European Stars And Stripes (Newspaper) - May 22, 1988, Darmstadt, Hesse                                Page 18 the stars and stripes business news Dollar lost steam offer initial boost the Dollar jumped on foreign currency markets in the past week on news that the . Trade deficit shrank to $9.7 billion in March a three year Low. The Buck s Rise had lost much of its steam by week s end however As financial experts began questioning the staying Power of the american Export gains. The Trade figures gave the Dollar quite boost but the initial euphoria seems to have died Down one British trader said. A lot of people Are question ing whether this was t perhaps a one. Time   much of the improvement in Trade was linked to the weaker Dollar which makes american goods More at Tractive on foreign markets. The 23 percent jump in exports reported tuesday however appeared to Stem mainly from huge Gold shipments to Taiwan and the inclusion of several Large air Craft orders leaving traders suspicious of the Quality of the Commerce department figures. We re talking about Gold shipments three times higher than in february one West Ger Man trader said. Something does t  by Friday most traders were saying that the Export gains a record $29 billion did not signify that America s Trade problems were Over. While the Dollar posted its biggest gains against the West German Mark the Buck never made a significant break through the 1.70 Marks Barrier traders in Frankfurt said. The Dollar made far less Progress in Japan where it reached the 126 yen Mark before de Clining to previous Levels. There was consider Able Dollar Selling by japanese investor when the Greenback hit its High on wednesday Bank ers said. Trading in Japan since midweek has been sluggish. The Dollar dropped to around 124 yen following a statement by Martin Feldstein a for Mer White House economic adviser that the Greenback would reach 116 yen within the next year. Although the american currency gained initially against the British Pound Sterling had re gained most of its losses by Friday traders at the currency Market in London said. The Pound s recovery followed a statement on tuesday by prime minister Margaret Thatcher that she supports the policies of Chancellor of the exchequer Nigel Lawson who has been out spoken on the need for a lower Pound to keep British exports Strong. Traders there however believe British inter est rates will remain steady at their current 7,5 percent As a hedge against inflation. The Pound is looking quite Strong one trader said Friday. There remains a belief her that interest rates will remain High As a Means of fighting inflation and that makes the Pound More interesting to  the Central Banks played a double role in the Dollar s climb and decline in the past week Trad ers said. Fearful of being caught in Short positions should the Central Banks intervene to keep the Dollar stable some traders steered Clear of the currency completely braking its climb. Despite comments from . Treasury Secre tary James Baker Iii designed to assuage fears of revived inflation there remained Strong senti ment among traders that inflation in the United states will Rise during the rest of the year. Manufacturing As witnessed by tuesday s Export figures remains Strong and agricultural commodities have jumped in the last few months As have import and consumer prices they noted. Those factors will fuel moderate inflation in 1988, the experts believe leading to higher interest rates and a stronger Dollar As the year plays out. Arc $1.16 million in red because of shrinking Buck by Charlie Bowden Munich Bureau Garmisch West Germany despite a 36 per cent increase in Gross income fuelled in part by a jumping occupancy rates the armed forces recreation Cen Ter still came out $1.16 million in the red in fiscal1987. The biggest Impact said James Mccrindle arc interim executive director has been the decline in the value of the Dollar which increased labor costs by More than $2.5 million last year. The problem is still obviously one of expenses exceeding revenues he said. Occupancy rates increased from 74 percent in fiscal 1986 to 83 percent last year. And the Dollar s drop was credited with drawing More people to the military Chain of bavarian hotels and recreation centers Al though arc officials believe an aggressive sales Campaign also contributed. Overall Gross income jumped from $ 13.2 million i fiscal 1986 to $17.8 million last year. The majority of the increase came from room rentals up 14 percent and food and beverage sales which jumped 73 percent. Part of the better showing in food and beverage income can be attributed to a slight increase in prices Mccrindle said but primarily it s the result of More customers. As the Dollar has dropped we be definitely gotten More food and beverage business said army maj. John Jefferis general manager for the Garmisch recreation area. The people who were Here before and May have eaten in local restaurants