The Czech Spa Association says the industry has taken a big hit from government health cuts, which came into effect in October 2012, and says bankruptcies are likely, especially amongst smaller businesses.

According to Radio Prague, the country's health ministry spent around CZK3bn (US$151m, 116m euro, £99m) on spa and rehabilitation treatments in 2011 but that figure dropped by around a third in 2012. Further cuts are expected this year.

Under the October cuts, spa treatments paid for by insurance were reduced from four weeks to three and are now only be available once every two years.

Vice president of the Czech Spa Association Martin Plachy doubted the survival of some spas under the cuts.

He said for some clinics 90 per cent of their income had came from insurance payments and many were located in places that would not attract holidaymakers.

Plachy said: "Many small spas only have limited potential in bringing in more people, and it will take years before they become more popular. And that's the Czech market; I'm not talking about foreign markets where you need to spend a lot to attract people to an unknown place in the Czech Republic."

Deputy health minister Ferdinand Polák said: "Medicine has advanced and there are now other more effective means of treating some health problems than spa treatment."