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Beds in Berlin are too cheap

In London oder Paris a stay triples in price

Berlin (February 10, 2006). Berlin is swamped with hotel beds and masses of tourists. A paradoxical situation. Other metropolitan cities like London or Paris are booming. There the guests pays a triple price for a night. International hoteliers will discuss the differences between the markets during ITB. It's one focus of ITB's first hotel conference "Hospitality Day".

Willi Weiland, President of the Hotel und Gaststättenverband Berlin und Umgebung e.V. (Berlin Hotel and Restaurant Association), and General Manager of the InterContinental Hotel Berlin, tries to explain this odd situation from a hotel manager's point of view.

Berlin faces more and more tourists; however, the hotel rates are still dropping. What's your explanation for this paradox? What is happening in Berlin from a psychological point of view?

Willi Weiland: In 2005, many new rooms or beds were added and thus the additional demand was repeatedly neutralized. In this way, rates are not able to regulate themselves - there is no shortage. In addition, new hotels normally have opening rates that are too tempting for guests to refuse.

Does that mean the hotel industry lacks a backbone?

Weiland: Yes, you could say so. It's less a Berlin phenomenon but rather a German one. Because of the Internet, our industry has become highly transparent. Just by clicking, customers know exactly what's happening in the city, where to book an inexpensive luxury hotel, should the occasion arise. This generates a certain problem.

The hoteliers do the same as the customers. In a rate-comparing system, hoteliers observe other colleagues and calculate their own rates accordingly. In this way, the rates drop rather than rise. And then, we get back to your question, whether the hotel industry lacks a backbone.

I still hope that people will be more focused on revenue management, which would lead to more logical pricing.

Do you talk to colleagues about quality at all?

Weiland: In my New Year's address here in Berlin, I said: We should promote our sales according to the classification. It is about acting corresponding to 4 or 5 stars - you offer services after all. If our rates were too low, we wouldn't be able to keep our service in the medium term as a 5-star hotel. This theoretically means that the either the quality had to suffer or I'd generate losses. Actually, I don`t want either. In the meantime, Berlin has 18 5-star hotels that have a very high standard to a certain degree. I hope that we are able to maintain this standard and that the hoteliers have enough courage to slowly increase the rates. We are not talking about a lot of money, after all. It's only about only 10 or 15 euros net per year. This would be an enormous drive for the entire hotel industry in Berlin.

But I'm in a positive mood as far as Berlin goes and not only because of the football world cup. In the future, there won't be that many more new hotels. The market has an opportunity to calm down and let the market laws take over the helm again.

The interview was conducted by Maria Puetz-Willems.

Fore more details and the list of participants, please, see www.itb-kongress.de .

 

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