Meet The “Ritzy” Swiss Unicorn Locking Horns with The Hilton Group

ZURICH, SWITZWERLAND / ACCESSWIRE / September 10, 2020 / Was that a Ritzy young unicorn you heard rutting during the coronavirus outbreak in the Alps this Spring?

Because, a century after “the king of hoteliers” and Swiss icon Cesar Ritz saw his Paris-London hotel chain eclipsed by his US nemesis Conrad Hilton, Swiss tech startup Le Bijou might be about to reclaim the five-star hospitality crown for Confederatio Helvetia.

Founded by Swiss entrepreneurs Alexander and Madeleine Hubner in 2011, the “contactless living” hotel chain is today threatening to end US hegemony of the luxury hospitality industry.

The Hilton Group hotel chain though, which is still owned by its namesake socialite heirs, will surely fight to adapt to the new paradigm. Even if they receive a massive bailout from the US treasury. However, it remains to be seen whether the Hiltons can resuscitate a business which was showing signs of ill health long before the coronavirus struck.

The US juggernaut’s five-star hotels, with their labyrinthine structures crammed with hundreds of guests and staff, today appear more of a health hazard than anything else.

But the Swiss, with their technological nous and remote management, have maintained healthy revenues by keeping their guests safe and secure. So, in the wake of the pandemic, a one billion dollar valuation for the world’s first remotely managed hotel chain, hardly seems fanciful.

Flighty investors gobbling Le Bijou bonds testify to that sentiment. Many also seem to think that, as a shelter for dwindling funds, Switzerland is once again unbeatable. Especially in a world going through the first major upheaval of the 21st Century.

Venture Capitalist and Moonshot CIO David Fishman, says we could be looking at a unicorn in the making: “The Hubner’s might have created that rarest of breeds: a Swiss unicorn. And even now it might be a business with a valuation of over one billion USD. In the crisis it has proven to be a highly stable business model and closing the next funding rounds will be a piece of cake. It should be clear to everyone that their fully automated hotel apartments will continue to receive high demand in the post-pandemic world. We need them more than they need us”.

Swiss rose

There’s an air of zeitgeist about Le Bijou. Because, just as the coronavirus pandemic sank the traditional hotel business model the Swiss rose to prominence with their digital hotel enterprise.

The Hubner’s business dominated international headlines in the first weeks of the coronavirus outbreak; when Bloomberg, Forbes, The Washington Post and many other major media outlets cooed over the world’s first “luxury quarantine” services and privacy-focused modus operandi.

Royalty, sports stars, blue-chip CEOs and international leaders have all checked-in with Le Bijou. Tech icon and Apple co-founder Steve Wozniak, for example, calls their reinvention of five-star hospitality, “the best hotel experience ever”.

Remote control

A bold new approach to customer service years ago eliminated the need for full-time hotel staff. Thanks to high-tech wizardry and a novel digital butler service nicknamed “James”, the Hubner’s futuristic vision is today paying serious dividends – just as the majority of the industry faces an uncertain future.

Le Bijou was founded and built with privacy in mind but remote management has made overheads minuscule compared to the traditional hotel. There were no staff to furlough when the coronavirus took hold. And unlike in traditional five-star hotels, there are no worries for guests who want to avoid contact with others.

Food and beverage are prepared off-site and delivered in sanitised packaging to the door. But should guests want, a private chef can prepare food in the apartment. Flexibility and privacy traditional hotels can’t compete with. Groceries too can be ordered and delivered without delay. Cutting out the need to visit markets where hygiene can never be guaranteed like it can when ordering through James.

The Hubners deemed the traditional provision of amenities outmoded. Even risky. There’s no busy reception area with staff milling around. You won’t find a restaurant either. Although, thanks to Le Bijou’s convenient locations there’s no shortage of fine dining on offer nearby. So guests can sample the local cuisine or simply ask James to organise a takeout from the chosen restaurant.

Quarantine queen

There are no other guests getting in your way at Le Bijou. No unwelcome knocks on the door from impatient cleaners. Instead, they are off-site but nearby and always on standby should guests want professional cleaning.

Le Bijou units come fitted with self-catering facilities, including fully-fitted kitchens, brimming with remote-operated modern appliances. And then some. Saunas, fireplaces, and gyms are also integrated into the palatial dwellings. So all guests can keep fit and healthy for any length of stay.

And if guests want to lock themselves away they can, because everything is at hand. So there’s absolutely no need for them to depart from their temporary home from home.

The business model has enabled the Hubners to establish a strong leadership position in the hospitality business. Because, for instance, overheads are vastly lower. So, while most hotels had huge financial costs after the coronavirus struck, Le Bijou has no such worries.

Franchise ties

Another Hubner innovation is the unique franchise business model. It has given privileged access to local private investors. And, cleverly, this has not only diversified the pool of investors but also enticed wealthy landlords as well as big corporate customers.

Institutional investors might be a little peeved they have to compete with the capital of local money but with Le Bijou’s value set to soar, that’s hardly a deal-breaker. In fact, as of last year, the firm delivered around 10% returns.

American billionaire and hedge fund manager Ray Dalio said in a recent interview, that only two kinds of companies would succeed in the post-pandemic world: “meat and potatoes” companies and creative companies. In other words, businesses with a simple business model and low debt, and creative companies who can adapt well. Le Bijou could arguably be both, in opinion of David Fishman, Moonshot’s CIO.

Clinical care

Thanks to a hook-up with a Swiss medical practice, all apartments are furnished with a suite of innovative medical care services. So guests can lock themselves away safely but, if they choose, they can also take advantage of in-house COVID-19 test kits. There is even 24-hour medical supervision if required.

The ingenious and rapid response to the new conditions, especially considering how particularly hard the hotel industry was, says a lot about the vision of the owners, but is it really a harbinger of further good things to come

Resilient and profitable hotels in the new economic climate are few and far between. Especially in this post-pandemic landscape, where guest privacy and health is of paramount importance. But the Swiss startups’ flexible and scalable franchise structure seems to promise stability and the prospect of long-term growth.

According to Co-Founder and CEO Alexander Hubner, investors have been excited about an opportunity to shelter cash without the usually paltry returns associated with safe haven deposits:”Most countries are forced to print money to cope with the consequences of the crisis, which means that investors will prefer assets that will not suffer in these new conditions. Given this fact, investors will be eating us alive”.

Family and business

Today, Alexander and his wife and co-founder Madeleine, are not only contending with a surge of investment and company growth. But with a growing family too.

Madeleine is currently pregnant but the Hubners says their expected second child hasn’t added a burden to the management of their business.

In fact, according to Alexander, the couple are only getting stronger as business partners: “Our bond is based on clear communication, which is so vital to our operations and enables us to reach a higher level,” says Hubner, adding: “In the end, it all comes down to a strong relationship and emotional health enables you to release superpowers”.

With the Hubner family and business both expanding there’s also a new innovation in the pipework. The Hubners are developing proprietary software which they are calling Mission Control that would enable the company to onboard other hotels on their service platform, as well as service the franchisees even better.

Its implementation, the Hubners claim, will help them cope with the increasing responsibilities they have. But the software, which will streamline design, marketing and guest services, may equally be a boon for Le Bijou franchise-holders implementing localised business plans.

Contact:

Zurich Financial Advisory
David Fishman
+41 148 880 140
Sihlquai 131, 8005 Zürich, Switzerland

SOURCE: Zurich Financial Advisory

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