GRAPEVINE, TEXAS—As thousands of Best Western Hotels & Resorts’ members—many soon to perhaps become shareholders in the global organization as it looks to reinvent itself—descend on the Gaylord Texan Resort & Conference Center here for their annual conference, company executives have put a “pair" on their plates with hopes they’ll bite.
Not a well-kept industry secret, during The Lodging Conference in Phoenix last week, Best Western officially debuted its 12th and 13th brands, a couple of boutique conversion offerings known as Sadie and Aiden (surnames Hotel), siblings that are expected to draw even greater attention to the BW family as they take their places in the upscale and upper-midscale segments, respectively.
Geared toward developers who are looking to reposition an existing hotel property or those looking to transform spaces a la adaptive reuse, both brands are billed as cutting edge in terms of design, footprint and the type of market where each has the potential to create neighborhood impact.
“At this point in our cycle, new construction is getting more and more difficult,” said Best Western President and CEO David Kong, citing materials and labor costs, and availability. “It’s really hard to get a new-construction project going, and for Best Western to grow its scale, we really have to focus on conversion opportunities.”
To do that “properly,” Kong indicated the company needed “to tell a good repositioning story…we have to be able to help the asset owner increase average rate, we have to help them increase the occupancy, we have to help them raise the RevPAR. In other words, we have to help the asset owner enhance the value of the asset.”
Kong told Hotel Management Sadie typically would be for primary locations while Aiden would be well suited for secondary locations.
Best Western, once identified by that sole name on a single product, has been adding brands at a relatively rapid pace. For example, last October, it introduced BW Signature Collection by Best Western, positioned between its white-label economy franchise model, SureStay Collection, and its upscale/upper-upscale BW Premier Collection.
While it might seem a “keeping-up-with-the-Joneses” move as competitors add more and more hard, soft and collection categories, Kong said in introducing the design-driven products, the company researched what brands and hotel types are proving successful with consumers as well as owners and developers. “Boutique hotels are gaining a lot of momentum,” he said, noting he questioned why they were so robust. “We found that in many cases, they would move the artificial rate ceiling…because a boutique hotel offers such a unique experience, there are no rate ceilings; people just don’t know how much to pay for that experience,” Kong observed, which is unlike comparing rates among a Best Western Plus, Hampton, Holiday Inn Express, etc. “So, if you remove the rate ceiling, you have the ability to command a rate premium.”
Research also showed boutique properties have broad consumer appeal and would make a good fit for BW’s next brand additions, Kong indicated, particularly for independent owners looking to upgrade. “They’re spending the money anyway [to renovate]. They may as well make it a boutique hotel and offer a different experience, thereby improve the average rate, improve occupancy, drive a better RevPAR and enhance the overall asset value,” he said.
While there will be some signature threads weaving through Sadie and Aiden properties, each will be customized to fit an owner’s vision regarding design. “We want a hotel to capitalize on local flair,” said Kong.
Each of the brands will have a central public area that will incorporate a café or bar, communal seating, a retail display offering brand merchandise and mobile check-in.
There will be no front desk and the barista or bartender will function as the concierge for the hotel: getting keys, giving directions, etc.
According to Amy Hulbert, VP/boutique and upscale brands, warehouses, lofts or a midscale hotel ready for repositioning are the types of structures ripe for the Sadie Hotel and Aiden Hotel models.
Because no two hotels will ostensibly be the same, Hulbert said consumers will be drawn to the veritable uniqueness of each property. “So, you can’t wait for that surprise at the next property,” suggested Hulbert.
Both exteriors and interiors will be eye-catching, she noted. “The signage is theatrical. Very dramatic both day and night. It’s very dimensional and really makes the building stand out and gives it its personality,” she said.
On the inside, the bar/café will be essential to the brand. “It activates the lobby. The food-and-beverage component really adds a layer of activity to the lobby that nothing else really can,” said Hulbert. “It adds a buzz…and provides a huge opportunity for social media engagement. Think about all the things you can post about.”
Kong added Best Western teams, including design and procurement, will support owners as they look to ramp up their properties and also will help the new brands create “a constant buzz” at the property level via social engagement. “We would take our know-how and all the influencers that we work with to create customized templates—playbooks—for these hotels to ramp up the social media buzz,” he said, including orchestrating events and “selfie moments.”
Best Western itself has created a buzz of late with its own conversion plans, filing an SEC Form S-1 in August with the goal of converting from a nonprofit membership organization to a for-profit corporation. According to the filing, the association plans to offer 55 million shares of common stock "following the conversion,” which needs approval of the association’s membership and which was put to a special ballot. If approved—the deadline was Sept. 26; BW did not issue a confirmation at press time—and once the conversion is complete, current members holding outstanding membership interests as of Nov. 30 will have those converted into common stock on Dec. 1.
With that scenario in play, Kong was asked if the newest brands would be franchise opportunities. He replied, “This is still part of Best Western so for now, it would be the membership association model. For now.”