Busy Wenceslas Square is now a far cry from January 1969, when Czech student Jan Palach set himself alight to protest the Soviet-led invasion and subsequent occupation of Czechoslovakia the previous year.

"There are all sorts of weird emotions running through me," says Dubai resident Hink Huisman. The Dutch national remembers watching the entire scene from the balcony of his hotel room. "Then, this square was full of tanks and tanks and tanks. Now, it's cars and cars and people."

A bronze cross in the pavement marks forever the spot where Palach fell, in front of the National Museum, and a few metres away, a plaque commemorates Palach and another student, Jan Zajíc, who also committed suicide by self-immolation the following month.

Twenty years later, in 1989, the square was a focal point for the Velvet Revolution, when the Czechs peacefully overthrew the Communists.

Like many other former Soviet Bloc capitals, it's this connection with the recent past, this sense of living history animates this 1,100-year-old city – although the vibrant nightlife doesn't hurt, either.

Prague was settled in Paleolithic times, but the modern city was founded in the 10th century. The exotic capital of gleaming spires, arched bridges and witty, contemporary sculpture (bad boy David Černý's babies crawling up the TV tower are a delight) is now a bustling centre for business, particularly into Eastern Europe, as well as a top conference hotspot.

In recent years, this conurbation on the banks of the Vltava has also emerged as a hot new luxury destination, with several top-end hotels opening their doors in what is already an extremely crowded market. As far back as 2007, the city had more hotels (320) than streets (280); today there are almost 500 hotels in Prague's city centre.

"Compared to 10 years ago, Prague has much more to offer the luxury traveller," says Henning Matthieson, General Manager of the new Rocco Forte-run The Augustine hotel, which opened last month. It joins three other new entrants in the five-star sector: a Sheraton (inaugurated in March), the first Buddha Bar Hotel (January) and a new Kempinski (October).

Located in a functioning 13th-century monastery, the hotel is a complex of seven old and new buildings. Many of designer Olga Polizzi's interiors are inspired by this history as well as the country's cubist era (Prague is the only place where the art movement was applied to architecture and interior design, resulting in some rather witty living statements).

But with hospitality consultancy The Bench putting Prague 13th in a recent survey of four and five-star hotels in European cities, measured by revenue per available room, competition is also hotting up at the budget-conscious end, with new openings such as The Yasmin and 987 Prague, with its furniture by Corbusier and Philippe Starck.

Either way, interest in Prague here in the Gulf is tremendous, says Matthieson, who led a roadshow across the region last month. "Prague has now emerged on the Middle East map," he says.

And of course, there's 10 centuries of history in this home of Kafka and Kundera. "In Paris, you need to go to a museum, the whole city of Prague is a museum," he says.

Prague suffered relatively little damage during World War II, as compared to nearby Dresden or Nuremberg, for example, and consequently has one of the world's most well-preserved collections of architecture, from Art Nouveau to Baroque, Renaissance, Cubist, Gothic, Neo-Classical and ultra-modern, says Marek Holub, an architectural fanatic and tour guide with the Four Seasons Travel agency. It regularly books hotels in Central Europe for Middle Eastern residents and General Manager Anwar El Ahmed says it can provide Arabic speaking guides as well as handling transfers, tours and even private jets.

What you can do in the city depends on how much time you have. From Bohemian palaces and splendiferous Cubist architecture to film trails that revisit the locations for blockbusters such as Casino Royale, The Bourne Identity, Amadeus and the Narnia series, there's so much to do, you're definitely not going to be able to pack it into a few days – or even a week.

Short-trippers will definitely want to take in Prague's famous fairytale castle, the tops of whose buildings can be seen from almost anywhere in the city. Founded by the Czech Přemysl princes in the 9th century, the complex is the largest in the world, bigger than seven football fields and is still the official presidential residence. Arrive at midday for the changing of the guard by the castle gates, and stay to visit the Toy Museum, with its entire floor of Barbie dolls; the massive St Vitus Cathedral, built over an astonishing seven centuries from 1344 to 1929; and the 16th-century Golden Lane, which housed royal tradespeople and later, artists and writers, including one Franz Kafka at number 22.

Bare minutes away is the iconic Charles Bridge, constructed during Bohemia's Golden Age in the fifteenth century. Thirty statues of a later vintage line it on either side, including knights and saints, and legend has it that if you rub the plaque under the effigy of St John of Nepomuk, you will return to Prague. The best time to do so is late evening, when the lights of the city bring that fairytale splendour alive – during the day, the bridge is a busy place, with painters, tradesmen and souvenir sellers galore.

On the other side is the Old Town. This has been the centre of Prague for nigh on a millennium – but the district is also home to Frank Gehry's iconic Dancing Building, nicknamed Fred and Ginger after Fred Astaire and Ginger Rogers. The Old Town Square has plenty of opportunity to immerse yourself in history, but do stop by the famous Astronomical Clock and watch Death mark time. And look out for one of Prague's characters: street musician Vladimir Pinta charming the ladies with his saxophone playing.

The winding alleyways off the square are the best place for some retail therapy: ritzy Pařížská has all the luxury brands, Dlouhá and Dušní the quirky original boutiques and central Celetná is where middle-class Prazaks swipe their plastic. There's also plenty of places to buy some Bohemian crystal in this area and it is the centre of the capital's after-hours club district -- where, be warned, you're certain to bump into a bunch of Brits out on a stag night weekend.  

Five minutes down some recently laid cobblestones (all the better to enhance the city's olde-worlde feel) and you're back in Wenceslas Square, the place you're most likely to encounter the legendary British stag parties that earned Prague its party reputation in the 90s. It is named for St Wenceslas, the 10th century Duke of Bohemia who gave his name to the Christmas carol. Cross to the other end of the square – really a long arterial road – and through the Bata shop (the brand, originally Bat'a, was founded by a Czech cobbler) and you're at the world's only Cubist lamppost.

If you've read this far, you'll know you need to pack walking shoes for Prague – even if you intend to unwind later at one of the city's top-end spas.

With its legendary traffic jams, there's plenty of walking in Prague, up and down hilly streets and around its attractions. "That's what one does in Prague," one of the smiling beauties at The Augustine's spa tells me, when I complain about my aching feet. But ask for a treatment that balances and realigns your chakras, the seven energy centres of the body as described by traditional Indian medicine, and you're likely to emerge re-energised and perhaps even ready to face a Soviet tank or two.


NEED TO KNOW

Getting there 

- No direct flights to Prague can be booked out of Dubai, but most European carriers offer connections.

Where to stay

Emirates Business stayed at the five-star Rocco Forte hotel, The Augustine (above). Located in Prague's picturesque Malá Strana district, it is close to or within easy reach of several tourist attractions. Taller guests may need to request longer beds, but the hotel, says General Manager Henning Matthieson, is designed for the luxury traveller: you can ask for a Ferrari in the morning and drive away in one by 3pm. theaugustine.com

Food & nightlife

Much of Prague's nightlife is literally underground – in cellars and vaulted basements. While Czech food is quite heavy – think meat and cabbage – ask your hotel concierge for options. Tomas Kittler, Head Concierge at The Augustine recommended the excellent V Zátiší as well as the terrace at Cowboys, with its stunning views. The A-listers, of course, head to the Kampa Park.