Yes and no.
Prague is not as crowded as it is during the summer, but in the main areas around the Old Town Square where there are Christmas markets it can be very busy during the day, however it is not so busy in the morning or after about 3pm. But, even still, it is worth going to Old Town Square – the smells of chestnuts roasting on open grills and mulled wine being sold from stalls is wonderful.
There are two cities I love at Christmas that is Prague and Vienna – both are quite close and very similar in the way Christmas is celebrated and the smells around the cities are delightful, romantic, and very old worldly.
If you are lucky you will have snow, if you are unlucky you won’t have snow but the temperatures will be -10 or so. It is one thing to bear in mind – the cold can be difficult, if you are coming from the UK it is hard to understand how cold it can get. But it is not always cold, the last two Christmases have been very mild and three years ago it was very cold.
There are loads of Hotels around Prague, I have recommended the Axa Hotel to friends and they have stayed there and liked it. It is middle of the road, but clean, friendly, the rooms are of a good size, it has cable TV, and it has a large swimming pool in the basement – the pool is open to the public also – but very importantly it is close (5 minutes walk) to the old town.
One thing to bear in mind is the flights – if you plan on going, book your flights early as they can get expensive nearer the time.