we re now getting More of that business in our  another key Factor was the reopening of the restau rant in the von St cuban hotel in Garmisch which had been closed nearly 19 months for a renovation project Jefferis said. The hotel s restaurant which specializes in French cuisine has been averaging about $55,000 a month in business since it reopened in August 1986. The increase in business however was not enough to offset expenses and arc came up Short for the second straight year. Still the 51.16 million loss i fiscal 1987 was somewhat better than the $ 1.33 million deficit arc posted in fiscal 1986. The Dollar lies at the heart of arcs problems. In fiscal 1986, with a pegged Exchange rate of 2.31 Ger Man Marks to the Dollar arc Tabor costs were Al most $8.3 million. In 1987, at a 2.15 rate and with slightly smaller work Force costs increased to $10.7 million. The pegged rate is determined at the beginning of the year based upon organizational budget forecasts and the Exchange rate. However when the Bills come due those organizations must buy foreign currency at the current rate. In 1986, 60 percent of arcs German Mark expenditures went toward its payroll. That increased to 85 percent last year Mccrindle said. That s purely in the decreased value of the Dollar he said. Every 5 pfennig drop below the budgeted Mark rate costs arc $500,000. Officials Are continuing a review of major foreign currency expenses but the Only significant change has been dropping the toll free reservation number that Cost arc about $30,000 per month. Its loss was offset by an increase in the numbers of military lines into the Central reservations department said arc spokesman Harry Connors. Army and arc officials do not expect to get out of the red until the new Garmisch hotel approved last week is built. That hotel is a key Factor in cutting expenses Mccrindle said. Now we have five of everything in Garmisch when the new hotel is completed in about three years the five current hotels in Garmisch probably will be returned to Usa eur and All of the facilities consolidated into the new hotel and recreation Complex. Instead of five hotel managers for example there would be Only one. Officials remain optimistic however about the future of the Overall arc operation with a modernization program at the Chic see hotels serving As the springboard to  and eventually the new hotel in Garmisch. Chic see is the Way that we d like the Way that occupancy % of occupied rooms Well have the hotels in arc when we have All the rooms in  renovated and upgraded and the new hotel Here in Garmisch Mccrindle said. While the organization is getting its Facelift some internal surgery also is on tap partly a result of the change in management and partly at congressional insistence. A few years ago arc had a commander and nearly 100 military people spread throughout various departments. Soon there will be Only two officers with the rest of the positions including the top spot converted to civilian professionals. Since control of arc switched from Usa eur to the army in March a transition team headed by col. Lewis Turner of the army s Community and family support Center has been looking at possible ways to Cut costs. The army also is taking Over the Hale Koa hotel in Hawaii and the dragon Hill Lodge in Seoul South Korea. The centralized management will allow for bulk buys of some items from sources in the United states rather than smaller volume purchases in the foreign countries Turner said. Other changes include eventually discarding a $2.1 million Central reservations operation As the army converts the hotels in West Germany Hawaii and South Korea to a Standard accounting system. There Are two or three reservations systems out there that Are compatible with our property manage ment system Turner said. Regrettably the one that we have Here now is not officials also Are examining arcs budgeting pro Cess and setting of room rates Mccrindle said. The budget drives the room rates he said pointing out that arc apparently had decided on room rates and then attempted to establish a budget that s the wrong Way to do it the renovated Section of the Lake hotel at Chick see which reopens july i will have room rates based on the Cost to renovate and maintain the rooms he said. For example a double room with View of the Lake rents for $42, compared to $34 for a double in the von St cuban or Patton hotels in Garmisch. The pricing policy could change dramatically for next year Mccrindle said. Officials Are considering converting to a sliding scale rate with different prices for rooms based upon rank or Grade. But the major Effort is aimed at increasing occupancy including a push to draw More conferences. The biggest thing we Are trying to do is continue with a real aggressive sales Effort to increase occupancy Mccrindle said. When occupancy Levels go up obviously the spinoff business increases whether its food beverage or recreation. That s critical to