luxury hotel

Luxury hotel plans attest to an upturn

in Real Estate by

Project unveiled as occupancy levels gradually edge upward

A location in the city center and a renovation that will be sympathetic to the building’s history: A new hotel planned for the capital aims to offer an inviting prospect to visitors to the Czech Republic.

The venue being planned by developer Akroterion has been announced at a time when the opening of a new hotel in the capital has become a rare event indeed. With Prague’s hotels still recovering after a slump in the wake of the global financial crisis, and rates charged per room often below target despite an improvement in occupancy levels, developers have balked at investing in new properties.

Just one new hotel has opened in Prague in the past two years, the three-star Fusion Hotel, which was launched in spring last year.

Despite the challenges presented by the current market, Akroterion, which is part of Loyd’s Property Investment Group, is looking to invest 85 million euros in a property between Železná, Celetná and Kamzíkova streets.

The hotel, to cover 16,000 square meters, will have 120 rooms, a restaurant and a conference center, with work set to begin in the first quarter of 2014 and due for completion in the third quarter of 2016.

David Halfi, the CEO of Akterion, said the hotel’s location in the heart of the city center would be one of its key attractions. It will be based in renovated historical buildings and will have what Halfi describes as a “unique location.”

While some hotels have struggled to achieve good occupancy rates in recent years, Halfi indicated he was confident the new property would attract guests.

“There is still a need for luxury hotels in Prague, [although] it’s quite true there is no need for additional lower-category hotels,” he said. “This project will be a milestone in the field of luxury accommodation in Prague, which remains the dominant destination in the Czech Republic.”

While acknowledging that many countries were still mired in recession, Halfi said the long timescale over which the hotel is planned meant that conditions were likely to have improved by the time of opening.

“We’re quite confident that the city of Prague has potential to attract more tourists when the overall worldwide economy situation gets better,” he said.

Indeed, there are already signs the tourism market in the country is improving. Last year, 6.8 percent more foreign tourists visited the Czech Republic, according to the Czech Statistical Office, and the number of overnight stays by tourists went up 5.8 percent.

Figures from real estate consultants Jones Lang LaSalle indicate occupancy in Prague hotels increased last year to 69 percent, a rise of two percentage points on 2011.

The average price of a hotel room in the capital failed to increase, however, staying at about 73 euros, with analysts blaming heavy competition.

There are currently 341 hotels in the capital, more than half of them four- or five-star, and they have a total of 26,400 beds. Aside from the Akroterion project, there are reportedly five other hotels in the pipeline in Prague.

Akroterion’s project remains at a preliminary stage with some paperwork still needing to be completed.

“We’re working now on changing the existing building permit. We expect the process will be accomplished by the end of this year,” Halfi said.

Concerns over occupancy levels apply more to hotels in the suburbs than the city center, said Václav Stárek, president of the Hotels and Restaurants Association of the Czech Republic. This could suggest a new city-center venue is likely to prove popular.

“The hotels in the center usually don’t have a problem with occupancy. … With the hotels, it always depends on the location,” he said.

Stárek said Czech hotels enjoyed a 6.5 percent increase in revenue per available room last year, while international tourist arrivals grew by a similar figure, indicating the market was improving significantly after the upturn.

The new Akroterion hotel, the name of which has not been revealed, will have a 180-seat restaurant, and the conference facilities will total 600 square meters.

The developers have said they are cooperating with the National Heritage Institute, Prague City Hall and other organizations.

“Our goal is to align the design of the hotel with the unique historic atmosphere of Prague and collaborate with architects and designers who have carried out major renovations of historic buildings in urban centers,” Halfi said.

Among those involved in the project is the French interior designer Jacques Garcia, who designed the interiors for several major hotels in Paris and who has been awarded the Legion of honor, France’s highest honor. MS Architects are carrying out design work.

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