HM on Location: BWH throws hat in midscale extended-stay ring

CLEVELAND — The extended-stay segment continues to be the rock star of the lodging industry, so it’s fitting that the BWH Hotel Group introduced a new extended-stay brand during its North American Convention—which was themed BW Rocks and held in the home of rock ‘n’ roll.

Home by BWH occupies the midscale segment and will be “lean” in terms of investment and square footage but still have everything a guest in this segment is looking for in a stay.

Brad LeBlanc, SVP and chief development officer, said the company began looking into how it could grow in the extended-stay segment about 18 months ago. BWH already has Executive Residency in the upper-midscale segment and the four SureStay brands in the economy segment, but “How do we move to the segment that often runs 10 to 15 points—often more—above the [rest of the] hospitality industry?” he said.

“We rethought our prototype and retooled. We went out to developers. I've probably interviewed over four or five dozen active extended-stay owners and they said the same thing," LeBlanc said. "Make it lean. The [return on investment] and square footage are the most important elements of it. Make it simple. Don't require things that we don't need.”

To accomplish that, LeBlanc said the brand will feature a simple breakfast, such as hot sandwiches and coffee. “Extended-stay customers leave at 7:30, 8 in the morning and they’re gone for the day,” he said. “We don’t need a breakfast that gets thrown away when there’s no one there to eat it.”

Items such as meeting rooms and pools are labeled as options, not mandates, so that owners can pick the right mix for each location. In addition, instead of a porte cochere, which are expensive and require additional land, the properties will feature awnings.

The properties will be primarily new builds, but as for conversions, Larry Cuculic, president and CEO of Best Western, said “never say never—but it’s got to be something that’s desirable.”

“If you want me in downtown Nashville, it may take me going into an old building; it may take going into something that would be repurposed,” LeBlanc said.

The target market for a Home property is any proven extended-stay market, according to LeBlanc. “What I don't want to do is pioneer,” he said. “If there's proven extended-stay demand in the market and existing operation in the market, we will go there.”

There’s been immediate interest from owners and developers about building new Home properties, with LeBlanc’s team being inundated with leads, he said.

“I'm looking for any developer that wants to own that midscale segment,” LeBlanc said. “I think today developers are pretty savvy to where the business is and the businesses hot, hot, hot in that midscale segment and that's where we’ll be part of it.”

This is an opportunity for BW owners who want to expand their portfolios but needed another brand to do so successfully, LeBlanc said. “Some of our competitors have up to 1,800 properties,” he said. “Look at us with very few [in this segment]. That's an opportunity for developers to step in. Best Western offers green space, which means lots of opportunity to go out there and not have conflict with another [BW property].”

Best Western is offering key money incentives and deep royalty ramp-ups depending on what they need for their cash flow and their investment thesis, according to LeBlanc.

LeBlanc said the goal is to have 200 Home properties open “fairly quickly,” with the first two already designed.