PHOENIX—Best Western Hotels & Resorts is all about moving forward. The company’s 70th anniversary brand conference, held here this week, carried the theme “It’s a new dawn,” a concept Terry Porter, chairman of the board of directors for Best Western, summed up with a quote from Abraham Lincoln: “The best way to predict your future is to create it.”
The company is certainly not waiting to predict its future. In his keynote address, Best Western’s President and CEO David Kong had a lot to say about brand image, and made a point to applaud his membership base for consistently voting to impose higher property standards through updates and renovations. He pointed to expired camera manufacturer Kodak as an example of a company that wallowed in complacency; Kodak was the fourth largest brand in the U.S. in 1996, but filed for chapter 11 bankruptcy in 2012 after failing to evolve.
“Kodak’s failure was caused by its leadership,” Kong said. “They did not believe they had to change with the times. We need to remain vigilant despite our successes.”
What, then, is Best Western doing to stay ahead of the times? Aside from the reveal of its new SureStay Hotels franchising model, Best Western is also designing a new website with mobile in mind (despite winning awards for its site five years in a row), is working with Google to provide new virtual reality visual assets for its website and invested in a new revenue management system called Best Rev.
Return on investment
While the SureStay model shies away from enforcing product improvement plans, mainline Best Western properties are still under the gun to keep pace with their upgrades, something Ron Pohl, SVP of brand management at Best Western, brought up in an address to the audience. During his talk, Pohl discussed the oft-neglected exterior renovation, re-enforcing the idea that big investments reap big returns.
“Mediocre improvements have very little return, if any,” Pohl said. “Curb appeal applies both in-person and online. It has a direct correlation with guests choosing your hotel and its perceived value, or what they are willing to pay.”
On the development side, Pohl said Best Western opened 76 hotels so far in 2016, averaging one opening every four days. The Best Western brand was responsible for 22 new properties entering the system, while Best Western Plus added 41 new hotels, Best Western Premier added four and BW Premier Collection added eight. A further 160 new hotels are being added to the company’s pipeline through the end of 2016. Eight of those hotels are part of Best Western’s Vib brand, with a further three in the negotiation stages. Vib started construction recently on three hotels in Chicago, Springfield, Ill., and Staten Island, with the first of them planned for a Fall 2017 opening.
“We have two priorities,” Pohl said of Best Western’s development goals. “First, to grow hotels in primary markets, with an emphasis on new construction; and to develop key brands such as Vib, Premier and Premier Collection. The challenge with Vib is that it just takes longer to pull those deals together, just like any urban-focused developments.”
Is it working? Change it
On the loyalty front, Dorothy Dowling, Best Western’s SVP and chief marketing officer, said Best Western Rewards is forecasting to close 2016 with 28.5 million members—12 percent more than last year—bringing in a total revenue contribution 5.7-percent higher than in 2015 at $1.6 billion. Even here, despite extremely favorable numbers growth, Best Western still plans further changes. The truth is that beneath the increases in membership numbers, Best Western Rewards has fallen from third place in JD Power’s and U.S. News & World Report’s list of top hotel rewards programs, down to fourth for U.S. News and fifth for JD Power.
“While we are making significant progress with Best Western Rewards, we have lost ground to our competitors this year,” Dowling said. In response, Best Western Rewards is getting a total refresh, and the company is going back to the drawing board to re-think the reward portion of the program. Secondly, Best Western wants to fill in some of the gaps in customer experience at Best Western hotels, something Kong spoke on during a later Q&A.
“There are multiple ways to touch a guest during their stay, even without technology,” he said. “Ultimately, what we have versus what the OTAs have is very different. OTAs will use technology to reach guests as best they can, but our advantage is that those people are actually at our hotel. How many times has a housekeeper asked you, as a guest, what you need? Not often, but they leave an impact when they do. Breakfast is a great time to meet with guests and build a relationship, and we need more of that.”
Change of ideas
Online travel agencies would come up again later during the conference, with Dowling offering an opinion of them that is at once both contrarian to those of many of her contemporaries, but also reflective of Best Western’s attempts to remain forward-looking. Dowling now chooses to look at Best Western’s relationship with OTAs as a strategic partnership that runs best when considering first what is important to Best Western, then considering what is best for the OTAs. The goal, moving forward, is to define shared interests, learn from OTAs, use them as an acquisition channel and derive mutual victories from the relationship. All told, nearly 5 million guests came to Best Western properties through OTA channels over the last 12 months, and Best Western managed to exceed its goal of enrolling 5 percent of those guests into its loyalty program.
“OTAs are very good marketers and great marketing partners. At the end of the day, with every partner I have ever worked with we have always shared value, and I never dismiss a partner,” Dowling said. “Sales and marketing people are always looking for ways to drive revenue, and [the OTAs] do it very well.”