Chances are if you have travelled you have seen or maybe even stayed at a Hilton hotel.The Hiltons owned the chain of the hotels which was founded by Conrad Hilton and among the books which document the success of the family is The Hiltons – The True Story of an American Dynasty by J Randy Taraborrelli published by Grand Central Publishing, NY, 2014. The book describes the family from the early days in Texas to one of the better from Conrad to Baron and Nicky to their sons to Paris Hilton. The chain was eventually sold and the family runs a large foundation.

While most of the book is about the personal lives of the family, there is an interesting story and lesson concerning Hilton Hotels. As hotels were built by the airports there was a natural inclination to team up with an airline to make the steps of airline booking and hotel reservation seamless. Conrad Hilton decided to team up with TWA on its international side, there were a variety of really good reasons. TWA was one of the biggest airlines in the US that flew many flights outside the US borders. The competition in those days was Pan-Am. The money received from TWA would allow the company to increase its presence in the domestic market. The consequences which were rejected by Conrad Hilton was TWA had competition, lots of it. Once Hilton formally joined with TWA, the other airlines made it harder to book a HIlton hotel on their system. Not everyone that flew TWA stayed at HIlton International, so growth was slowed. In addition, in Japan Hilton had a joint venture with a hotel company which was eventually connected to Japan Airlines or the competition. The joint venture was wound down and Hilton was left with no hotels in Japan and had to rebuild. The worse part of the TWA venture was the airline was at its peak when the Hilton contract was signed, in a few years TWA shares had gone from $60 to under $ 5 or it was not the best partner for Hilton.

Linking to dividend paying stocks, in the eyes of Conrad Hilton linking to an airline made good sense, the consequences of tying Hilton to TWA turned out to be a bad decision for Hilton. Every decision has positive and negative attributes which can be seen looking back, but not so clear looking forward. The lesson to learn is when a company joins another as a partner, it may not control the partner and the reasons why the company was a good partner changes. It is important to have influence on the partner or be able to get out of the partnership if the reasons for the joint venture changes.

There are more questions than answers, till the next time – to raising questions