Prager, who was chief operating officer at CHE, will take up his role immediately, with previous chief executive David Cook remaining as an executive director until retires on 30 November.
CHE has opened four hotels so far this year taking its total in the UK, Belgium, France and Germany to 60.
Turnover was up 1.1% year-on-year at £27.6m (£37.2m) in the six months to 30 June, pegged back by extensive refurbishment work across the estate and the resulting temporary loss of bedroom stock.
Pre-tax losses increased to £4m compared with £1.8m a year ago, although most refurbishment work is now complete and the new management team expects the benefits of the changes to show in 2007.
In January, CHE received an equity injection of £18.6m to continue upgrading its existing hotels and to accelerate Sleep Inn development.
It plans to open around 60 mid-market full-service Sleep Inn hotels across Europe within the next five years.
By Chris Druce