Marked decrease in restaurant patronage amid lack of appetite for spending

While the Czech Republic continues to ponder the threat of recession, the country’s tourist industry and its attendant services have taken a nosedive. One of the areas in no doubt of hard financial times is the restaurant industry, which has found itself faced with spiralling numbers of patrons, particularly in Prague.

There are nearly 33,000 restaurants in the Czech Republic, and by the end of the year there is apparently going to be a lot fewer. As the global economic recession turns Czechward, one of the main areas facing a reduced appetite for spending is the restaurant sector. Though the industry was feeling the crunch even last year, with a 10% decrease in patronage, it now seems that that was only the beginning. Václav Stárek of the Czech Association of Hotels and Restaurants describes the situation:

“There is a 50% decrease of guests, especially in luxury restaurants in Prague, despite the fact that the prices are, I would say, lower than the rest of Europe in these kinds of restaurants. And the reason for that basically is the fact that families and companies as well are trying to save, and the first way in which they can save very easily is by not visiting restaurants so frequently.”

In the Prague city centre alone, some 40 restaurants have gone up for sale in the last three months, Hospodářské noviny reported on Tuesday. Eateries around the country have been tackling the trend by marking down lunch prices by as much as 50% and saving on ingredients. But faced with the simple fact of fewer tourists and less willingness to spend, there is a question of whether the restaurants will simply have to wait out the economic downturn, or if there are there other factors that could help. Václav Stárek again:

“We also have to say that some of the restaurants are not owned by the operators, but are rented. And I think the owners of the buildings also need to recognise the situation and they should rather go the way of not increasing rent in order to let the businessmen survive and operate their restaurants. In terms of the EU, what I think will definitely help us: there has been a discussion for quite a long time already about VAT rates for restaurants in Europe, and I think, and we fully support the idea, that all member states should have the chance to apply a reduced VAT rate for restaurant services. This will definitely be one step towards helping businesses and keeping employment at a certain level.”

A recent example of the bad air on the dining market is that of famed restauranteur Gordon Ramsay, who opened his first five-star restaurant in Prague at the end of 2007 only to pull out of the venture in February, 15 months later.