Swiss Leverage Hotel, Air
<I>New York</I> - The era of airline-owned hotel companies ended in breakups, but Swissair and Swissôtel are forging ahead, harnessing their synergies in 15 cities worldwide with programs to reward corporations that count both the airline and hotel chain among their preferred suppliers.
If successful, the airline-hotel team would be the first to court the traveler with joint benefits and discounts beyond miles and frequent-stay points.
By next year, companies that strike deals with both suppliers will reap discounts or rebates beyond their negotiated rates. By this summer, any traveler who flies Swissair or its code-sharing partners-Air Canada, Austrian, Delta and Sabena-and stays with Swissôtel in North America will be able to check into the hotel while checking in for the flight. A Swissôtel limo or shuttle bus will whisk arriving passengers from airport to hotel. The service, called Seamless Travel, will roll out this year to Europe and Asia, said William Dowling, Swissôtel's senior vice president of marketing and corporate communications.
Passengers who book a partner airline through Swissair also will be eligible for the Seamless Travel program. Those booking partner airlines directly will gain the shuttle service with on-board hotel checkin-provided they notify Swissôtel.
Cities such as Zurich, where Swissôtel owns a shuttle, will provide the service cost-free. But in cities such as New York, where the hotel will need to outsource the shuttle, passengers will pay a standard taxi fare or less-even when the service is a limo. "We hope to take the hassle out of the travel experience," said Swissôtel president and CEO Andreas Meinhold.
Swissôtel has properties in four U.S. cities-Atlanta, Boston, Chicago and New York-and 11 overseas cities: Amsterdam, Bangkok, Basel (Switzerland), Beijing, Brussels, Cairo, Dusseldorf, Istanbul, Montreux (Switzerland), Seoul and Zurich. All are served by either Swissair or a partner airline.
Meinhold is not discouraged by the list of failed airline-hotel partnerships, which includes Pan Am and Inter-Continental, and TWA and Hilton International.
"In spite of the past being testimony to unsuccessful ventures of airlines owning hotel companies, I have made it one of my goals to prove that wrong," Meinhold said. The airline, in fact, was never sure whether it even wanted to be in the hotel business until 15 months ago, Meinhold said. "So we've really only just started out with a new shot at life," he noted.
Swissôtel and Swissair should fare better than past airline-hotel teams because each holds a reputation for quality and neither is large enough to incite competitive backlash, said Rolfe Shellenberger, senior consultant for Runzheimer International.
Allegis-formed when United parent UAL Corp. bought Westin Hotels in 1970, Hertz car rental in 1985 and Hilton International (from TWA) in 1987-collapsed under shareholder resistance, Shellenberger said.
"The airline-hotel companies of the past ran their identities together," said Ulrich Wohn, Swissair's director of marketing services. "Swissair and Swissôtel are separate profit centers-they can't draw on each others' cash flows. One of the truest differentiations is how we work together to find any possible synergies."
Swissôtel was founded in 1980 by Swissair Associate Companies Ltd. (which was then the name of Swissair's parent company) and Nestle Ltd., which sold its share six years ago. The parent restructured in March and is now called SAir Group. It includes the SAirLines division, of which Swissair is a part; and the SAirRelations division, which oversees the hotels.
American Airlines' acquisition of Americana Hotels in the late 1960s started fizzling about 10 years later because the chain needed an overhaul that the airline could not afford, Shellenberger noted, while Pan Am and TWA fell into financial trouble and had to sell their hotel chains.
Swissôtel already has launched a first round of synergies, adding the tagline of "Swissair's preferred travel partner" to its logo.
Since January, every Swissôtel room features a direct line to Swissair, enabling the guest to press one button for a connection to airline reservations. Many Swissôtels also offer on-site Swissair checkin counters for travelers who carry on their luggage.
Travelers booking both Swissair and Swissôtel need only call Swissair for both reservations. In-flight videos and publications have begun to market Swissôtel, and the Fly Swissair, Stay Swissotel program awards upgrades and 250 bonus Qualiflyer miles to hotel guests who present their Swissair ticket jacket. The hotel and airline sales forces also have begun to pool information on key corporate accounts to gain more background when calling on new clients.
Next year, corporate clients who become Club Swiss members-the chain's plan for companies that book 50 to 200 room nights a year-and key accounts with both the hotel and airline companies will receive either a partial rebate on their airline ticket or a discount on their hotel stay beyond any corporate discount they might already have, Dowling said.
Swissôtel's upcoming Club Swiss Gold and Swissair's Qualiflyer loyalty programs also will join forces sometime next year, offering extras to travelers who belong to both clubs.
Club Swiss Gold, which is signing up members, will feature upgrades, priority reservations and complimentary use of various hotel facilities, in addition to mileage from Swissair, Delta, SAS and All Nippon Airways. The joint program might offer restaurant, museum and theater discounts.
Swissair's commitment to keep Swissôtel also has swung open doors for growth. The hotel chain plans a leap to 60 hotels by the year 2000. Last year, the chain launched a joint venture with the Hong Kong-based Swissbel hotel group, which manages four independent hotels in China and Southeast Asia and has another five under construction. In October, the chain hired former Regent hotels executive Rudolf Greiner to head up its Far East operations.
The hotel expansion provides for further airline-hotel syngergies, as Swissair and its partners together serve more than 300 cities, compared with the 130 served by Swissair alone.
"We now have a full setup of Asian operations out of Hong Kong, providing technical assistance to developers, feasibility studies and a reservation center," Meinhold said.
The Swissbel hotels, which now share Swissôtel marketing and reservations, will switch to the Swissôtel flag upon upgrading, Meinhold said.
Meanwhile, the chain just last month opened a Brussels property and plans to unveil four new hotels in China and Southeast Asia this year. The chain also has launched construction on its first full-fledged resort, in Sharm El Sheikh, Egypt, set to open in 1998.
The chain's growth spurt "won't happen hotel by hotel," Meinhold said. "We will acquire, merge or joint venture with other medium-sized partners.