It isn’t always easy living down to the reputation of being “poor but sexy”. Just ask Berlin’s governing Mayor Klaus Wowereit who coined the phrase. After the recent Karlsruhe constitutional court ruling dismissing Berlin’s claim for emergency federal debt aid, the city’s politicians now find themselves guck(ing) in die Röhre (out in the cold) and paralyzed and anything but sexy (they’re still poor, though).

But leave it to private industry to take the initiative and get things rolling again. Berlin might be as poor as a church mouse when it comes to the city’s finances, but big money keeps opening luxurious five-star hotels here right and left. And because demand for five-star hotels is right to the left of center in a city like Berlin right now, wealthy guests get pampered royally here paying five-star hotel prices well below those they would have to pay in other European cities.

Adam Smith would tell you it’s the good-old invisible hand of supply and demand all over again. In a fiercely competitive market, competitors have no other choice but to lower their prices, and there are simply too many four and five-star luxury hotels in Berlin at the moment.

Whereas the average cost of a night’s stay at a Berlin five-star is approximately 127 euros ($162), a night in Paris (na, na – the city as in France – but the Hilton if you want) will set you back 282 euros. That’s more than twice as expensive.

So I guess my question is, when is all the fierce competition going to start taking place at the Berlin city level, Klaus? Oh, we just had an election, you say. Pech gehabt (tough luck), suckers.

And that’s too bad. It seems to be just one small step from poorness to cheapness. And cheapness is just what this country needs these days. Umm, I think.

Come visit me at Observing Hermann…

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