Living in the past

Berlin's Adlon hotel has had a chequered past - with the Cold War just part of what it had to contend with - but it is now firmly in the luxury market and banking on its history to boost business. Gerald Donagher reports in the second of our series on legendary hotels.

History sells. When Lorenz Adlon opened his Berlin hotel in 1907, it was acclaimed as the best and most modern in town. By the 1940s, the Adlon's check-in ledger was rich with signatures from the worlds of royalty, diplomacy and celebrity. Greta Garbo, Charlie Chaplin and Franklin D Roosevelt were among those passing through the lobby in the prewar years.

In the late 1990s it drew modern-day equivalents such as Pamela Anderson, Steven Spielberg and Bill Clinton.

But in between those dates, the Adlon's history is a blank. Established more than 90 years ago, it has been in business for little more than 40 years. Fire closed the hotel in 1945, and the burnt-out shell remained imprisoned on the edge of the no-man's-land between East and West Berlin for the duration of the Cold War. When it reopened as a luxury hotel in 1997 it had been closed for longer than it had been open.

Now the Adlon has reclaimed its site and its past. It occupies one of the most prestigious addresses in the city - No 1 Unter den Linden - right in the new diplomatic heart. Diagonally across from the front entrance is the Brandenburg Gate, and just beyond that, the restored national parliament building, the Reichstag. The site of the new embassy of the USA is to the left; at the back is the lilac-coloured British Embassy, and to the right, the embassy of the Russian Federation.

The hotel was rebuilt from scratch on its original grounds, and its history ransacked by architects and designers who made sure the new mirrored the old. The history, however, means more than nostalgia and old-fashioned design. The marketing department is using the past to lure some of Berlin's highest-paying visitors, without spending a pfennig on advertising.

"When we opened the hotel, we didn't know if history was the right thing to play on," recalls Jean van Daalen, the Adlon's managing director. "But Berliners are very curious, and we had over 50,000 visitors coming through the hotel."

Some of those visitors were guests who had stayed at the original hotel, and who returned to the new building to relive their memories. "They sat in the lobby with tears coming from their eyes," says van Daalen. "They remembered the parties, the dinners, the teas with friends and family."

In a country so obsessed by the horrors of the past, van Daalen stresses that the elderly Berliners visiting the Adlon today remember "the nice history, not the catastrophe".

The returning guests are called the "multipliers" by van Daalen. They are the people who spread the hotel's reputation by word of mouth. "Most of our visitors in the first two years were people in their 30s and 40s, who had been told about it by their parents."

It's only by historic chance that the modern Adlon is on the site of the ancient one. Adlon's main competitor in Berlin bought the rights to the hotel's name and land after the war. The purchase was an act of generosity towards Adlon's impoverished wife.

Berlin had just been divided between the victorious war allies. The Adlon was just in the Russian sector, and talk of reconstruction was just fanciful. Then came the Berlin Wall. "At that time it was looked on as a silly, emotional payment," says van Daalen. "Fifty years later it was a real stroke of genius, but I'm sure the gentleman who made the decision at the time had to explain it many times."

There was cunning behind the luck, though. Adlon's competitor had earlier also bought land next door to the old hotel, to prevent it from further expansion. When the wall finally came down, the spin of the corporate wheel left the Adlon's original site, its neighbouring property and the golden name itself in the hands of what is now the Swiss/German leisure company Kempinski.

The new Adlon is 40% bigger than the old, and plans are well advanced for a new wing for conference and meeting facilities.

The celebrated history and prominent address allow the hotel to charge the highest rate in Berlin - nearly 30% higher than its competitors - and among the steepest in the whole of Germany. By comparison with rates in other international cities, however, it looks decidedly cut-price. The inclusive rack rate for a standard double room at the Adlon is just over £200 a night. The London Hilton on Park Lane charges close to £400 a night, while the George V in Paris is even higher.

Van Daalen knows his rate should be higher by at least another third, but no amount of well-sold history will allow him to increase it. His international customers may believe they are getting a discount, but he knows his all-important German customers wouldn't tolerate a rise, and he dare not annoy them. The hotel is heavily reliant on domestic trade; 65% of all visitors to the Adlon are from Germany, and many of those are travelling for pleasure, not business.

If he had more international business travellers, he might be able to charge more. He might also be able to fill more rooms. The hotel had an average occupancy rate of just 67% last year. This year, with the slowdown in the world economy and the stagnation in Germany's wealth, he's hoping for 62%.

And van Daalen reckons his empty rooms will remain unused, simply because the hotel is in Berlin. He blames the low occupancy figures on the city's continuous and very public reconstruction, its isolated geographical location, and the lack of a proper international airport. He predicts big growth - eventually - as the European Union expands eastwards, giving Berlin a new hinterland.

Until then, little will change. After all, history can go only so far.

Hotel Adlon

1 Unter den Linden, Berlin.
Tel: 00 49 30 2261 0
Web site: http://www.hotel-adlon.de Number of employees: 517 (including 70 trainees)
Rooms: 286 (128 no smoking) Suites: 51
Total sales 2000: DM70.8m (£22.8m)
Gross operating profit 2000: DM21.6m (£7m)
Turnover by sector: accommodation - 51%; food and beverage - 44%; miscellaneous - 5%
Business mix: 33% leisure travellers, 33% business travellers, 33% meetings and conference guests; 65% German clients, 35% rest of world
Inclusive rates 2001: Double room exclusive - DM610 (£196); double room superior de luxe - DM760 (£245); suite - DM4,900 (£1,580)
Average rate 2000: DM505 (£163)
Projected average rate 2001: about DM560 (£180)
Target occupancy: 70-75%
Average occupancy 2000: 67%
Projected average occupancy 2001: 62%
In-room facilities: portable phones, private fax number, PC docking facilities, ISDN lines, voice-mail
Catering and bar facilities: three restaurants (from 28 to 150 seats), two conservatories (32 and 28), lobby lounge (45), American bar, pool bar
Conference and meeting facilities: ballroom (360 people), three conference rooms (30 each), 12 function rooms, six private dining rooms (60 in total)
Other amenities/facilities: swimming pool, whirlpool, sauna, solariums, massage room, gym, two rooms for the disabled, 30 business rooms with separate sleeping, living and working areas with kitchenette

Next in the series: Reid's hotel, Madeira, 25 October