Written by: Martin Zika
INDUSTRY: Fewer tourists in the Czech Republic
According to information from the Czech Bureau of Statistics, 47,471,000 tourists came to this country in the first half of this year. Last year this figure was 47,661,646 for the same period. This is reflected in lower profits for hotels and stores that specialize in souvenirs. Experts agree that the main reason for this is the strengthening of the Czech crown against the euro. Moreover, the Czech travel industry was also significantly affected by the recent floods. According to Jaromír Beránek of Mag Consulting, a company active in this field, a 50-70% decline in the occupancy rate of accomodation capacities could be expected in September. “Thousands of entrepreneurs in the travel sector will literally fight for survival,” Beránek says. According to him, the Minister of Foreign Affairs should explain to foreign ambassadors that we have coped with the floods and are once again a safe destination.
ECONOMICS: Floods force shift in priorities
The catastrophic floods that ravaged the Czech Republic and caused damages in the tens of billions (CZK) will significantly influence the future of the economy (see page 28). Today, the renovation of the ravaged country has become the highest priority of the government for the next year and investments planned before the flood will have to be postponed. The state is prepared to pay for most of the damages and the government has already published proposals for financing the repairs. The state budget will be reworked but the planned deficit will not increase, according to Minister of Finance Bohuslav Sobotka. Sources will be sought in the budgets of the ministries, the purchase of new supersonic jets will not be realized (buying used jets has been proposed), and exceptional income from privatization will be used. The state will contribute by subsidizing the interest on bank loans for affected entrepreneurs, and acting as guarantor for loans and leasing to small and mid-sized firms. Foreign assistance, both humanitarian and in the form of various loans, has also been offered to the Czech Republic.
ADVERTISING: The bell tolls for tobacco ads
The new Czech government successfully passed its first test on August 7, when the parliament expressed confidence in it. Now it has also passed a bill regarding a complete ban on tobacco advertising. This bill relates to sponsorship that promotes tobacco products, as well as their free promotional distribution. Advertising that does not directly mention tobacco products, but uses the trademark, logo or characteristic features of the product, will also be prohibited. According to this amendment to the advertising law, the promotion of tobacco will only be allowed in shops that sell cigarettes and in large stores, particularly in those parts where tobacco is sold. Another exception might be advertisements in specialty magazines.
The proposal will be negotiated in both chambers of parliament, and the House of Representatives will most likely deal with this bill during its October session.