Can a Hotel Lift Air France-KLM?
Joe Cortez June 07, 2018
Air France-KLM could have a new investor from an unlikely source. AccorHotels announced their interest in buying up to 14 percent of the airline, the amount currently held by the French government. Although the exchange could bolster the carrier, analysts want to know what Accor sees in the parent company of two flag carriers.
Air France-KLM could get some needed assistance from another travel partner – but not another airline. Reuters reports AccorHotels wants to purchase the company shares currently held by the French government.
The state has struggled to help the airline cope with major business changes, leading to a string of strikes. In a statement issued on Sunday, June 3, 2018, Europe’s largest hotel group by rooms announced their interest in taking over the 14.3 percent currently owned by the government.
“Over the past years, AccorHotels has held discussions with Air France-KLM, notably with a view to developing joint digital projects as well as a joint loyalty and services platform,” the AccorHotels announced in a press release. “Reflections included the potential acquisition of a minority stake by AccorHotels in AirFrance-KLM, in order to strengthen the industrial growth project.”
Purchasing the French government stake would fall in line with AccorHotels’ current growth strategy. In 2018 alone, the hotel company bought corporate and contract catering company Adoria, table reservation platform ResDiary, Chilean company Atton Hotels and closed their deal with luxury resort brand Mantra Group. Adding the stake in a major European airline could keep customers within their sphere of influence throughout their entire trip.
But while a minority share from the hotelier could be good for the airline, analysts are skeptical the benefits could run both ways. While both companies could benefit from encouraging customer crossover, concerns exist over whether a stock purchase is the right route.
“While the strategic rationale for Accor is there, we wonder why this cannot be achieved by a commercial partnership without any equity stake,” analyst Richard Clark from Bernstein told Skift. “Air France-KLM currently has no CEO, no evident strategy to solve its labor crisis, and is highly exposed to rising fuel prices; and more cyclicality, all of which are not positives for valuation.”
Air France-KLM have not offered a public comment on the developing situation.
[Photo: Shutterstock]
As a former waiter, I loved the tip system. I strived to provide exceptional service, and I continually earned more than my less motivated co-workers. People routinely requested me, so even on a slow night, my section was jumping. That said, a couple of recent experiences have bothered me. I ordered room service at a hotel. Of course the sandwich was ridiculously expensive and a can of Coke was $5, but then they tacked on a $5 service charge, and an 18% gratuity was applied to the entire check, including the service charge! Then they hand me a check with a blank space for an additional tip. If I had eaten in the hotel restaurant instead, 18% would already be a decent tip, and I would have avoided the $5 service charge. The room service waiter made exactly one trip to my room. He did not even have to pick up the dirty dishes, as those are left for the maid. If I had eaten in the restaurant, that waiter would have made several trips to my table, refilled my water, removed my dirty dishes, etc. He would have actually earned the 18% gratuity. As for the $5 room service charge, that is just another FU fee that hotels tack on. If anything, I think there should be a discount for room service, because I am not taking up valuable space in the restaurant. It is effectively a "to go" order. In a separate incident, I recently dined at a restaurant in Vail, where they tacked on a 2% service charge "to help pay our employees better." Screw that! If you need to charge more for your food to have a viable business, then do so, but simply tacking on additional fees is unacceptable.