Airlines design the journey down to the teaspoon, but why do they give up the customer at baggage claim?.
I was in Shanghai recently and walked past a hotel I’ve stayed on a previous stay — The Sukhothai Shanghai — and found myself thinking that it had the wrong name.
The original Sukhothai in Bangkok is one of my favourite hotels. I look forward to travelling to Bangkok partly because I get to stay there again. The service is flawless, the breakfast is excellent, the rooms have aged beautifully and the entire place has a very particular sense of calm. You know where you are.
The water lily pond of the inner courtyard of the Sukhothai Bangkok
A typical bedroom with Thai finishes throughout at the Sukhothai Bangkok
The Shanghai property is beautiful too, although it feels like an entirely different hotel. Its Thai heritage is lightly expressed, if at all. Designed by Neri&Hu, the interiors use natural stone, fine woods, silk and polished brass, creating a restrained and cosmopolitan atmosphere.
The Sukhothai itself says that no two of its hotels are intended to be alike, with each property reflecting its destination. Fair enough. Though it does make you think, ‘well, whats the point of keeping the name then?’
The showstopper staircase of the entrance at the Sukhothai Shanghai
While the colour palette somewhat resembles, the Sukhothai Shanghai is far more modern and sleek.
Rather than any kind of semblance to the Bangkok property, the Shanghai property is more reminiscent of the much admired Cathay Pacific lounge.
Before anyone sends me an ownership chart, HKR International is separate from Swire. The Sukhothai is HKRI’s hotel brand. The Shanghai property sits inside HKRI Taikoo Hui, a 50:50 joint venture between HKRI and Swire Properties. Swire Pacific, separately, is the largest shareholder in both Swire Properties and Cathay Pacific. The connection is adjacent rather than direct, although close enough to explain why the comparison did not feel entirely fanciful. You can see I’ve done my homework.
At some point over the course of the day, I thought: they should simply have called it The Cathay!
The more I considered the idea, the more logical it became.
Airlines are extraordinarily fastidious about designing hospitality in places where nobody is allowed to stay overnight. They have opinions about the weight of the cutlery, the fold of the napkin, the paper beneath the glass, the sequence in which a meal arrives and the exact temperature of the lighting when passengers are expected to sleep.
They design uniforms, music, tableware, menus, amenity kits, lounges and fragrances. They spend years refining a seat, considering the material for its sense of luxury as much as it needs to be spill proof.
Cathay is particularly good at creating a coherent physical world. Working with Studioilse, it developed a lounge design blueprint that has travelled from Hong Kong to Haneda, Bangkok, Shanghai, Vancouver and elsewhere. The materials, lighting and residential atmosphere remain recognisably Cathay, while individual lounges are adjusted to local habits. The Shanghai lounge even has its own Cathay fragrance and a larger dining area because, as one executive explained, Asian passengers tend to spend more time eating.
A selection of images of the Cathay Pacific lounge in Hong Kong
The airline has become sufficiently confident in this world that it now describes itself as a premium travel lifestyle brand. Its website places flights alongside holidays, dining, shopping, wellness, payments and an ecosystem of more than 800 partners. Swire Pacific’s strategy for Cathay explicitly includes developing that lifestyle proposition.
The missing category is the one with beds.
The airline hotel is an abandoned idea
Airlines once understood the connection between flying and sleeping perfectly well.
Pan American World Airways founded InterContinental in 1946. Juan Trippe’s idea was to place reliable international hotels at the end of Pan Am’s routes, particularly in destinations where suitable accommodation was scarce. Air France created Le Méridien in 1972, beginning with a hotel of more than 1,000 rooms in Paris. Swissair and Nestlé established Swissôtel in 1980. Japan Airlines founded its hotel company in 1970, while ANA developed its own hotel business before entering a strategic alliance with IHG in 2006.
Several of the hotel brands survived and prospered long after the airlines relinquished control. Pan Am sold InterContinental in 1981 as it struggled financially. Air France sold its controlling interest in Le Méridien in 1994. Swissôtel was sold to Raffles in 2001, shortly before Swissair collapsed. ANA’s relationship with IHG remains visible through names such as ANA InterContinental and ANA Crowne Plaza, although it feels more like a corporate alliance than a fully realised extension of the airline’s experience.
