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December 2012: less clouds over the Czech Republic

In December, hotel activity in the Czech Republic did well, achieving 4,6% RevPAR growth despite a difficult economic context and preparations for presidential elections. Hoteliers benefited from year-end festivities, particularly in the capital where the Christmas markets were displayed all over the Old Town.

In 2012, the Czech Republic saw its economy slow down with a GDP estimated at 156 billion dollars, versus 152 billion in 2011, and unemployment up to 7% versus 6.7% the previous year. Its new president, Milos Zeman, elected last January 26, is thus expected to take action in the area of economic recovery. In a depressed context, there is nonetheless a glimmer of hope for hoteliers in the country in light of activity indicators for December 2012. The increase in average daily rates at hotel chains compensated the drop in occupancy rates, particularly in the upscale category. In the month of December, average daily rates climbed to 77.9 euros, or 8.8% more than last year during the same period, whereas occupancy rates experienced a new 2.1 point drop, to 52.9%, mainly due to overcapacity problems that have been affecting the market for several years. The Revenue per available room (RevPAR) for the country is thus 44.8 euros, versus 42.8 euros last year. It comes as no surprise that hotel results in the capital drove results up throughout the country, thanks in particular to the Christmas markets that invigorated Prague throughout December. During this period, all indicators for the chain hotel industry are in the green. OR and average daily rates show respective increases by 1.1 points and 12.9% to reach a RevPAR close to 63 euros (1,622 Czech crowns), or 14.6% more than on the same period in 2011.Activity in December confirms the trend observed over the last twelve months. RevPAR lept by 5% on the period, driven by the 7% increase in average daily rates that made it possible to compensate for the 1.2 point drop in occupancy rate. Sector professionals have also noticed an increase in number of clients at hotels in 2012, which reached the record figure of 13 million (including 7 million foreigners), or 8% more than the previous year. Once again, hoteliers in the capital recorded the highest occupancy rates.

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