Jones Lang LaSalle Hotels

Despite a competitive hotel environment, hotels in Prague have witnessed a 6.3% growth in RevPAR in 2012 bolstered by a robust growth in inbound tourism. In 2013, we anticipate continued growth in trading performance due to a slowdown in supply growth and further interest in foreign tourists.

As at December 2012, hotel supply in Prague consisted of approximately 341 hotels and 26,400 hotel bedrooms. The city is dominated by upscale hotels, with 4-star and 5-star establishments representing roughly 52% of the entire hotel bed stock. This hotel segment saw considerable growth between 2000 and 2010 and as a consequence has become very competitive. Development activity has been subdued and many projects face funding difficulties. Hotel supply is expected to remain stable over the next 2 years.

Despite growing economic difficulties in Europe, Prague's tourism industry remained robust in the first 9 months of 2012 with arrivals and bed nights increasing by 7.7% and 5.6% respectively, when compared to year-to-date September 2011. Growth was driven by a buoyant domestic market and a strong increase in international arrivals, accounting for 90% of overnight stays, particularly from emerging markets including China (+20%), Brazil (+22%), Russia (+22%) and other Asian source markets.

Angus Wade, Executive Vice President Hotels & Hospitality at Jones Lang LaSalle commented: "The competitive hotel environment in Prague, especially in the upscale segment, has made a quick recovery very challenging. The market is still suffering from the significant supply growth in recent years that has made it very difficult for hotels to raise their room rates despite an increase in demand. Moving forward we believe trading performance will continue to improve on the back of robust growth in tourism arrivals which should lead to a rise in occupancy and average room rates."

Angus continued: "The hotel market is expected to benefit from growing demand from emerging markets. Eastern Europe, Asia and South America, in particular, have evolved into dynamic new source markets that are anticipated to become more influential in the coming years. The city benefits from a wealth of cultural and historical attractions that will appeal to many overseas visitors. What will also support trading performance growth is a significant slowdown in supply growth which will allow hoteliers to become more confident in growing room rates in the short to medium term."

About JLL

For over 200 years, JLL (NYSE: JLL), a leading global commercial real estate and investment management company, has helped clients buy, build, occupy, manage and invest in a variety of commercial, industrial, hotel, residential and retail properties. A Fortune 500® company with annual revenue of $20.9 billion and operations in over 80 countries around the world, our more than 103,000 employees bring the power of a global platform combined with local expertise. Driven by our purpose to shape the future of real estate for a better world, we help our clients, people and communities SEE A BRIGHTER WAYSM. JLL is the brand name, and a registered trademark, of Jones Lang LaSalle Incorporated. For further information, visit jll.com. 

Natasha Southwick
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JLL