Steigenberger Offers First Chainwide Corp. Rates

<B> Steigenberger Offers First Chainwide Corp. Rates</B>

By Paul Needham

<I>Frankfurt</I> - German hotel group Steigenberger is launching reduced corporate rates chainwide in a bid to gain more consolidated business and end its high-priced image.

The new rates, as low as 20-25 percent below published prices in some cases, are based on the highest annual room night volume of a company at any one Steigenberger hotel. But they are valid at all Steigenberger properties throughout the year.

Each of the 59 Steigenberger hotels in Austria, Germany, the Netherlands, Spain and Switzerland now will offer local corporate rates in seven standard categories, starting with companies delivering just 20 room nights a year. The highest discount level will be for 2,000 room nights or more.

In the past, firms could only get a local corporate rate from an individual hotel if they booked at least 300 room nights a year, and they still had to pay rack rates at all other Steigenberger properties.

Corporations buying 300 Steigenberger room nights per year, for example, now will pay about $88 for a single room in Dresden instead of $106, and approximately $72 in Dessau instead of $96.

Steigenberger's new executive director of sales, Horst Schoenhaar, declined to give any rate reduction examples in major city destinations. But he did say that the hotel chain "wants companies to consolidate business with us. It is a way of replacing hotel loyalty with corporate loyalty."

The international sales department will negotiate the new rates with several hundred multinational customers, he added.

"We do not want to give the impression we are changing our prices," said Anton Wuestefeld, sales director for Germany. "We do not want to talk about discounts, but about fixed prices."

Wuestefeld said he believes the low room-night entry level, deliberately targeted at small and medium-sized companies that perceive Steigenberger as being high-priced, will have a big impact.

Since German hotel prices and the average length of stay could fall again slightly this year, however, any new price cut would likely affect service, and so reduced service offers would have to be introduced where appropriate.

In a move to fill more rooms on weekends, Steigenberger also is offering up to 50 percent off meeting rates for weekend conferences at 20 of its hotels.

As part of the business program, meanwhile, the group is centralizing corporate sales administration in Frankfurt and freeing up 100 sales executives to focus on closer client contacts and signing new accounts.