Business News

Skoda Joyster makes its first appearance. High-end hotel business booms in Czech Republic. Orco buys office block in Prague. Telefonica O2 complaint rejected by Brno court. 2007 state budget drafted.

Skoda Joyster makes its first appearance

Skoda Joyster, photo: CTK

On Thursday, Skoda Auto Mlada Boleslav revealed its newest design in a Paris showroom. The new model, called the Skoda Joyster, is being pitched as a car for young people, or those with a 'young soul,' and Skoda representatives say that it will be affordable. A sporty model, the Joyster is a three-door car. The Joyster's reception in Paris will decide whether it will move from a model proposal onto the production line in Mlada Boleslav.

High-end hotel business booms in Czech Republic

According to data released by the Association of Tour Operators and Travel Agencies (ACCKA), the number of luxury, five-star hotels is growing rapidly in the Czech Republic, while the share of cheaper accommodation facilities is shrinking. Since 2004, seven new five-star and 13 four-star hotels have opened across the country. Market demand has met expectations: in the second quarter of 2006, five-star hotels registered the highest occupancy rate of all categories, at 68 percent, which is a growth of 5.7 percent over 2005. In 2001, there were only 10 five-star and 144 four-star hotels in the country, and by the end of 2005 those figures had increased to 34 and 252, respectively. About three-quarters of the high-end hotels in the Czech Republic are located in Prague, which is perceived as an attractive and safe destination for tourists.

Orco buys office block in Prague

The Orco Property Group SA, a real estate developer with holdings throughout central and eastern Europe, has purchased an office block in Prague 7. The building was sold for 24 million Euro ($30.8 million US), and will remain occupied by Ceska Sporitelna until 2008. Orco representatives say that the company is betting on the redevelopment of Prague 7, a former blue-collar district. The company plans to begin reconstruction of the office block in 2008, turning it into first-class office and retail space. Orco Property Group, a developer based in Luxembourg, owns properties in the Czech Republic, Germany, Hungary, Russia, and Poland; the company entered the region in 1991, after the collapse of communism.

Telefonica O2 complaint rejected by Brno court

On Tuesday, the Regional Court in Brno rejected a complaint filed by Telefonica O2, the Czech Republic's largest telecommunications operator. The company filed a complaint regarding a fine of 205 million crowns ($9.2 million US) imposed on Telefonica's predecessor Cesky Telecom by the anti-trust office UOHS, for abusing its dominant position on the market. The company was fined for preventing customers from switching to rival operators by first offering tariffs with free calling time, and then canceling the beneficial tariffs in spring 2005. The fine in question is the second-largest ever issued by the UOHS office, and a Telefonica O2 spokesman says the company plans to appeal the verdict.

2007 state budget drafted

Earlier this week, the Czech state budget draft for 2007 was introduced by the Civic Democratic cabinet. The government's financial plan includes a deficit of 91.3 billion crowns (over $4 billion US). While the government's plan to sell off seven percent of its 68 percent majority in power-producer CEZ is expected to yield about 31 billion crowns ($1.4 billion US), EU standards prevent income from the partial privatization to be included as revenue in the state budget. Thus, analysts say that this will leave the deficit higher than the draft budget suggests, bringing it closer to the initial estimate of 119 billion crowns ($5.3 billion US).