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Tourism after Covid in Prague

Brad McGregor , Michaela Pixová
Prague

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A year before the COVID-19 pandemic, a new municipal government was installed in Prague with three new parties sharing power, including one activist movement the largest change in the city’s urban governance in thirty years. Both this government and the central district (Prague 1) seemed well aware of the impacts overtourism were having on the city’s urban character and the life of its residents. Thus, they were well positioned to take advantage of the lull in tourism the pandemic has provided in order to enact change. How ambitious and successful these changes will be remain to be seen.

The City as Tourist Ghetto

For decades following the Velvet Revolution, Prague had been subjected to an extreme form of laissez-faire urban policy in its transition to a market economy that led to the increasing displacement of the residential population from the historic core. Although dilapidated after half a century of neglect, the centrally planned economy had allowed it to retain a significant residential function which most cities in traditional capitalist societies had lost long ago. Now, through a combination of privatization, restitution and rent deregulation, residents found themselves in increasingly precarious positions that pushed them out the city centre to be replaced by underregulated development and tourist-oriented business such as hotels, restaurants, souvenir shops, etc.—often through well-documented corruption tied to the municipal government itself (for more, see Horak 2007) and various unethical activities on the part of the new property owners (see Cooper and Morpeth 1998 or Pixová 2013). This in turn led to a deterioration in the character of the historic core, an 866-hectare UNESCO World Heritage site (itself a cause of touristification), that is often referred to as a ‘tourist ghetto’ (Pixová and Sládek 2016).

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In sheer numbers, the population of Prague’s historic centre was halved in the decades following the fall of the iron curtain. International tourist visits doubled to 4.1 million between 2000 and 2010, a trend which accelerated in the last decade before the pandemic as it dovetailed with the global surge in tourism, the growth of low-cost airlines, and the rise of AirBnB, Booking.com and other tech driven innovations in tourism. In the year prior to the pandemic, unique individual visits continued to grow to 8 million (5.2% year on year), making Prague the most tourist dense city in Europe (30% higher than any other city). And, like its counterparts, Prague’s rental housing stock came under increasing pressure from private owners, with close to 14,000 AirBnB units being offered in the historic district, accommodation which had previously been available to residents 60% more than available rental apartments. Meanwhile, the same tourism trends saw a decrease in the length of overnight stays year-on-year as tourists were encouraged to visit the city for brief city breaks.

The problems associated with this mass influx of tourism in the city centre, of course, made itself apparent beyond the housing market, which by 2019 was the second-fastest growing in Europe (countrywide). As noted earlier, the character of the city centre itself had deteriorated, leading to tourist inflation, public space overcrowding, traffic (particularly pedestrian) congestion, tourist ‘smog’, noise and safety violations (due to late night business), all of which generally led to less involvement among the general population in the city centre, and an image of it as purely a tourist destination.

Nonetheless, it is also important to note that tourism has been essential to Prague, creating 5% of its GDP and employing close to a hundred thousand people (8%, second only to Amsterdam) pre-pandemic.

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Pandemic Impact

Perhaps the most iconic example of how the city was affected by the pandemic was the decision of the Prague mayor, Zdeněk Hřib, to allow a mass dining event on the Charles Bridge to celebrate the end of the pandemic’s first wave a feat that would have been unthinkable under normal tourist conditions. The city, like others, had become empty overnight and has remained far less visited today, at 71% below 2019 levels, with 40% visiting domestically.

This access to the historic core, while welcome by residents, has been coupled with business closures not just in the centre but throughout the city as well as a significant reduction in city’s cultural offer, which was rather highly developed before the pandemic. This perhaps underscores the dependence on tourism dollars that cultural entrepreneurs inside (and outside) the centre used in order to offer a rich cultural life to residents. Various initiatives were introduced by the city to save physical businesses, such as using hotels to house homeless (originally a pandemic measure which then continued as a pilot project), and the expansion of its Art in the City Programme to support contemporary artists.

The reduction in tourism has also effected the housing market, with a major portion of the AirBnB stock (50%) no longer on offer. The situation today has exactly reversed, with realty sites offering 40% more apartments than short-term rentals.

