A New Beginning in Czech Republic By Lenka Motykova, Arthur Andersen, Prague

Winter 1999/2000 - Prague, the capital of Czech Republic and one of the nine cities designated as a center of culture for the year 2000, is preparing for the millennium celebration with great care.

Celebrations sponsored by Prague’s Town Council and linked to Christmas begin as November ends, including a series of Advent concerts.

For New Year’s Eve celebrations, podiums will be situated in the center of Prague—Wenceslas Square, Mùstek, Havelský trh, Estate Theatre and Old Town Square. The area for tourists will be around Mùstek and will feature several types of entertainment, including a folk music party and carnival at Havelský trh.

Other activities are being prepared in Výstavistì, the largest fairground in Prague, and on Letná, the largest open air surface in the city. An association called “Prague—City of Culture 2000” is preparing a special program, but the exact content has not yet been divulged. For those who want to exercise before the party, a run will take place in Riegrovy Sady, a famous Prague park.
In Brno, the second largest city of the Czech Republic and the largest city in Moravia, the millennium celebration will start on December 27 with a large street party in the main square. The event includes a fakir show and midnight artistic fireworks. Other large parties are planned for the main squares in Plzeò, in the centre of West Bohemia, and in Ostrava.

Several projects involving other European cities also are being planned, but many face major financial problems. The first is “Christmas Bridges Between Cities,” which will include Brno and Prague and quite possibly Plzeò, Copenhagen, Vienna and Bratislava, among others.

A second project proposed, “New Year’s Eve Telebridges,” is expected to be organized under the supervision of the media groups, the BBC and Czech TV. However, this project also has encountered financial problems and its final realization is uncertain.

Czech Republic Tourism in the New Millennium

Tourism is one of Czech Republic’s most important employers, as well as one of the largest currency-earning industries, accounting for 10% of Czech employment and 10% of the nation’s gross domestic product (GDP).

According to the Ministry for Local Development, the hospitality industry consists of nearly 90,000 rooms at more than 3,500 hotels and pensions. But while the average length of stay is increasing, the number of tourists visiting the Czech Republic is decreasing.

This is because tourists no longer perceive the Czech Republic as an “exotic” destination. Indeed, the Czech Republic has become a common place to visit.

Most tourists—nearly 70% -- visit only Prague. This is because outside the capital, there is a relatively low quality of basic services, insufficient maintenance and renovation of historical objects or cultural heritage and a poor infrastructure for tourism. There also has been inadequate promotion of the Czech Republic abroad.

However, the Czech hospitality industry is looking forward to the millennium as a new beginning in tourism and travel in the country. The Ministry for Local Development has adopted a new strategy for tourism development during the year 2000.

The strategy consists of a closer connection between tourism and policy makers in addition to the creation of regions in the Czech Republic. Plans call for a new tourism development fund will soon be established for small to medium-size entrepreneurs.

Other forms of support are being prepared as well, such as help with the creation of new tourist products, better education of human resources and the establishment of a quality, uniform information system.

Tourism development in the Czech Republic also could focus on marketing the discovery of local curiosities. Already, two cities here are under the protection of UNESCO, representing well-preserved cultural and architectural traditions. Moreover, thanks to the former Iron Curtain, the natural environment near the state border has been almost untouched for more than half a century, offering excellent potential for tourism development.

It is hoped these programs will open the door to increasing numbers of visitors. With 80% of Czech Republic land offering unique beauty well suited to tourism, the millennium celebration could be a good beginning. 

(Lenka Motykova is a consultant in Arthur Andersen’s Prague office.)

By Heather Saunders, Arthur Andersen, Frankfurt, Germany

Winter 1999-2000 - The Brandenburg Gate—for nearly 50 years the symbol of a divided Berlin as well as a divided Germany — will form the backdrop to New Year’s Eve celebrations in the country’s largest and most cosmopolitan city.

Germany’s former and future capital will buzz with celebrity dinners and street parties. Music and theater will play from more than 200 open-air stages, and the new millennium will be greeted with a full hour of fireworks.

Germany also will mark the new millennium with a world’s fair, themed “Humankind—Nature—
Technology: A New World Arising.” Furthermore, the country is inviting the world to celebrate the new era at EXPO 2000, in Hannover, an industrial city in central Germany.

Hannover expects to welcome 40 million visitors between June and October 2000. Some 185 nations and international organizations will participate, with exhibitions touching on the central theme: sustainable development.

Costing an estimated DM3.4 billion, EXPO 2000 is expected to generate DM3.5 to DM4.5 billion in tax revenues as well as DM17 billion in added value for the German economy—with much of it flowing to the tourism sector. For hotels in Hannover—geared to business travelers and trade fair visitors but long accustomed to occupancy rates around 50% -- EXPO 2000 will be a boon. If only every year could be an EXPO year!

Indeed, hoteliers throughout reunified Germany hope to cash in on what is being called the “EXPO effect.” Nearby Hamburg, with its sophisticated hotel and restaurant scene, will almost certainly capture some overflow of EXPO tourists. Frankfurt, with continental Europe’s busiest airport, expects to serve as a gateway for foreign visitors. Berlin and even more distant cities such as Dresden and Munich hope to benefit from the general increase in travel to and within Germany.

Beyond the five months of EXPO 2000, the new millennium seems in many ways to offer new promise to a domestic travel industry battered in the 1990s by the economic fallout of reunification and recession.

Some important trends include:

• In most major cities, hotel demand has been growing steadily for several years, supporting the highest hotel occupancies and rates since the reunification boom.

• Berlin is polishing its image as capital and cosmopolitan “Weltstadt,” or “World City,” stimulating leisure tourism and international hotel development.

• The European Monetary Union—with Germany at its center—holds out the prospect of increased prosperity and even greater ease of travel within Europe.

• Foreign investor interest has picked up again, and domestic hotel chains are beginning to go global by increasing foreign development activity and seeking alliances with international players.

At the same time, many cities—especially in the former East Germany—will continue to suffer from a glut of hotel rooms. The next wave of new construction already is gathering strength in the larger cities in the west.

(Heather Saunders is a senior manager and the director of hospitality and leisure consulting in the Arthur  Andersen’s Frankfurt office. She has been based in Europe since 1992, observing the development of the hotel industry in re-unified Germany at close range.) 

©Arthur Andersen