Overtourism: a case study in Prague

Features
Overtourism: a case study in Prague

Overtourism is a problem for many popular meetings destinations to wrestle with. In this month’s cover feature, CMW presents an edited extract from research by Miroslav Rončák, Palacky University, Olomouc, on overtourism in the Czech capital. 

The number of tourists arriving in Prague has been increasing steadily. Back in 1989 there were 1.6m tourists arriving in the Czech capital. In 2000 the figure was 2.6m and in 2017 as many as 7.6m, according to figures from Prague City Tourism.

A Euromonitor study (2017), noted Prague had become the fifth most visited destination in Europe, after London, Paris, Rome and Istanbul, and experts are predicting further growth.

The accommodation offering via Airbnb has increased in particular, with over a million tourists booking their accommodation in the Czech Republic via Airbnb, many more than in the neighbouring countries of Hungary, Poland or Slovakia.

There is a growing interest in travel, in general of course and the popularity of city tourism is rising in particular. The social media boom and the concept of the shared economy and the expansion of low-cost companies are all driving this ‘evolution’.

Tourism has, of course, brought economic benefits for Prague over the last 25 years, but even back in 1995 there was a high tourist concentration in the historical centre.

The state has been loath to interfere with the market and increasing tourism revenues have led to uncontrolled development of tourism in Prague’s historic centre, which has evolved into a tourist ghetto. Although local residents by and large do not have a negative attitude towards tourists, the direct and indirect effects of tourism development have begun to constrain their quality of life.

Real estate prices have also been rising fast in the centre and taxi drivers have been protesting the lack of regulation and what they perceive as unfair competition from Uber, Taxify and Liftago.

The holding of the Congress of the International Congress and Convention Association (ICCA) in Prague in 2017 was a big marker for the Czech conference market, of course. But how many delegates inched along Charles Bridge during their out of hours tours?

The tourism boom would certainly have been unimaginable without the development of air travel and the entry of low-cost airlines into the Czech market.

Low cost carriers initially helped turn the city into a capital of ‘stag and hen trips’ bringing a rise in hooliganism and making certain areas off-limits to locals.

Prague Airport is struggling with its own limits. While in 2017 a record number of 15.4m passengers checked in, a further increment of 1.5m passengers is predicted for 2018 –  already the estimated capacity of the airport.

Prague City officials have said they do not want the capital to be a mass tourism destination. Their stated aim, rather, is not to increase the number of tourists, but to focus on more affluent and sophisticated target groups, including congress tourism, so that stays are extended and visits repeated. City efforts are to be directed into improving services and the personal experience of visitors.

There are of course historic reasons why Prague’s centre went through a more violent commercialisation following the Velvet Revoluton. Restitution policies tended to lack any strategic planning and the tourist infrastructure required major investments to keep up with the growing numbers, not to mention the renovation works needed by the city centre’s buildings.

Most metropolises are much larger than Prague or have a larger centre where tourists can be more spread out.

The historical part of Prague is made up of very narrow streets in a relatively small area and in terms of concentration of tourist numbers, Prague markedly outdoes the competing destinations of Vienna, Berlin or Budapest.

The situation is particularly alarming in the summer months and Easter holidays on what is known as the Royal Way, a 2.4 km route connecting the most remarkable sights in Prague on both sides of the river Vltava.

Prague residents are generally not against tourism, but perceive the negative impacts of ‘touristification’ as a consequence of mismanagement by the local authorities.

Pressure is on the municipal government from the civil society to face the challenges of tourism-related development in the historical centre of Prague with more regulation and strategic planning.

Lack of regulation also brings problems with the sharing economy. According to Airbnb, guests spent €324m in the Czech Republic last year. However, the state is missing out on 460m Czech crowns annually on taxes related to ‘concealed rents’ in the capital.

Local estimates say 80% of the real estate units offered through the Airbnb platform do not represent the usual sharing economy, but the normal entrepreneurial activity, which should be subject to taxes. While only 1.56% of users in 14 EU cities simultaneously offer 5 or more accommodation units (Coyle and Yu-Cheong Yeung, 2016) more than 7.4% of the users in Prague rent the same number of units.

The problem is not just about not declaring taxes and fees. Living with Airbnb platforms can be problematic for residents. Visitors often do not respect the quiet hours in the night and bring extra litter. The City Hall of Prague 1 area registered 250 complaints concerning rentals of flats in the first three months of 2018 via Airbnb.

On 12 September 2018, the government approved a draft amendment to a law that will make accommodation fees, which are payable to municipalities, also apply to private accommodation from 2020.

The Minister of Finance’s Alena Schillerova has said providers who offer their accommodation using the Airbnb platform have an advantage over hotels or guesthouses, which have to reflect local accommodation fees in their end prices.

Prague City Tourism has also been pro-active in finding solutions to overtourism. Firstly, in promoting less well-known pedestrian trails to redirect visitors from what is known as the Royal Way and focus on other interesting places in the city.

A brand-new Prague Card in the form of a mobile application should be available at the beginning of April 2019. It is designed not only to offer discounts for city visitors but also to help monitor the behaviour and movement of tourists. It should improve the process of predicting potential overcrowding of the city centre during the summer months.

Prague City Tourism also participates in the Hotel Night initiative every year. Organised by Czech Association of Hotels and Restaurants and their partners, the idea is to offer local residents a chance to experience hotels in their neighbourhood at reduced prices, as a way of thanking Prague residents for putting up with the occasionally less than pleasant living conditions caused by mass tourism.

In summary, we can say that Prague has been transformed in a relatively short time from a developing destination of the former Eastern Bloc into one of the most visited metropolises in the world.  The city, however, was not prepared for such a transformation of its historical centre and an increase in the number of tourists. Local authorities acknowledge they not take enough necessary measures to prevent the negative impacts of this tourism.

Now signs of progress are apparent. Prague understands its capacities and is no longer focusing on numbers but on the quality of the services offered and on providing an optimal and unique experience for its visitors.

Attractive tourism is one of the six key areas of the approved Strategic Plan of the Prague City Smart Concept 2030 (Deloitte Ceska Republika, 2014).

Prague City Tourism aims to use 3D technology and augmented reality as a tool to decrease overtourism and promote the locations less frequented by tourists. Through the ‘I Have an Idea’ campaign, local inhabitants also have an opportunity to design new things that will help improve the quality of life in their city.

However, Prague has not won yet. Airbnb and Uber services have not been regulated yet and neighbours still complain and taxi drivers organise protests.

Real estate prices are rising as will the numbers of incoming tourists in the future.

Prague needs a clear vision of its future development and a sustainable tourism policy and clear regulations are needed.

Let us hope the Smart Concept leads to smart results for business tourism in this jewel of Central Europe and its conference and events market.

Managing Editor, Conference News & Conference & Meetings World. Write Paul an E-mail