. Prague would like to approach the European standard of accommodation fees.

Based on the memorandum, a draft amendment to the Prague Decree on the local residence fee was prepared, which will now be sent to the comment procedure. After settling the comments, I will deal in the coming months with how the City Council. m of Prague, and subsequently the council. If they give the representative proposal the green light, the new fee rate will apply from the beginning of 2022.

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