Best Western Hotels & Resorts is betting that Facebook can help deliver it bookings. That is certainly the hope of Best Western CEO David Kong, who said his company is more and more turning to social media as a channel to reach prospective customers looking for travel options. With so many options available, finding the best channels to reach out and market to the public is an increasingly difficult task.
"There are so many channels—from TV to social media—that it is hard to find the one that is most relevant," Kong said during a recent interview at the Americas Lodging Investment Summit (ALIS). "There is just an overwhelming amount of advertising. How do you cut through the clutter? How do you make your message stick?"
Best Western knows that and figures one of the best ways to reach customers is through a channel most are on and one where many spend an inordinate amount of time on: Facebook. The mighty social media company has said that the average amount of time that users spend each day on its Facebook, Instagram and Messenger platforms is 50 minutes. That's a lot of time to snicker at friends' kids pictures, watch oh-so-cute cat videos and get your POTUS fill. Facebook has our collective attention; Best Western wants to leverage that.
"People are connected to it, and it's a place where we can market to people actively looking for hotels," Kong said. "Actively" is the key word. In the olden days, hotel companies engaged credit card companies for their transaction information so they could market to travelers of other comp-set hotels. However, as Kong pointed out, "It's after the fact." What platforms like Facebook do is allow marketers to reach prospective customers before and during the buy process. "Facebook is a channel people use, they have it on, they trust it and we can be timely and relevant when people are looking for hotels," Kong said. "And if you can customize a message to what they are looking for, then you can be more effective in how you market. We can market to these people just in time."
Other tactics Best Western employs includes leveraging user-generated content, which Dorothy Dowling, Best Western's SVP and CMO, calls "far more important than your own curated content."
Best Western also leverages bloggers and YouTube to disseminate its brand message and promise; it also engages a roster of social media "influencers" to spread its word.
And while social media is today's darling, the future is voice and other messenger platforms. "I look at the migration from social onto some messenger platforms," Dowling said. "Not just Facebook messenger, but Kik and WeChat [which is owned by Facebook]. That's the next migration—and bot technology."
Bot technology? But what? An internet bot is a software application that runs automated tasks over the internet. Typically, bots perform tasks that are both simple and structurally repetitive, at a much higher rate than would be possible for a human alone—and usually at a cheaper cost. Summed up: A bot allows you to automatically reach humans and actually has the potential to learn from them. It can perform everyday tasks like securing dining reservations, procuring movie tickets and, yes, making hotel bookings.
Dowling said Best Western is dipping its toes in those waters now.
OTA Love
Best Western's relationship with online travel agencies runs much deeper. Most hotel companies have a love/hate relationship with OTAs, but Best Western is more and more looking at ways to benefit from them.
For instance, Kong points to Marriott's partnership with Expedia, whereby Expedia powers Marriott’s own dynamic packaging platform “Vacations by Marriott” on Marriott.com in the U.S. As Marriott CEO Arne Sorenson said at the time of the deal, "We believe there is considerable untapped opportunity between our two companies to drive value to hotel owners and travelers."
As Kong suggested, it's also about Marriott turning over a portion of its business because it's not part of their core competency. "This is an excellent demonstration," Kong said. "Get help where you are deficient." (Kong added that Best Western is "incubating" something "that will be unique," in partnership with an unnamed OTA.)
It already does have partnership with Expedia in the MICE space. Last November, the two companies signed an agreement to offer Expedia's MeetingMarket software at more than 200 Best Western properties in Germany.
At the same time, Best Western is cultivating ways to best OTAs in the fight for customers. First, by creating scale, "which we are focused on doing," Kong said; two, by offering member-only rates through its loyalty program; and, three, through education—that OTAs don't always offer the lowest rate.
Of course, OTAs, at their breadth, push back, too, with tactics such as dimming or moving hotels down on lists. (It's a practice Expedia has actually said it will be abandoning.)
OTAs do deliver bookings, and in that regard, Kong said OTAs are an acquisition partner. "Our hotels are dependent on them, but it's up to us that when a guest comes through an OTA, we acquire them directly thereafter," he said.
Member rates are, indeed, a game-changer, offering guests discounted rates—10 percent off a hotel's flexible rate—through Best Western's loyalty program, Best Western Rewards, which was recently revamped.
"When we launched them, like other brands, we saw a significant increase in production and in rewards program enrollment," Kong said. "The member-rate strategy has several objectives: move bookings to direct channels and education that OTAs don’t have the lowest rate."
Last month, Best Western tweaked its loyalty program, adding more benefits. It introduced a new digital membership card, giving guests simplified access to their membership number, point balance, current tier level and deals and offers.
On the Brand Front
SureStay, Best Western's white-label franchise model, as of the end of January has received approval for 30 hotels in North America and one in Bangkok, and Kong said he is comfortable stating it will have 100 activated by the end of 2017.
SureStay, which offers three distinctions—SureStay, SureStay Plus and SureStay Signature Collection—is a plug-and-play model, whereby independent hotels or hotels that want to reposition can leverage Best Western's distribution platform without having to take on the more rigorous standards that come with being a hard brand. SureStay doesn't require a PIP but does require a hotel to maintain a TripAdvisor rating of 3.5.
Kong said many of the SureStay deals are involving people buying underperforming assets and repositioning them.
Globally, Kong is ambivalent. While he said Europe business overall is strong, he pointed to a continued lag in France due to the pall cast by recent terrorism. "It has hurt them and it's very slow coming back," he said. According to Best Western's website, there are some 300 Best Western properties in France, many of which are in Paris.
In Asia Pacific, Kong said China is going to continue to struggle, with hotels there not doing well. However, he said it continues to be a compelling inbound and outbound travel market.
In the U.S., Kong said the development pipeline is around 300 hotels, but he did cast worry that some are having trouble coming out of the ground due to higher land and construction costs, interest-rate hikes and banks becoming more selective in financing projects.
For instance, Kong retold the story of Chicago Mayor Rahm Emanuel coming to the groundbreaking of the Chicago Vib hotel and being appalled by the state of bureaucracy that came with getting the project started and kicked into high gear.
In Miami, where Best Western is doing another Vib hotel, Kong said the property is taking longer to build because the "permitting process takes forever."
"We are having to overcome inertia lining up financing" he said. "The longer you wait, the more difficult it becomes." In that respect, Kong said Best Western is working vigilantly and individually with developers.
Airbnb Worry?
Though Airbnb continues to make headlines with its Super Bowl ads and opposition to President Trump's travel policies, it's impact, as Kong suggested, is real on traditional hotels. And it's something that many big brands still aren't confronting head on, Kong said.
"I am floored when I hear big brands say there is no impact. How can people say that?" he said. He pointed to a recent Airdna report that stated that Airbnb is 10 percent to 15 percent of the supply in some major markets and and 8 percent to 12 percent of the demand. "And you wonder why, then, the valuation of the company is $30 billion. Why would sophisticated investors invest in Airbnb if they didn’t expect market share in a big way. You can't dismiss the tremendous threat."
Best Western CEO David Kong will participate in a CEO panel at the International Hotel Investment Forum (IHIF), which will focus on new partnerships, revenue models and customer engagement strategies. IHIF is March 6-8, at the InterContinental Berlin. For more information, visit www.ihif.com.