It may come as a surprise to many, but most Swiss hotel schools are the property of private for-profit entities.
Meanwhile, SSTH (Swiss School of Tourism and Hospitality) is one of the very few Swiss hotel schools that is controlled by a not-for-profit foundation.
Indeed, like Ecole hôtelière de Lausanne (EHL), the oldest hospitality management school in the world, SSTH belongs the EHL Group which, in turn, is fully owned by the not-for-profit EHL Foundation.
Furthermore, it can be noted that Ecole hôtelière de Lausanne is part of the Swiss university system as a "Haute École Specialisée" (University of Applied Sciences).
Most schools are in the hands of private equity
Otherwise, most Swiss hotel schools, which cater largely to international students, are in the hands of private equity funds, that typically have a relatively short term investment horizon.
For instance, the Swiss Education Group (SEG) operates five hotel schools in Switzerland is owned by Zug-based Invision Private Equity AG, which has investments in a number of different areas, besides hospitality education, including: healthcare, e-commerce, wellness, medical services, transport & logistics and fire protection.
SEG's five schools are spread over 7 campuses with a total of 6’500 students of 111 different nationalities.
One of the five schools is César Ritz, named after the famous Valasain hotelier, César Ritz, with 3 campuses - located in: Le Bouveret, Lucerne and Brig. SEG's other schools include: the Culinary Arts Academy Switzerland (Le Bouveret & Lucerne); Hotel Institute Montreux; IHTTI School of Hotel Management (Neuchatel) ; the Swiss Hotel Management School Leysin & Caux; and Swiss Education Academy (Le Bouveret, Leysin and Montreux).
Glion and Roches purchased for CHF 248 million
In June 2016, the Paris-based private equity fund, Eurazeo (a former major shareholder of AccorHotels) acquired two Swiss hotel schools, the Glion Institute of Higher Education (Glion) and Les Roches International School of Hotel Management (Les Roches), as well as their interests in affiliated campuses and partners (Glion London, Les Roches Marbella, Les Roches Jin Jiang, the Royal Academy of Culinary Arts in Jordan and Les Roches Chicago).
A total of CHF 248 million was paid to the former owner, Laureate Education Inc., which is known as one of the world’s largest global networks of for-profit higher education institutions.
The company sold Glion and Roches in preparation for its reintroduction into the US stock market in early 2017.
Private equity investors seek high returns
Investors in private equity funds generally have expectations of high returns in a relatively short period of time. A typical holding period for a private equity investment is 5 to 7 years and the targeted annual rate of return is usually in the 20%-25% range.
Eurazeo financed its purchase of Glion and Roches with a debt of CHF 170 million (68.5% of the purchase price) from UK-based ICG (Intermediate Capital Group), a specialist in high-risk private equity financing. Naturally expectations of super-normal returns and a high level of indebtedness put pressure on the management and can ultimately impact the clients of such entities.