Monday, 21 September 2026
Prague’s hotel market is benefiting from a combination that is becoming increasingly important for property owners: visitor demand is growing while additions to accommodation capacity remain modest. Hotel performance strengthened during the first half of 2026, yet only a limited number of new rooms are expected to open during the year, giving established properties relatively little new competition.
Revenue generated per available room increased by 10.5% year-on-year during the first six months of 2026. This was supported by a 3.3 percentage-point improvement in occupancy together with a 5.4% increase in average room rates. With Prague hotels already operating at relatively high occupancy, the figures indicate that operators are benefiting both from more occupied rooms and from the ability to charge higher prices.
Tourism continues to provide the demand behind that performance. Prague welcomed approximately 3.83 million guests during the first half of the year, generating around 8.76 million overnight stays. International visitors remain particularly important to the city’s accommodation sector. For the full year, paid overnight stays are forecast to reach approximately 20.2 million, an increase of 5.8%, with foreign visitors expected to account for more than 86% of demand.
New hotel capacity is expanding at a much slower rate. Approximately 481 rooms are expected to enter the Prague market during 2026, equivalent to growth of only around 0.8% in the city’s room inventory. The comparison does not prove that Prague has an overall shortage of accommodation, but it does demonstrate that the supply of rooms is increasing far more slowly than expected demand.
For existing hotels, this creates favourable competitive conditions. High occupancy leaves less scope for future performance improvements to come purely from filling additional rooms, meaning pricing is likely to become increasingly important. Prague room rates also remain relatively competitive compared with a number of major European destinations, potentially providing operators with further room to increase prices during periods of strong demand. Higher operating costs, however, mean that revenue growth will not necessarily translate directly into equivalent profit increases.
The strength of hotel operations continues to attract property investors. Czech hotel transactions reached approximately €160 million during the first half of 2026, accounting for more than half of hotel investment across the main Central and Eastern European markets under one industry dataset. The figure follows an exceptional 2025, when Czech hotel transactions totalled around €764 million, and further Prague deals are expected before the end of this year.
The central question is why stronger hotel economics have not yet produced substantially more development. Prague’s historic urban structure limits the availability of suitable sites, while construction costs, financing, planning requirements and competition for buildings suitable for conversion can make new projects difficult. If these barriers continue to restrict supply while visitor demand rises, the advantage may increasingly shift towards owners of existing hotels. In that environment, Prague’s most valuable hotel development opportunity may not simply be building more rooms, but gaining control of the limited accommodation stock already operating in the city.
Source: CIJ.World Research & Analysis Team
