World Hotels: Little Room and Big Boom

THE golden age of tourism and business travel has drawn the world's innkeepers into a building spree. Led by aggressive U.S. chains, hotel expansion is honing competition in dozens of countries, and the travel boom is transforming entire economies. The construction splurge is aimed not only at American travelers, who are booking foreign tours in rising numbers despite the domestic economic slowdown, but also at travel-hungry Asians and Europeans.

Economical jet travel has helped lift the demand for accommodations so rapidly that hotelmen in many countries are swamped with business. Without much exaggeration, French National Tourist officials insist that not a single hotel room will be available in Paris until after October's auto show. London hotels are so packed that companies in need of space for executives cozy up to room clerks by treating them to elaborate lunches. Greek hotelmen are braced for a 30% increase in tourism this summer. The lure of Expo 70 has not only jammed Japanese hostelries, but contributed to a squeeze in Singapore, 3,000 miles away.

Motels for Europe. The building rush to meet this demand is most apparent in Europe. Five new hotels will open in London this year; another 30 are due to transform the city's skyline by 1975. Amsterdam is adding 50% to its hotel capacity. In France, where 60% of the hotel space was built before 1914, hotelmen foresee a spurt of construction in Paris and along the Cote d'Azur. The Soviet Union opened a new hotel for foreign tourists this spring at the Black Sea resort of Sochi, will open a second in Leningrad this summer, and is putting up three more in Moscow. In Hong Kong, about 3,500 hotel rooms are under construction.

Every major U.S. hotel chain is expanding fast overseas. In more foreign places than ever before, travelers this year will be cooled by U.S.-style air conditioning, mellowed by martinis and sustained by steaks at hotels with such reassuringly familiar names as Hilton, Sheraton, Inter-Continental and Holiday Inn. "We reckon the opportunities abroad, particularly in Europe and Latin America, are as great for us as they were in America when we started in the '50s," says Kemmons Wilson, chairman of the 1,200-unit chain of Holiday Inns. Having opened its first European inn two years ago at Leiden, The Netherlands, the company is building 15 more in Belgium, England, Austria, Italy, Germany, Portugal, Greece and Luxembourg; it is also drawing plans for an additional 47. Esso Motor Hotels, a subsidiary of Jersey Standard, already has 41 outlets in Europe and expects to have 70 soon.

Finding Money. The airlines are 'particularly active hotel builders. Inter-Continental, which is owned by Pan American World Airways, is building in Prague and Bucharest, and this month the 360-room Duna Inter-Continental opened in Budapest. Hilton International, which is owned by Trans World Airlines, this year will add four more hotels from Abu Dhabi to Zurich to its chain of 51 in 33 countries. United Air Lines plans to acquire Seattle-based Western International Hotels to form another formidable travel and lodging combine. An American Airlines subsidiary has just opened the 21-story Chosun in Seoul.

The scarcity and high cost of money in the U.S. have barely affected the overseas hotel surge. Both Hilton and Inter-Continental use local partners as sources of funds. Loew's followed that pattern in London by taking a lease on the Churchill, a luxurious hotel that opened last month. Sheraton is building a 1,200-room luxury hotel in Munich as part of an $865 million expansion program backed by the huge resources of its parent, International Telephone and Telegraph. Sheraton's 1,000-room hotel in Paris' Montparnasse, due to open in 1974, will be France's largest; the company is also erecting hotels in Stockholm and Buenos Aires. Jose Melia, Spain's largest hotel operator, is also building the 1,000-room Melia Castilla. in Madrid. Some governments follow Berlin's example by giving tax concessions on tourist construction. Results vary: 25 hotels are under way in Singapore while three are rising in Rio de Janeiro, including the circular Nacional, a 38-story tower.

While U.S. hotelmen build almost entirely for the luxury market abroad, they place less emphasis on ornate decor than on such modern conveniences as escalators and automatic elevators, TV sets in rooms and ice-cube machines in corridors. Construction costs overseas-- $30,000 to $40,000 per room --are as high as in many U.S. cities, and few new U.S. hotels abroad match the grand luxe service of the best of the older foreign-owned hotels. But traveling Americans like U.S.-style hotels for their informality, speedy checkin, reliable phone service and fast meals. Europeans, who have been accustomed to more elegance, unction and haute cuisine, also seem to fancy the same American touches. Hilton's steakhouse in Paris to which beef is flown from the U.S. --is often so crowded with French patrons that hotel guests cannot get a table.

Georg Walterspiel, co-owner of Munich's famed old Vier Jahreszeiten, predicts that new U.S. hotels will create "murderous competition in the top class." To meet the American competition, five foreign airlines--BOAC, British European Airways, Lufthansa, Alitalia and Swissair--have teamed up with the London investment banking house of S.G. Warburg and four Eu~-ropean banks to form European Hotel Corp. The combine plans $50 million worth of hotels for the neglected low-price end of the market in London, Paris, Rome, Frankfurt, Munich and Zurich. The American challenge last month prompted a merger by two of Britain's hotel giants, Forte's and Trust Houses, into one of Europe's largest operations Complains Chairman Charles Forte: 'Too many people are dashing into the hotel business thinking it's easy money. They poach our top-class men and damage the industry."

Competition has become so fierce that some London hoteliers have taken to writing glowing references for deadbcats on their staffs. They have managed to unload many on American rivals. One well-recommended doorman hired by a U.S. hotel turned out to be a real liability: he spent his spare time slashing the tires of cars that he had just parked.

A Guide to the Space Race Abroad

Despite widespread building, good-quality hotel space is scarce and in some cities virtually unobtainable without early reservations. A summer sampler of tourist centers abroad

CITY AVAILABILITY PRICES* EUROPE & NEAR EAST

Amsterdam Tight $10-30 Athens Tight 10-30 Berlin Easy 15-25 Brussels Easy 17-25 Copenhagen Veyr tight 10-30 Dublin Tight 12-28 Geneva Tight 10-25 Hamburg Easy 20-30 London Very tight 18-40 Madrid Very tight 12-20 Moscow Tight $---40 Munich Very Tight 23-32 Nice Tight 10-26 Paris Very tight 14-60 Rome Very tight 20-48 Stockholm Very tight 20-36 Tel Aviv Very tight 12-25 Vienna Tight 10-40

ASIA

Bangkok Easy 10-21 Hong Kong Tight 10-35 Tokyo Very tight 17-33

LATIN AMERICA

Buenos Aires Tight 21-30 Mexico City Easy 7-32 Rio de Janeiro Easy 20-70

* Prices in left column are for modest rooms, and in right column for top accommodations in a luxury hotel. (Only "De Luxe" accommodations are available for Americans visiting Moscow in summer.) All services are for double room. Taxes and mandatory service charges often add 10% to 25%.

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