Downtown entrepreneurs after a year of covid: Customers are more cautious, we are changing strategies and looking for the return of tourism

Downtown entrepreneurs after a year of covid: Customers are more cautious, we are changing strategies and looking for the return of tourism

Entrepreneurs from the centre of Prague agree that the government restrictions imposed because of the covid-19 pandemic have lasted too long and are unpredictable. This negatively affects their business in the centre of Prague, but also the behaviour of their customers. On the other hand, traders also perceive the positive impacts and opportunities that the coronavirus crisis has brought them. This results from a survey conducted in April 2021 among members of the Association of the New Town of Prague (SNMP).

The year of the pandemic has not only affected companies, but also the behaviour of customers. The majority of respondents, including representatives of catering, hotels, real estate services and retail whose businesses are located on Wenceslas Square and in the surrounding area, agree. The survey showed that due to the persistent uncertainty, customers are more cautious, hold off and postpone their decisions until a more stable period. Virtually all respondents have had to reassess their business outlook and adjust their business strategies accordingly. The majority proceeded to solutions moving a possible part of the business to the online environment, such as casual meetings, virtual property tours, online sales, etc. In addition, entrepreneurs from the Prague centre have focused on cost and revenue control and have also moved significantly more towards domestic clients.

With a few exceptions, all retailers in the centre of Prague experienced significant drops in sales. On the other hand, new opportunities have opened up for many of them, where they have invested time in more intensive preparations for reconstruction, improvement of work processes and staff training. 

What impact has the pandemic crisis had on your business?

  • Jump in sales, deterioration of clients’ payment morale
  • Fewer contracts signed, loss of some clients
  • Ineffective short-term decision making, suspension of plans
  • Greater digitalisation, improved work processes
  • Home office, space for intensive preparations for reopening 

People working in the centre of Prague withstood the coronavirus crisis

How has the pandemic affected employees working in the centre of Prague? According to the respondents’ reactions, there were no major layoffs. Just over half of the respondents had not had to make redundancies due to the pandemic. On the other hand, there was no increase in salaries or bonuses. Rather, companies were optimising their teams and trying to keep them going. At the beginning of the coronacrisis, after the depopulation of the Prague city centre, traders had to adapt to the new conditions as quickly as possible and often allowed their workers to work from home, including the acquisition of the necessary technical equipment. “Due to the necessity to work largely from home, we put emphasis on communication with our employees so that they are sufficiently involved in the company, do not lose contact with their colleagues and so on,” adds Jan Kotrbáček.

Prague city centre will change

How will entrepreneurs from the centre of Prague function after the coronavirus crisis? The majority believe they will continue to do business either within the framework of the ongoing changes and a smaller proportion as before the crisis. “The world will not be the same as before the covid, change in the industry is inevitable and right,” said Jan Adámek, chairman of SNMP and managing director of JAN Reality. 

More than half of the respondents think that the environment of Prague city centre will change. They expect a very slow return of tourists. According to some, there will be less demand for rentals in the centre, which could affect the overall rent levels in the capital, which some say are unaffordable. Some respondents even believe that the current situation could attract more people who would like to live and stay in the centre of Prague. “I would be happy if the centre was more oriented towards local residents and the resulting expansion and improvement of services,” mentioned one landlord in the centre of Prague.

A large proportion of respondents believe that the tenant mix of shops will change significantly. Some brands are leaving the centre and others are taking their place. There is a slight concern amongst members that unwanted businesses will be added which may negatively affect people’s willingness to visit the centre. “It is important that the quality and profile of the companies does not change and the long-established quality business environment is not degraded. We believe that thanks to the departure of some inappropriate retail concepts from the centre and the arrival of new promising brands, Prague’s centre will become more cultured,” emphasises Jan Kotrbáček.

“I believe there will be certain changes. The question is how long the changes will last. It will depend on the pace of the return of tourism, the residents working in the centre, and most importantly the local government,” a representative of the real estate service provider expressed.