As an aside, the idea of sustainable tourism inclines more environmentally sustainable tourist policies. Prior to the pandemic the city itself was under a great deal of pressure not just from grassroots urban groups demanding better policy with regard to the historical centre, but also from environmental groups such as Fridays for Future and Extinction Rebellion, among others. The city passed early in the pandemic a “climate commitment” to move towards net zero by 2050; however, it remains to be seen how this would be incorporated into their strategy for sustainable tourism, and indeed the strategic plan of the city as a whole.

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Planning for Sustainable Tourism

While it can be criticized for not going far enough, perhaps because Prague was already aware of the unsustainability of its tourism industry and was under new leadership, it was somewhat prepared to take advantage of the lull in tourism so as to move forward with its sustainable tourism plan, Putting Prague First, which was released in May 2020.

The plan lists several policy goals with the intention of improving the quality of life of residents, reducing the negative effects of tourism, and creating a tourism environment that supports the cities sustainable development goals. This includes specific policy goals such as creating a cooperation scheme that increases communication with residents (and responds to crises), adding facilities in the historic core that are geared towards residents of the city as whole, creating attractions outside the city centre that appeal to both locals and tourists, cooperating more with the country’s tourist agencies and working with the central government on new developments in transport and accommodation, investing 2% of the city budget in art outside the city centre, supporting MICE tourism, establishing nightlife zones with minimal impact on local residents, targeting groups attracted to ‘slow tourism’ and ‘eco-tourism’ in marketing campaigns, creating better transport links to major tourist attractions, and motivating tourism entrepreneurs to be more environmentally-friendly.

Additionally, Prague’s new government is at the moment compiling action plans intended to regain some of the control it had lost over its housing policy in the previous decades vis-à-vis the implementation of a new housing strategy. The strategy aims to increase affordable, quality housing through cooperative ownership while simultaneously reigning in the deregulatory environment for which AirBnB was operating pre-pandemic.

Not enough regulatory power

Besides having already approved building projects within the inner-city (under a city of short distances framework) which includes said housing, the municipal assembly has passed legislation imposing taxes on short-term rental providers that earn annual revenues in excess of 40 000 EUR. The city has also made it mandatory to charge a fee for these says, and the online platforms must now share accommodation information with the Czech authorities. This effectively creates obstacles to large short-term operators (10 or more units) who are already struggling with the dramatic drop in business due to the pandemic. However, even the city acknowledges it does not have enough regulatory power on both national and international levels to make their policies as effective as other European cities. Moreover, in December 2019, Prague lost an important partner in the city district of Prague 1 (the historic core), where the new activist government was replaced by parties tied to the city centre’s business lobby.

It remains to be seen how effective Prague will be in implementing its new plan or whether the plan can indeed achieve its stated goals. Historically, most city plans have ended up in a drawer and have not made much difference in practice. Furthermore, in 2021, the country passed a new construction law excluding residents and civil actors from development discussions, undermining the regulatory process and it‘s reminiscent of earlier neoliberal phases in the city’s development. In this light, the rhetoric used about a “city of short distances” could be seen as an excuse to overbuild the city, creating a dense city made principally for investment purposes and not for residents.

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Real estate continues to rise in price

The housing market itself has not cooled down either despite the pandemic, with real estate prices continuing to rise year on year, recording the highest growth in the EU, and long-term rental prices have returned to pre-pandemic levels. This suggests that when tourism does return to the city, it will be difficult to stop increasing price pressure for locals who depend on the city to live. Moreover, the effects of inflation on both the housing market (and thus rental market) are fluid to say the least, with both prices spiking and mortgage rates increasing in early 2022.

Finally, the tourist industry itself has very little capacity at the moment to enact deeper, structural changes that will allow for the participation of private enterprise without substantial help from the state.

Still, the goals of Prague’s plan are in line with many contemporary ideas on how to create sustainable tourism in its urban planning and should it retain that focus and invest heavily there is hope that the city will be able to reshape its relationship to tourism in the decade that follows.

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