One of the rare Airline collaborations still in operation - the ANA InterContinental in Japan
The retreat was understandable. Airlines consume enormous amounts of capital and are routinely knocked sideways by recessions, fuel prices, pandemics, wars and political decisions. Hotels require their own expertise, continual refurbishment and patient property investment. As international hotel groups became more sophisticated, airlines could gain many of the advantages through loyalty partnerships without having to own buildings or employ housekeepers.
Yet that explains why airlines stopped owning hotel portfolios. It does not explain why they gave up the brand opportunity altogether. After all, the Marriott group is now building Bulgari hotels. Why not an airline brand next?
Cathay, amusingly, already owns a hotel. The 501-room Headland Hotel at Cathay City belongs to a wholly owned Cathay Pacific subsidiary and is managed by Swire Hotels. It exists primarily to accommodate Cathay employees and operating crew. Cathay has therefore solved the operational question. It simply has not turned the answer towards the customer.
What Japanese railways understood
Japanese railway companies took a much broader view of transport.
They realised that moving people created demand at both ends of the line. Passengers needed somewhere to live, eat, shop, stay and spend their weekends. Private railway groups therefore developed residential neighbourhoods, department stores, supermarkets, leisure facilities and hotels alongside their transport networks.
Hotel Mets owned by JR East in Shibuya
Hankyu helped establish the model by developing communities along its lines and then adding recreational facilities, department stores and hotels at terminal stations. Keio, Tokyu, Seibu and others followed variations of the same logic. These groups continue to operate across transportation, property, retail and hospitality, with the different businesses reinforcing the value of the railway and the areas around it.
The decisive advantage was land. Railway companies owned or controlled property around their stations, and could capture some of the value created when a new line brought people into an area.
Airlines do not own central London because they fly to Heathrow. They do not own Shanghai because they have slots at Pudong. By the time the passenger reaches the city, much of the commercial value has passed to hotel companies, restaurants, retailers and property owners.
Still, airlines possess something valuable: the relationship with the traveller.
They know where the customer is going, when they will arrive, when they plan to leave, how often they travel and, through loyalty programmes, a great deal about their preferences. An airline hotel would not have to rely entirely on somebody searching a booking website and comparing 46 nearly identical rooms.
The modern model could also be asset-light. A property developer would own the building. An experienced hospitality company would operate it. The airline would control the brand, service philosophy, loyalty integration, customer journey, food programme and design language.
For Cathay, much of that capability already exists within the wider Swire world.
What would The Cathay actually be?
The first mistake would be to build a chain of airport hotels.
I am imagining a small number of flagship properties in cities central to the airline’s network and identity. Hong Kong would be the obvious beginning, followed eventually by a handful of destinations such as Shanghai, Tokyo, Bangkok, Singapore or London.
The Cathay Hong Kong would act as a physical expression of the airline and the city it represents. The design would need to go much further than enlarging a lounge and adding showers. A hotel must acquire some of the character of its neighbourhood and give guests a reason to leave the room. Cathay’s lounge blueprint already allows for local variation; a hotel would require considerably more.
Food would provide one of the clearest bridges.
A serious hotel restaurant could develop dishes that later appear in lounges or onboard. Signature airline dishes could be given their proper form on the ground. Chefs could test recipes in a real kitchen before somebody attempted to reproduce them at altitude. The restaurant might become a destination in its own right, giving local customers a relationship with Cathay even when they were not travelling.
In 2025, Cathay Pacific announced a partnership with the famous Mott 32 for catering
The same exchange could work across sleep, lighting, bedding, amenities and wellness. Airlines spend enormous amounts of time trying to make people rest in deeply unfavourable conditions. A hotel would give them somewhere to explore those ideas with space, proper beds and several nights of use.
The operational possibilities are equally interesting.
