AW:}} We are examining the opportunity to conclude marketing alliances. This is a natural direction that makes sense, but at the same time our orientation is more towards a niche strategy, which does not require a very large network. If Steigenberger enters into the game with the world’s giants, it is lost. On the other hand, by staying on the niche segment we can get to know customers more individually. The goal for our loyalty program is not to collect points but to offer benefits to our customers. We will have to be clever to develop distribution, which is typically a weak point for small groups.André Witschi: The beginning of 2008 was clearly in keeping with the trend of the previous years in Germany. The last quarter, on the other hand was much harder. After a few isolated drops in Germany’s major business centers, the turnaround confirmed itself more globally and more significantly. Fortunately, our group was less affected because of our high concentration of national and Alemannic clientele. Our second bit of good fortune is that we are firmy standing on two legs. Business may have slowed at the Steigenberger hotels, but hardly not at our midscale InterCity hotels. Our business forecasts for January 2009 are higher than the level in January 2008. My hotelier colleagues in Germany are ma-king the same observation and some even hope to see improvement thanks to changes in customer behavior that will favor the economy hotel business.HON: Will you orient your development differently by accelerating your projects for the InterCity brand, which is less affected by growth cycles?AW: The direction for development was adopted prior to the cri-sis and we will not change. We had already planned to close ten or so hotels in the Steigenberger Hotels & Resorts chain because they no longer correspond to the level of luxury that we wish to maintain. For some we will end the management or lease contract, as for others owned by our shareholders, we will continue to manage them, but not under the Steigenberger banner, by eventually choosing another brand of hotel chain. It is very important to me to reinforce Steigenberger’s luxury positioning. For the second brand InterCity, we are working on a different economic model that keeps the principal characteristics: midscale hotel in the center of town near major train stations, but since real estate is very expensive, we want to maximize the revenue of every square foot.HTR: What is the current breadth of your pipeline?AW:Today we have 12 hotels under development, 5 Steigenberger and 7 InterCity, with respect to a current inventory of 84 hotels, 50 Steigenberger and 34 InterCity.HON : Can the current context favor real estate investment maneuvers?AW: No, we are clearly a hotel management company with mostly lease contracts, and management contracts. Our shareholders, moreover, own several buildings but the strategy is not to increase this property inventory. A 200 million euro plan was adopted two years ago that will be invested in the renovation of buildings that we operate, and the Steigenberger family contributes a great deal to it. The last contracts that we signed are lease contracts with variable fees, with provision to opt out in case of loss. These are the kinds of “hybrid" contracts that are popular right now.HTR: Will the franchise allow you to accelerate development?AW: This is not a priority strategy for Steigenberger Hotels. It is almost in opposition with luxury hotel operations. For InterCity, our approach is more towards partnerships with financial institutions or national developers so that we may move more quickly, particularly in Central Europe. We use differentiated development that is adapted to brands. That of InterCity only makes sense if we have a network that can play on synergies. For Steigenberger, on the other hand, our goal is to achieve a presence in all Europe’s major business centers: Amsterdam, Brussels, Paris and Rome. And in some cases, major secondary cities such as Lyon. .HON: You are clearly leaving your national development area…AW:The internationalization of Steigenberger Hotels AG is clearly one of the group’s major goals.HON: Aside from Germany, what other European countries are in your sites?AW: Central Europe naturally interests us because of its cultural proximity, Poland, Czech Republic… Discussions are under way in Russia and the Ukraine.HON: Aren’t you a bit late for these highly coveted markets?AW: The strength of the Steigenberger brand in Central Europe is exceptional. It is a reality that I had not fully estimated. It has a strong footprint in the Alemannic world and what’s more we have a reputation as a company that knows how to manage hotels in a difficult environment. In Germany, if you are not a good manager, then you’re dead. Taxes in Germany are some of the highest in Europe, such as the VAT and our average daily rates that are not as high as they are in France or the United Kingdom. But our reputation is not just based on good management but also on an art de vivre.HON: Was the FiFA World Cup in Germany tell tale?AW:The outside world realized that we have succeeded in blending the strength of tradition with modernity. In Germany we have a “deutsche Lebensart" –German lifestyle– that has no reason to be jealous of the rest of Europe. The transformation of our gastronomy is spectacular. The “children and grandchildren of Eckart Witzigmann”, the third generation of German chefs, propose superb, inventive Alemannic cuisine with a hundred starred restaurants. It goes hand in hand with an evolution in the quality of wines. The joie de vivre shown during the World Cup changed the image foreigners have of our country. We have a cocktail of ingredients of Germanness, which also includes design, industrial quality… and which we can deploy in a group like Steigenberger. It is very well received when I carry out negotiations outside Germany. I am already working on partnerships with major brands of German products.HON: Will you pursue development Southward, to accompany German clientele on their holidays?AW:We are already doing this at resorts in Germany and Austria, and in the Italian Tyrol. We also have a historic presence in Egypt. In future developments, priority will be placed on upscale destinations, which tend to be served by regular airlines rather than charter flights. I am reticent about going into markets controlled by tour-operators. I prefer to favor individual clientele.HON: Is Steigenberger’s size sufficient for your ambitions?AW: We are examining the opportunity to conclude marketing alliances. This is a natural direction that makes sense, but at the same time our orientation is more towards a niche strategy, which does not require a very large network. If Steigenberger enters into the game with the world’s giants, it is lost. On the other hand, by staying on the niche segment we can get to know customers more individually. The goal for our loyalty program is not to collect points but to offer benefits to our customers. We will have to be clever to develop distribution, which is typically a weak point for small groups.