Peering through the mist in Prague

The late November fog that greeted CMW reporter Simon George’s arrival in the Czech capital provided an apt backdrop for a Prague international MICE market struggling to break back through the meetings mist. Prague’s late autumnal weather may not have changed from three years ago when CMW last flew in for a familiarisation trip organised by the Prague Convention Bureau (PCB) but, inevitably, a global pandemic, war in Ukraine, concerns over recession and and rampant inflation have left their mark on Prague’s MICE market. So, too, structurally in terms of transport and tourism, the number of international flight arrivals, especially from the US, is down from pre-pandemic levels. And, crucially, booking visibility for conference/event organisers, not surprisingly, is still very low and last minute although there are signs of improvement. Right-sizing and refurbishing Despite the global headwinds, Prague’s event organisers made good use of the pandemic downturn by refurbishing, restructuring and right-sizing their businesses – and to find out how the key players are adjusting to the ‘new normal’, to quote Dana Prejzkova, operations manager at events organiser Aim Group, CMW spoke to Roman Muška, the PCB’s managing director; as well as to the sales managers from some of the big hotel chains. The whistle stop tour allowed time to drop in at key venue O2 universum and hear from Marek Chmatal, business development director, who noted the venue had a busy event schedule for 2023 but was having to cope with a 250% increase in power prices. Professional conference organiser (PCO), Dana Prejkova also shared a meeting planner’s take on the developing Prague international MICE scene. A meetings team marches on its stomach, however, and first stop was a  lunch hosted by Kunsthalle Praha, a recently opened, non-profit art foundation with event space that used to be a transformer station powering the city’s tram network. Recovery was likely at least two years off, Roman Muška told me over lunch. Three years ago, the PCB’s managing director had been understandably more upbeat about local MICE developments but, nevertheless, cited incremental progress being made and confirmed his view that Prague was in a good place. The number of meetings in Prague is still recovering and meetings are smaller in terms of the number of physical attendees due to certain limitations and some attendees remaining online attendees within the hybrid context. As for how long Prague, whose three main source MICE markets are the US, UK and Germany, would take to recover, Muška forecast that it would be at least two years: “My expectation is to get back to pre-Covid numbers (in terms of the number of meetings and attendees) at the end of 2024 or 2025,” he said. Prague’s local MICE market took up some of the slack from the shrinking international market during the pandemic, and will continue to grow this year. “We need to focus more on the international market, to bring people back,” Muška added, and said he believed one key to this was an increase in direct flight connections to Prague from the US (Delta and American Airlines flew in pre-pandemic). A general perception of Prague and the Czech Republic as being close to the war in Ukraine, he said, was another challenge when talking to international MICE players looking to reassure their delegates. Tough climate Site inspections of the Prague Marriott, newly renovated in October 2021, and the Hilton, provided an opportunity to hear what each hotel’s management had to say about the MICE market. Echoing Muška’s comments, Štepán Malý, director of sales and marketing at the Prague Marriott, said: “Globally, Prague as a market is not doing great. If we look at other cities comparable in size in Europe – we are only doing better than Bratislava – for example, on RevPAR. We are behind Warsaw and Budapest and we used to be ahead of these markets.” From the Prague Marriott’s perspective, the first quarter of this year was very slow due to Covid and proximity to the war in Ukraine. However, the second half has seen these concerns ease, Malý stated, and the Prague Marriott has seen a big influx in conference business. That said, competition in the hotel sector is not standing still. The former Intercontinental Hotel, which is being rebranded as a Fairmont and is scheduled to open in 2024, will be a big player in the conference business. The first quarter of 2023 is looking better, Malý said, noting the Prague Marriott offered 14 event rooms, 1,189sqm of event space, including a largest space capable of hosting 650 delegates, as well as 11 breakout rooms. Mind the gap Hilton’s Cloud 9 Sky Bar was an elevated spot to hear hotel manager Alistair Laird’s overview on market lead times. He acknowledged that the MICE climate is tough and booking visibility is limited. “The willingness to commit long in advance is declining and there is a clear gap in terms of Q1 booking visibility compared with last year, something everybody is facing,” he said. Laird did flag the potential pent-up demand to be tapped and the MICE market’s renewed appetite for physical meetings post pandemic: “We don’t see the same amount of confirmed business as previous years (pre pandemic), but I think everybody needs to stand their ground and remain optimistic because what we have seen in the last couple of months is that, even if you don’t have the same amount of business confirmed for the upcoming quarters, the lead-time on this business is reducing. “So, either we are going to see pent-up demand in the second half of next year or business coming in at a shorter lead-time. Either way, it works for us!” Asked where else he saw rays of sunshine, Laird flagged the re-emergence of physical meetings post pandemic: “Everybody was concerned about the how the world would change after the pandemic, saying ‘this is going to change corporate travel: we’re not going to see meetings and events to the same extent, there will be hybrid events, etc’. However, what we have seen is that people are desperate to spend time face to face. So, I’m definitely optimistic.” PCO viewpoint AIM Group’s Dana Prejzkova has been on the PCB’s board since 2021 and was markedly more upbeat than some of the hoteliers. She said that although the first half of the year the MICE market had been damaged by the Ukraine conflict, she was surprised that since May there had been a sharp improvement and the market had taken off (growing over 200%). “Everything started to happen. We started receiving requests for conferences and congresses with very limited notice (3-4 weeks).” It is worth flagging here two factors that have made this segment especially busy: congresses that were postponed because of the pandemic are now being put on, and the Czech Republic’s six-month presidency of the Council of the EU (from July-December 2022). Prejzkova did qualify her optimism, though, by saying: “We are still missing people, like everywhere in the world.” Looking ahead, Prejzkova spoke about the importance of re-defining what the ‘new normal’ might for the MICE market post pandemic – highlighting the need for speed and flexibility to win customers. “I think everything will be much quicker (from the original conference request to its implementation), you have to be more flexible as regards terms and conditions where cancellations are concerned (which not many venues in the Czech Republic are used to).” Prejzkova went on to describe how she saw her own PCO role changing – from being a pure organiser to a more consultancy/advisory role, a trend that has emerged during online/hybrid meetings. Prejzkova added that the Asian market was also largely still missing. When the meeting mists clear and visibility returns, this jewel of a city in Central Europe certainly has the charm and events inventory to take advantage.