Places to Put Them

Good management requires the ability--and willingness--to profit by a rival's example. Thus, after watching Pan American build its subsidiary chain of Inter-Continental Hotels into a highly profitable operation, Trans World Airlines decided to take similar care of its own globetrotting passengers. Last week TWA President Charles C. Tillinghast Jr. and Conrad N. Hilton, chairman and president of Hilton International Co., announced that they had reached a preliminary merger agreement.

Hilton International, since 1964 a separate corporate entity from the domestic chain, operates 34 hotels, plus two Nile-plying cruise ships. The company has reported revenue increases of almost 200% over the past five years, estimates that 1966 income will rise to $122 million. Its hotels are located along a necklace of cities that would start even a stay-at-home packing. Among them: Acapulco, Paris, Athens, Bangkok and Hong Kong, all on present or pending TWA routes.

The proposed merger of the two companies, which will involve a stock swap and the retention of Hilton's name and penthouse-level management, comes at a propitious moment: TWA is negotiating for rights to new, competitive trans-Pacific routes that would include Tokyo and Honolulu, where Hilton hotels are waiting. Additionally, good hotel accommodations are scarce, foreign-financed hotel construction is stagnant, and by 1970, TWA will have a fleet of cavern-cabined Boeing 747 jets hauling hordes of passengers around the globe. "With more people flying and more planes carrying them," said a TWA spokesman, "it's obvious that we need a place to put them when they get where they're going."

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