In mid-September, David Kong, president and CEO of BWH Hotel Group, announced that he would be retiring at the end of 2021 after 20 years with the company and 17 years as CEO. As the company prepares to host its first in-person conference since 2019 in early October, Kong talked with Hotel Management about his legacy, his future and the opportunities in the hospitality sector.
Inflection Points
Kong prefers to call his accomplishments at Best Western “inflection points” because they indicate transitioning from one stage to another. The first major inflection point of his tenure, he said, is probably the brand’s divestment of 700 hotels from 2005 to 2008. The properties, he explained, did not meet brand standards, and he wanted the company to have “a solid quality foundation.” With those assets removed, he led the company in rebuilding the portfolio and resetting customer expectations. Best Western went from a single brand to three with the addition of the Plus and Premier categories. “And by doing that, we were able to set the guests' expectations,” he said. “If you're staying at a Best Western Plus hotel, you expect a higher level of product experience.” The shift also allowed the company to charge an average rate more commensurate with the enhanced product experience.
The expansion into three brands gave the company a foundation to then launch into boutique and soft brands as well as extended-stay offerings, giving Best Western a footprint in multiple sectors, he said.
Another notable inflection point was the implementation of the AutoClerk property-management system in 2019, which Kong said gave the company a way to “control [its] own destiny in this ever-more complex distribution landscape.” The 2016 SureStay launch expanded Best Western’s presence in three segments and the acquisition of WorldHotels in 2019 brought the company into the upper-upscale and luxury segments. “So now with that acquisition, we are in every chain scale segment from economy all the way up to luxury,” Kong said.
The latest inflection point was the pandemic. “I'm proud of how we handled it,” Kong said, acknowledging that the whole experience has been “very, very difficult.” The company is “prevailing” through the crisis, he said, and has provided more than $65 million in fee rebates to its hoteliers since March 2020. “We helped them survive and now we’re helping them recover," he said. "Our [revenue per available room] index this year is going to be a new high. It's already 123.5. That's the all-time high record for our RevPAR index.”
Kong also sees his own success as an inflection point—not just for Best Western, but for a broader community. “I've had many Asian Americans come up to me and tell me how proud they were,” he recalled. “They basically inspired me to not let them down ... I said to myself, ‘I can never let these wonderful people down. I have to do my best and make them proud.’ And so that's what I did.” All of these inflection points, he said, add up to his legacy in the company. “I’d like to be remembered as the guy that has accomplished all these breakthrough results.”
Ups and Downs
While Kong takes pride in his accomplishments, he also acknowledges some moments that did not turn out the way he hoped.
Many of the company’s major decisions are made through ballot votes by the hoteliers, which helps get things done in a “much more thorough and thoughtful way,” Kong said. “So when we go to roll out something, it's usually very successful because of that thorough, rigorous process we have to go through to get the ballots passed.” One (unnamed) proposed change did not pass, however, and Kong realized that all decisions need to be relevant to the hoteliers. “We tried to paint the big picture, we tried to talk about why it's important in multiple different ways but we didn't explain why it was important to the hotels,” he recalled. “It was supposed to be a simple, no-brainer kind of a ballot, but it failed because we failed to make the business case.”
The experience taught him to be relevant to his audience and to build a business around what they need. Since that one vote, all subsequent ballots have passed, Kong said, except for the member value creation ballot in 2019. The plan would have been “a huge change for the organization,” he said, and it had “tremendous momentum” when the team first proposed it, but the momentum slowed after some setbacks. “We should have done some panel meetings to jumpstart the whole initiative again and refresh people's memory as to why we're doing it,” Kong said two years after the "nay" vote. “We just didn't have the bandwidth to make that case again.”
Related: Best Western's membership votes down for-profit conversion
Moving On
After guiding the company for 17 years, Kong was ready to go out on top. “If you look at all the metrics to measure the company's performance, you have record-high RevPAR index, you have high guest satisfaction and member satisfaction,” he said. More than that, the company’s finances are solid and the reserves are stronger than they were before the pandemic: “[I’m] leaving a company in a very strong financial position.” Much of Best Western’s leadership team has been working with Kong for years, he added, and he feels comfortable leaving the company in their hands.
In the meanwhile, Kong is looking forward to pursuing his personal interests and working on the advisory boards on which he serves. Having worked at KPMG Consulting before coming to Best Western, he expects to take on similar roles (he has heard interest from private equity firms) and remain active in the industry. “I intend to stay productive and relevant and contribute,” he said.
And while Best Western may be doing well, Kong readily acknowledged the challenges facing the overall hotel sector. “We just have to remember that the industry has always prevailed through the worst recessions and depressions,” he said. “We have had a strong, resilient industry, and ... we will eventually prevail.”
Kong, who started out as a dishwasher and busboy before moving up the ladder to the top spot of a global corporation, sees hospitality as an industry of possibilities. As a community, he said, the sector needs to “remake” its image and convey that the industry is “vibrant and exciting and full of opportunities.”