Prague Councillors Approved Modification of Tourist Tax. Czech Capital Can Receive More Funds to Cultivate Tourism
In the Czech capital city, a modified decree on the local accommodation fee has been in effect since the beginning of 2022, The new form was approved by the Prague City Assembly, and it is based on a memorandum that Prague signed with the Association of Hotels and Restaurants of the Czech Republic and with the Prague City Tourism municipal company last November. By increasing the local tourism tax from the current CZK 21 to CZK 50, Prague will receive the funds necessary to fulfil its long-term vision of cultivated and sustainable tourism, the development of the city as an attractive destination for meetings, conferences or exhibitions, and the promotion of the city abroad.
"This fee is the only tool with which Czech municipalities can directly compensate for the costs associated with tourism and through which they can participate in its economic benefits. Prague, with an accommodation fee of CZK 21 per night, has been falling behind within Europe and even behind a number of Czech cities. The increase in the fee will help the city and the people of Prague, and I am glad that we have agreed on this necessary step with the hoteliers themselves," says Pavel Vyhnánek, Deputy Mayor and Councillor for Finance and Budget.
Based on the agreement in the memorandum, half of the funds collected will be used, for example, for regular targeted campaigns promoting sustainable inbound tourism. The image of Prague as a suitable destination for meetings and conferences will also be significantly supported. The city will also support exhibitions, fairs or other major events, whether cultural or business, that will attract cultured visitors.
"We very much welcome this step on the part of the City of Prague, which will not only lead to an increase in future investments in marketing and promotion of Prague abroad but will also support the holding of important business or cultural events that will attract cultured visitors. As a key message, we perceive the fact that the funds raised will be intended to fulfil the long-term vision of cultivated and sustainable tourism and the promise to significantly support the image of Prague as a destination suitable for congresses and conferences," adds Roman Muška, Managing Director of the Prague Convention Bureau, a company that officially represents Prague in the meetings industry.
"Prague is a city of culture, history, monuments or quality gastronomy. We want to accentuate this note when promoting it abroad. Until now, expenditures related to tourism and used to promote the capital city have been financed from the pockets of Prague residents. From next year on, tourism will increasingly earn its own resources. Half of the funds that will be raised from the increased local fee will return into tourism and help us fulfil our vision of cultivated tourism," says Hana Třeštíková, Councillor for Culture and Tourism.
Tourism in the Czech capital provides employment to more than 100,000 inhabitants. However, the collected taxes and their subsequent redistribution within the so-called budget allocation of taxes are not linked to the regions and their economic activity. Although tourism is an important sector of Prague's economy, the city itself receives only a fraction of the tax revenues that public budgets receive from tourism.
The local fee, which is the only one in the field of tourism to receive direct funding for municipalities, represents a unique opportunity to gain access to funds that will be invested back into development of sustainable tourism with high added value and building the image of Prague as a cultivated and attractive destination. The fee is paid by the tourists themselves for each night spent in Prague accommodation facilities for a short stay not exceeding 60 days.
In other European cities comparable with Prague, the fee ranges from two euros, and the cities use these revenues, for example, to develop infrastructure or promote tourism. Prague would like to move closer towards the European standard of accommodation fees.