GRAPEVINE, TEXAS—At Best Western Hotels & Resorts' 2018 North American Convention and Global Conference taking place this week here at the Gaylord Texan Resort & Convention Center, company President and CEO David Kong lauded the addition of new brands, prototypes and an updated loyalty program, noting each will help strengthen the membership association's positioning going into 2019.
“Over the years, we have achieved what many would have considered impossible,” Kong said. “Our founders would be amazed with today’s Best Western. We should all be very proud of the brand we have built together.”
Kong and the rest of the Best Western team had a lot to say at the conference. Here are four key takeaways:
1. Brands, Differentiation and Tide
As HM previously reported, during The Lodging Conference last week in Phoenix, Best Western revealed its 12th and 13th brands, Sadie Hotel and Aiden Hotel. The brands will focus on hotel conversions, and Kong thought it was important to reveal both of them at the same time. This is because the brands will target the upscale and upper-midscale segments, respectively, and as conversion-focused offerings no hotels in either of their lines will be the same.
“These are sister brands,” Kong said. “No two hotels will be alike, and it allows owners and local players to decide what they want. Both brands have the same approach, the only difference is the segmentation.”
Kong said it was important to launch the duo at the same time to ensure they are viewed as sister brands, helping put them in context for prospective developers. Kong justified ongoing brand proliferation in the hotel industry by comparing hotels to similar products such as Tide, which currently offers 56 varieties—a comparison he also made at The Lodging Conference. However, he also was critical of how other hotel companies hoard brands in the same segments.
“I think it’s a problem. If you ask Marriott hotel owners who now have… a number of other hotels in the same segment in the same market, it’s tough,” Kong said. “Now they share the same reservation system. Granted, it’s a big system, but it’s tough. But at the same time you have to look at the overarching objective Marriott had. The Starwood merger was brilliant because they achieved such synergy.”
2. The Speed of Change
Kong succinctly summed up the rate of change in the hotel industry: “What used to be amazing is now either ordinary or obsolete.” Best Western itself started out as a single hotel brand, and today it offers 13 brands.
While scale increases complexity, Kong said it also will afford his organization much greater competitive advantages. Some of these advantages include more favorable online travel agency terms, more attractive loyalty programs and synergies that lead to greater cost efficiency.
When reflecting on what it is like bringing a company from one to 13 brands, Kong said hotel partners initially struggled with the company’s growth.
“They thought there wasn’t going to be much differentiation and we would compete with ourselves,” Kong said. “As time passed they realized that wasn’t going to be the case. We’ve been very careful to grow responsibly.”
3. Loyalty Boom
Rewards programs often are touted as one of the strongest reasons for hoteliers to become affiliated with a brand, and according to Dorothy Dowling, SVP and chief marketing officer at Best Western, Best Western Rewards’ ongoing refresh has paid off: “Calling 2018 a successful year would be an understatement. It was nothing short of record-breaking. Just like the year before that…and the year before that.”
New loyalty services revealed at the conference include the Best Western Rewards chat bot, which can be accessed via Facebook Messenger. The chat bot can be used to review account information, receive special offers and request details about Best Western Rewards’ membership perks.
4. Technology in Focus
For the past few years, Best Western has been an investor in hotel technology such as augmented or virtual reality. Beginning in 2016, it began offering virtual reality training for hotel workers and this year, Best Western SVP and COO Ron Pohl said the program will offer more simulations and options for workers.
On the other hand, Best Western may be dialing back on other technology, such as voice recognition. Greg Adams, SVP and chief digital officer, said the company is investigating how often guests make use of this technology, and noted many guests unplug the devices when they enter a room. Adams said the big mistake hoteliers made when adopting products such as Amazon’s Alexa was that they were trying to market a new device rather than make use of what guests already own.
“Innovating with mobile was such a success for hospitality because travelers already have smartphones,” Adams said. “They may not want to use a device that is not their own. And beyond that, guests’ mobile devices already have voice-recognition software.”
According to Kong, results with Amazon’s Alexa have not stood up to expectations when compared to mobile, but even mobile still has room for improvement. Kong mused struggles to adopt Alexa may be a result of the speed at which the technology was embraced by the hotel industry, and not consumers.
“We tested [Alexa] and we found that at this particular time the traction isn’t there,” Kong said. “That’s not to say it won’t change in the future. When we launched our mobile app we thought it would facilitate more mobile bookings, but we found travelers would research trips on mobile then call in to book. So for a while it actually drove up reservation call volume, which had been declining for years.”