Despite criticism, Prague has doubled hotel fees. He wants to use the money to support tourism
Tourists in Prague have been paying for accommodation since the New Year. The administration of the capital is increasing the tourist tax, which must be paid in addition to the price of each night spent in the hotel, from 21 to 50 crowns. Prague representatives approved it on Thursday, the metropolis wants to get more money to support tourism. Fee in previous years also other Czech cities. Some, on the other hand, temporarily canceled it during the pandemic.
The municipality plans to put half of the amount it collects from higher accommodation fees into a new budget fund for the main tourism. Representatives of the municipality signed a memorandum on this in November with their company Prague City Tourism and the Association of Hotels and Restaurants of the Czech Republic. This Thursday, Prague representatives approved an increase in the fee from 21 to 50 crowns.
The money is also to be used for a promotional campaign Prague as a tourist destination, such as the current one focused on the autumn and advent season. The President of the Association of Hotels and Restaurants of the Czech Republic, Václav Stárek, previously stated that the previous campaigns worked, so the current one will also be very successful according to the figures so far.
According to Deputy Mayor for Finance Pavel Vyhnánek (Praha Sobě), the city collected almost 300 million crowns in fees before the pandemic. However, during the coronavirus crisis, the amount was radically reduced due to the reduction in tourism, and the city also waived the fees last year.
Pilsen and Olomouc, for example, also waived the “surcharge” for accommodation during the pandemic. “The city is not collecting a tourist tax this year and will not be collecting it in 2022 either. I am trying to reduce the impact of the coronavirus on accommodation facilities,” confirmed Radka Štědrá, a spokesperson for the Olomouc Municipality, to the online daily Aktuálně.cz in November. The amount previously hovered at 21 crowns.
Český Krumlov and Vary increased the fee
A number of Czech cities have already been added in the past, including Český Krumlov, Františkovy Lázně, Karlovy Vary or Ústí nad Labem.
For example, Karlovy Vary originally planned to increase the fee to 50 crowns only for stays of up to four days. Operators of accommodation and spa facilities pointed out that it is difficult to account for the above in operational and accounting software. After criticism, the city finally increased the fee across the board to 35 crowns starting this September.
According to the spokesman of the local municipality, Jan Kopál, it is not yet possible to say whether a higher selection will help Karlovy Vary tourism recover after the pandemic. “But it definitely won’t help to heal the financial wounds, at least this year. The fee is only paid by people who stay in the city, and there are still much fewer of them this year than before the pandemic. What is missing in particular are foreign guests,” explained Kopál.
“To give you an idea – in 2019, we collected 30 million crowns from similar fees, last year less than 15 million, and this year, one month before the end of the year, we have collected 16 million crowns from residence. In the draft city budget for next year, it is expected to collect 13 million crowns, but that is very conservative expectations given how much was actually collected a few months ago, when the budget began to be prepared,” added Kopál.
The spokesman therefore assumes that the increased rate of the fee can have a positive effect on the financing of tourism, when the former clientele returns to the city and, at the same time, new visitors. “Those who are interested in UNESCO monuments – Karlovy Vary was registered this year, together with other European spa towns, as Famous Spa Cities of Europe on the World Heritage List. Then, perhaps, the increase in the fee will be reflected in favor of the selection,” believes Kopál.
A symbolic fee
An amendment to the law from 2019 allows cities to increase the accommodation fee up to 50 crowns. According to a document approved by the Prague council in October, the current rate of 21 crowns (roughly 0.8 euros) in Prague is too low. For example, in Barcelona it is 1.1 euros (28 crowns), in Vienna 2.1 euros (54 crowns) and in Budapest 3.2 euros (82 crowns).
Deputy Vyhnánek is not afraid that increasing the fee could discourage tourists from visiting. “The fee is currently really symbolic, it is the lowest compared to comparable cities not only in Europe. There are even a number of Czech cities that have significantly higher fees,” he said.
Criticism from hoteliers
The increase in the fee that Prague is planning, however, has caused criticism among some Prague hoteliers. “It can be expected that the return of tourists will be rather gradual next year. So they considered it reasonable for Prague to postpone the plan until at least the middle of next year, when it will be clear how the situation will develop,” said Ave Hotels marketing director Marek earlier Robin.
In response to the current pandemic situation, which he thought was reasonable, he postponed the rate hike until at least the first quarter of next year.
The director of the hotel network Orea Hotels & Resorts Gorjan Lazarov said about the plan of the Prague municipality that “relevant persons” should rather think about supporting the industry, which is facing the biggest crisis in recent years and there is great uncertainty in it. “Increasing the fee at a time when the hotel industry is going through the biggest crisis in recent years, I do not consider happy,” he said.
Marketing Director of Czech Inn Hotels Petr Chábera the timing of the fee increase for completely inappropriate chains. “We would also like to know how Prague wants to use these funds effectively. The hoteliers should consult with us,” says Chábera.
However, Vyhnánek emphasized on Thursday that the capital discussed the fee increase with representatives of the entire tourism industry. He also responded to the criticism of Ondřej Prokop, head of the club of the opposition movement ANO, according to whom the fee increase is not a bad step in principle, but the timing is not appropriate with regard to the situation of tourism in the metropolis. However, Vyhnánek believes that a fee in the amount of, for example, one small beer will not negatively affect the number of visitors.