Elegance is `In' in Eastern Europe. Communist regimes find that luxury hotels bring prestige - and coveted hard currency. WOOING WESTERN TOURISTS

AT the corner of Friedrichstrasse and the Unter den Linden, a top-coated doorman opens the solid brass doors. Suddenly, East Berlin's repressive gray sea gives way to an island of marble staircases, stylish furniture, and fresh orchids. This is the Grand Hotel.

Throughout Eastern Europe, communist regimes are finding that luxury hotels are prestigious and practical. Prestigious, because they show that East can do as well as West. Practical, because they earn much-coveted hard currency. No matter if some impoverished Easterners are left staring in awe at the dreamland.

``Never seen anything like it,'' wows Mathias, an impressionable 15-year-old East German, standing at the top of the sweeping domed lobby. ``In the bathrooms, you use a towel once, then throw it away.''

Imagine that, plus saunas, marble swimming pools, solariums, cable television, fitness centers, and florist shops. And don't forget, chirps the charming chief of protocol, Giselle Weschke, the hotel has two gourmet restaurants plus four other eating establishments, each with its own music to match the mood.

No wonder that, when the World Bank recently met in West Berlin, many of its top managers preferred to stay here at the Grand and shuttle back and forth across the Berlin Wall.

``It's simply marvelous,'' purrs chic Austrian businesswoman Astrid Hausmann. ``The staff is helpful, friendly, everything quiet, luxurious, it's one of the best hotels I know, east or west.''

Traveling in East-bloc countries wasn't always so welcoming. Until the late 1970s, the few new hotels that were built were impersonal modern disasters, cold and shoddy concrete monsters, which soon wallowed in layers of dust and peeling paint.

Pity the poor journalists covering the recent rioting in Kosovo, Yugoslavia: Its five-star Grand Hotel remains infamous for its half-made beds, broken light fixtures, and cold-water-only showers.

Old hotels which survived the war were left to rot or were badly restored. The once elegant Gellert in Budapest saw its soaring baroque entrance hall filled with Stalinist columns. Warsaw's Bristol deterioted so badly that it finally had to be closed down.

``For many years after the war, we didn't have a single luxury hotel here in Berlin,'' recalls the Grand Hotel's manager Helmut Frohlich, relaxing in the sunlit first-floor chamber amidst soothing piano music. He explains that ``luxury'' used to be equated with capitalist decadence, and the priority had to be on solving working class needs.

That philosophy has vanished. In the 1970s, East-bloc governments began competing for wealthy visitors, easing visa restrictions, and building modern intercontinental hotels.

Reform-minded Hungary plunged into the luxury business with special vigor, building a total of seven splendid new hotels. One, the Forum, has won the award for the ``Best Business Hotel'' in Europe. From the moment a guest enters, he is pampered by an efficient, pleasant staff, who will even fix personal computers if asked.

``When Western visitors come,'' beams the Forum's former director Akos Niklae, ``we show them that people here don't live too badly.''

Then again, some East Europeans still have to learn how to run a luxury hotel. At many the five star Europejski in Warsaw or the Jalta in Prague, it can take an hour to check in and another hour to pay the bill - even if there is no other guests lining up in the lobby. And that's if the staff honors the reservation. Say hello to a concierge, and his greeting often is, ``No rooms!''

``Lufthansa flies in everything,'' admits Flemming Jenson, the Danish manager of Sofia Sheraton, ``from the toilet paper you see in the bathroom to the black bread you eat at breakfast.''

East Berlin's Grand Hotel also depends on Western expertise. A product of Swedish design and Japanese construction, it took 27 months to build at a cost which, management says, isn't known.

For the average East German, the Grand is unaffordable. All rooms are priced in West German marks - ``We must pay back our loan,'' Frohlich explains. A single room starts at about $170 a night. The fanciest room runs for about $1,800. Without the special conference room and the private sauna, it can be had for about a mere $1,200 a night. That still equals a year's salary for the average worker.

At the Grand, banned Western publications such as the International Herald Tribune are sold. ``We even have a major library of video films and CD discs,'' says receptionist Ariane Dimiris. ``Maybe we wouldn't get you a porno flic for you, but anything else is OK.''

Guests may rent a Mercedes or BMW, while normal citizens feel lucky to have a two-cyliner plastic Trabant. There's even a limousine service for guests who need to go back and forth across the Berlin Wall. East Germans find the border much less permeable.

``This is like in the West, isn't it?,'' receptionist Dimiris asks. She isn't sure? ``I've never been to West Berlin,'' she admits.

``Some people complained, of course,'' admits Manager Frohlich. But he is proud, not embarrassed, by his hotel's riches. The Grand Hotel's manager may be a Communist Party member. But he also is a businessman.

``It's simple,'' he explains. ``We must do something for the tourist trade.''

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