In May 2001, Raffles Holdings more than doubled its room inventory overnight with the S$430m (£163m) acquisition of 23 Swissôtel properties from the SAirGroup, the former owner of the now-defunct SwissAir airline. It was a deal that was put together by Swissôtel's senior managers, including Meinhard Huck, who had joined the company in 1997.
Huck recalls the process. "We were one of 157 companies owned by the SAirGroup, and we didn't feel that the Swissôtel brand was getting the attention it needed," he says. "We needed to find a new owner to ensure that the brand would continue to exist and that the management team would have a future. So we obtained approval from SAirGroup to go ahead with a sale and invited bids. We looked at a number of possible partners, but it was only Raffles that fitted the bill."
Through the deal, Raffles Holdings gained ownership of the Swissôtel brand and its trademarks and management contracts for 23 hotels, including those of six majority or wholly owned properties and minority interests in three other hotels. It also increased its inventory by 139% to 13,457 rooms, bringing the overall hotel tally to 38 properties in 33 destinations.
The Swissôtel properties all now bear the Raffles name and are managed by Raffles International, the management arm of Raffles Holdings. So, for example, the Howard in London is now known as Swissôtel London, the Howard, managed by Raffles International. Confusing? Well, a bit, admits Huck, but not out of kilter with the aggressive marketing of the Raffles name that the Swiss“tel acquisition facilitated.
There are some plans to rationalise branding overload. Before the acquisition of Swissôtel, Raffles already had a subsidiary brand in the form of Merchant Court, a four-/five-star brand. All of these are now being converted to either Swissôtel or Raffles properties, to give a more streamlined operation.
Existing hotels in the Raffles portfolio are also receiving an enhanced Raffles touch. In March this year, four Landmark hotels took the Raffles name where previously they had been trading under their own identities. They have now become the Raffles Hotel Vier Jahreszeiten, in Hamburg; Raffles Brown's Hotel in London; and Raffles Hotel Le Royal Phnom Penh and Raffles Grand Hotel d'Angkor Siem Reap, both in Cambodia.
Future developments in the pipeline include the roll-out of spas and lavish food and beverage concepts, already under way in Asia. There are ambitious expansion plans, too. Paris, Barcelona, Rome and Munich are all on the wish list, and a 160-room resort hotel in Majorca is under development.
Will new properties be owned or managed? "Well, of course, we would prefer to be asset-light," responds Huck, "but first we have to prove our credentials as a management company. We wouldn't rule anything out." Whatever method of expansion is chosen, the overall plan is for 25,000 rooms by 2005.
As for Swissôtel, the majority of the management team survived the acquisition, achieving their aim. Huck himself is now senior vice-president of Europe, Middle East & Mediterranean, Raffles International Hotels & Resorts.
Raffles and Swissôtel