Czech Republic Tourism Report Q1 2013

BMI’s Czech Republic Tourism Report examines the recent performance of the tourism sector and looksat its potential over the period to 2017. The forecasts are largely based on a grim outlook for theeurozone, which is the key source region. The report considers data on the number of guests andovernight stays in the hospitality sector (and spa sector), including domestic tourism, which accounts forabout a half of all guest nights. Source markets are analysed, revealing that the sector faces less interestfrom a number of important traditional source markets.

Latest preliminary figures for Q212 show 2.6% year-on-year (y-o-y) growth in foreign tourist arrivals inthe hospitality sector, which was down substantially compared with growth in Q211 (although the mostrecent data imply downward adjustments to Q211 figures). Growth in Q212 was also much weaker thanthat recorded in the first quarter of 2012. Overall, during H112, foreign and domestic tourist arrivals wereup 7% and 5% y-o-y respectively.

Preliminary data for Q212 show a weak performance in total overnight stays in all accommodationestablishments, which were largely unchanged year-on-year. Although foreign tourist nights were up1.6% y-o-y, nights attributed to domestic residents declined 1.5%. In H112, however, the hospitalitysector performed somewhat better, with total overnight stays up by a reasonable 4% y-o-y, largely due toa 6% increase in non-resident nights. Growth in arrivals from Germany and Russia – the two key sourcemarkets – during the first half of 2012 was very different, at under 3% and over 28% y-o-y respectively.

Of note, there was strong growth in arrivals from the US (+17% y-o-y) over the same period. Nonresidentguests in the spa sector, meanwhile, fell marginally in Q212 y-o-y, while resident guests rose3.5%.

Over the last quarter BMI has revised the following forecasts/views:

BMI’s outlook for total visitor arrivals in 2012 has been edged down to just under 3% (from4.3% previously). We anticipate some recovery in 2013 although growth has also been reviseddown slightly. Somewhat stronger growth is anticipated in the latter part of the extended forecastperiod to 2017.

Weakness in the tourism sector is clearly evident from the latest data from Prague RuzyneAirport, which show total and international traffic down nearly 9% y-o-y in the first sevenmonths of 2012. Domestic passenger numbers – although relatively very small – also fell amassive 32%.