A guest arriving on a delayed long-haul flight should not have to explain where they have come from. The hotel already knows. Check-in times could respond to actual arrival information. Late departures could trigger sensible late check-outs rather than ritual negotiations at reception. Bags could move between the hotel and airport. Airline check-in could happen in the lobby. When a flight was cancelled, the airline could accommodate passengers within an environment it controlled, rather than issuing vouchers for whichever airport hotel happened to have 200 empty rooms.
Loyalty status would travel more naturally too. Frequent flyers would enter the hotel with an existing relationship rather than becoming strangers at reception. The challenge would be recognising that relationship elegantly, without turning the lobby into another hierarchy of coloured carpets and priority queues. Imagine having access to the hotels gym or executive lounge if you are high status member of the award program.
There is also a cultural opportunity.
Airlines possess extraordinary archives: uniforms, menus, route maps, advertising, photography, tableware, aircraft models and stories from decades of travel. Most of it sits in storage or appears briefly during anniversaries. A hotel could bring some of that history into public life without becoming an aviation theme park.
The airline would gain a showroom accessible to people who have never bought a business-class ticket. Someone might first encounter Cathay through dinner, a weekend stay, an exhibition or a drink at the bar. An aircraft cabin is a spectacularly expensive place to introduce consumers to a brand.
The case against it
The objections are substantial.
Running an airline does not automatically qualify a company to run a hotel. Aviation service is highly scripted, partly because consistency and safety demand it. Hotel hospitality is less predictable. Guests remain for days, make strange requests, change their plans and expect staff to exercise judgement.
The same fastidiousness that produces a beautifully consistent cabin could produce a painfully robotic hotel.
There is also the risk of joining two service failures into one uninterrupted complaint. A delayed flight, lost suitcase and poor hotel check-in could become a single 18-hour argument with the Cathay brand.
A hotel partnership removes the need to own the building, although it does not remove the need for genuine hospitality expertise. The operator would need enough authority to prevent the project becoming an expensive piece of airline merchandising. The hotel must work commercially for local diners, business travellers and leisure guests, including those who have no interest in the airline.
This is why I would start with one property.
The home city would provide the strongest source of meaning and the clearest connection to the airline. If people wanted to stay at The Cathay Hong Kong even when flying with someone else, the idea would have passed its first test.
Expansion could come later, carefully. A small collection of hotels would retain interest and allow each property to reflect its destination. Hundreds of identical Cathay hotels would quickly reduce an intriguing brand extension.
The relationship ends too early
The original airline hotels solved a practical problem. Travellers were flying into cities where reliable international accommodation barely existed.
That shortage has disappeared. The world has plenty of hotels.
The contemporary gap is in the continuity of the experience.
Airlines increasingly describe themselves as curators of travel, culture, dining, design and lifestyle. Their lounges resemble private clubs. Their premium cabins are sold as hotel suites in the sky. Their loyalty programmes have escaped the airport and entered restaurants, retail, finance and wellness.
Then the aircraft lands, the bags arrive and the relationship very abruptly stops until the next flight.
The customer spends the next three nights with another company.
Perhaps airlines were right to sell their hotel real estate. Buildings consume capital and can become millstones. But ownership of property and ownership of an idea are different things. The modern airline hotel does not require the airline to become a developer. It requires the airline to decide that the journey continues after baggage claim.
The Cathay may never exist.
I would book it.
Until then, I will continue staying at The Sukhothai Shanghai, enjoying the breakfast and thinking that it is wearing the wrong name.
An airline that has an opinion about the paper beneath the glass should probably have an opinion about the bed at the other end.
I spend an unreasonable amount of time thinking about where one category should logically become another: why transport brands stop at arrival, how service systems could connect more intelligently, and what makes a brand extension feel inevitable rather than opportunistic.
That is also the work I do at Yuzu Kyodai: helping brands understand culture and consumers, identify credible growth territories and turn those insights into hospitality strategy, service design, innovation and brand experiences.
For work with me and the team on hospitality, travel, service design, brand extensions, consumer insight or market strategy in Japan and East Asia, get in touch with Yuzu Kyodai.
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Cultural Intelligence / Brand Strategy / Art Incubation
