E. Berlin Hotel Caters to Some Capitalist Tastes

At the prestigious corner of Friedrichstrasse and Unter den Linden here stands the Soviet Bloc’s only hotel to earn Western recognition as one of the world’s most luxurious.

But the Grand Hotel’s 350 plush rooms and apartments are available only to the carriers of convertible currencies, such as dollars, and few East Europeans will brave the doormen’s steely stares for a peek at the opulent Art Nouveau lobby.

Like all businesses in East Germany, the government is the owner and as such can smooth more than the sheets for its most-valued clients.

Limousines Waved Through

The hotel’s shiny black Mercedes-Benz limousines are virtually waved through border controls while other Western travelers are forced to line up for the lengthy ordeal of passport checks and currency declarations. Hotel staff can settle the details with the Foreign Ministry later.

Likewise, with a mere signature, they can they arrange a visa extension or Western bank transfer--tasks that through the normal bureaucracy can take hours.

The Grand opened in August, 1987, and is now considered one of the 200 best hotels in the world.

Its emergence typifies the kind of turnkey business deal East Germany wants with the West.

While Soviet, Polish and Hungarian companies have been pressing for Western cooperation to develop and share new hard-currency sources, like tourist facilities, East Berlin’s authorities are resistant to sharing control or profit.

“We have not been riding this fashionable wave of activity over joint ventures,” said the Grand’s deputy director, Hartmut Kaske. “Those countries running hotels and other businesses under joint ventures with the West do so out of economic necessity. We are not that weak.”

Japanese Construction

Financing for construction of the hotel was arranged by the Japanese company Kojima, which built the Grand. The East German government has paid off the loan, and the hotel’s profits are channeled to it as reimbursement.

Kaske said in an interview that the hotel will have paid for itself within 10 years, although its occupancy rate of less than 40% is well below that considered a break-even point for Western hotels.

The hotel draws mostly business executives and prominent visitors with its rates ranging from the equivalent of $150 a night for the smallest single room to $2,000 for one of the two penthouse suites.

All 800 employees are East Germans, who are paid significantly less than Western workers in similar jobs. The national average for personal income is about $600 a month, and most consumer service jobs pay well below the average.

Gudrun Goslar, the hotel’s public relations director, says exclusivity is part of the Grand’s attraction for the Western business people who make up about 80% of the guest list.

“It would be foolish to condemn what is available here just because some people can’t afford it,” she remarked during a tour of the luxury suites with private saunas and hand-made porcelain lamps.

East German officials make no apologies over the luxury provided for the Westerners in contrast with the austere accommodations available for East Germans.

‘Offer Good Product’

“We built this hotel to be able to offer a good product on the international market,” Kaske said. “We operate on the old capitalist principle that when the customer is happy, he buys more.”

He said much of the initiative to build a luxury hotel in East Berlin came from the foreign trade officials whose Western counterparts had complained of poor accommodation.

While the Grand Hotel is lavish for a Communist enterprise, with a 340-label wine list and an indoor orange grove for communing with nature, guests can still find a few reminders about which side of the border they are sleeping on.

Dialing direct to Western cities is possible, but the few international telephone lines available are frequently engaged for hours.

Tuxedoed security personnel stand guard throughout the seven-tier atrium lobby, but a few hard-currency prostitutes are allowed in to the polished bars and dimly lit salons.

Accompanying the full breakfast delivered to rooms on white linen is an imported exotic flower but a dull morning newspaper, the Communist Party’s Berliner Zeitung.

A West German businessman, who spoke on condition of anonymity, said he stays at the Grand Hotel several times a year “because it’s the closest thing to civilization one can find here.” He added that the hotel was very comfortable, “but going outside is a little like waking up from a good dream.”