NASHVILLE—When Terry Bichsel, board chairman for Best Western Hotels & Resorts, began line dancing at the onset of the company's annual convention, it became apparent this was destined to be a different kind of conference. The dance had more to do with the convention's location—Nashville, the music city—than anything related to hospitality, but it also showcased the ease at which Best Western's leadership slips into trying new things. Throughout the day the company’s executives discussed their desire to rise above self satisfaction and to continue reinventing themselves, and you can't do that if you stand still.
"Best Western is doing very well, but we want to be careful not to fall into the trap of complacency," David Kong, CEO of Best Western International, said during his address to the audience. "In a world where everything is evolving so fast... we must use our imagination to compete."
As the conference continued, it became apparent that Kong and his team have an active imagination. At the onset of 2016, Kong said Best Western's goal was to beat Hilton's Hampton brand in revenue per available room, a goal that caused the company to maintain 110 points on its RevPAR index. Best Western's loyalty program, Best Western Rewards, currently contributes nearly 44 percent of rooms revenue across the company's portfolio, bringing in more than $1.7 billion in revenue for North American hotels during 2016. For reference, in 2004 the program was earning just $400 million in revenue, meaning Best Western's loyalty efforts have been kicked into overdrive, as are its efforts to update its existing properties.
"Collectively our members are spending $2 billion in renovations, and the results are spectacular," Kong said. "Not only are we improving the guest experience, we are improving RevPAR and asset value."
Out With the Old
Since Best Western is reluctant to stand still, the company decided in 2014 year to scrap its award-winning website and start over. Greg Adams, chief digital officer for Best Western, said decision to tank the existing BestWestern.com was not an easy one to make, but it stemmed from a desire to optimize the company for the needs of the modern digital era.
"We left behind a site with no content-management system, one needing 8,000 man hours in the spring of 2014 to replace a single page," Adams said. "We replaced it with a site that has enabled us to introduce multiple performance-improving enhancements every two to three weeks since launch."
When asked how Best Western approaches making changes to its operations, Kong told HOTEL MANAGEMENT the strategy lies in mindset.
"There is an inclination not to break what is working, but when you are always looking for ways to improve you will find ways to improve," Kong said.
"For example," Bichsel said, "if we want to improve occupancy we might look at the availability of rooms instead. We have systemwide occupancy of 68 percent in North America, which seems pretty good. But really we have 22 percent available, so we have a lot of work to do."
For the above reason, Kong said Best Western is placing a greater emphasis on improving revenue management in the near future, particularly through the use of artificial intelligence. Ron Pohl, COO at Best Western, said revenue management is the avenue through which artificial intelligence is infiltrating the industry because of its ability to recognize patterns and make informed predictions. While the company is debuting a new chatbot that is capable of interacting with guests and streamlining their requests for advice or assistance, Pohl expects it will be some time until Best Western can find a use for guest-facing A.I.
"Payroll remains the largest expense in the industry, and figuring out a way to free up time there on behalf of our associates is a major consideration," Pohl said. "However, look for A.I. in revenue management before you see it anywhere else."
One Small Step
One of the last things revealed at the conference was the planned development of a new flagship hotel at Best Western’s company headquarters in Phoenix. The new hotel is expected to begin construction in spring of 2018, and will consist of 138 rooms, including innovation rooms representing each of the company’s brands, as well as 7,500 square feet of meeting space, a restaurant, a lounge and a pool.
Elsewhere in development, Best Western added five new BW Premier hotels to its portfolio in 2017, increasing its total number of active properties to 34, with 22 more in the pipeline. Additionally, the company opened 12 new BW Premier Collection hotels, with nine more on the way. Some of those include the Stratosphere Hotel and Casino in Las Vegas and the Aquarius Hotel and Casino in Laughlin, Nev. With just these two hotels, Best Western picked up nearly 4,500 new rooms, and on top of this the company opened its first Glo and Vib hotels, 35 Best Western Plus properties, 15 Best Western hotels and activated its first 28 SureStay-branded properties.
According to Pohl, SureStay is a concept that has changed significantly since it was first unveiled last year. It was conceived as a white-label brand, meaning it would be a separate entity from Best Western and would be used as a vehicle for Best Western to acquire and own economy hotels that did not fit into the company’s other brands. The major distinguishing factor between SureStay and other hotels in Best Western’s portfolio is its ratings requirement; Best Western Plus properties need at least a 4.0 rating across TripAdvisor, Yelp and Google, while Best Western Premier hotels require at least a 4.5. SureStay, however, requires at least a 3.5 rating.
“We want only the best of the segment,” Pohl said. “The hotels must be clean, their guestrooms must have good mattresses and the property must provide high-speed internet.”
Initially, Pohl said SureStay hit a snag because prospective hoteliers didn’t have confidence that a white-label brand disconnected from any larger brand would be able to find success, so Best Western assumed it under the company’s overall umbrella and now offers standard support to SureStay operators.
“We originally targeted 75 deals for the brand in its first year, and we are going to end the year with about 65,” Pohl said. “We want to hit 100 hotels a year, which won’t be any problem from here on out.”
“SureStay is one of the fastest ramp-ups in the industry,” Kong said. “To have almost 30 hotels open in a single year so far and another 30 waiting to be activated validates our initial hypothesis about the concept, that it will be a success.”