One-On-One With CEO David Kong: Best Western Pursues Corporate Marketshare

Best Western president and CEO David Kong last week spoke with Business Travel News hotel editor Michael B. Baker about the hotel chain's drive to reclaim corporate marketshare, plans for expansion in Asia, corporate interest in the midprice tier and the new Best Western hotel prototype launched this month.

BTN: What prompted the new property prototype you've just launched?

David Kong: Many of our current members, as well as developers interested in building a Best Western, have been asking us if we could have a product to compete against the upper end of the midscale market, brands like Courtyard, Hyatt Place, Cambria Suites and the like, so we developed this prototype. It's been in the works for about a year. We want the operators to decide what they need best in the marketplace to compete, so the whole interior design is intended to be very flexible and bring excitement back to the lobby and breakfast area of the hotel.

As you can imagine, in a hotel where there's a breakfast room, it's used primarily for that, and the rest of the time it just sits there, and the lobby is kind of boring. People come back from work, and they just go back to their room or go out. We've been hearing from customers that they want to have a meeting place after work, somewhere to have a drink or just be able to unwind and socialize.

The design and flow of the space as well as the setup of the place is such that there are plenty of places where they can have a drink, grab some coffee or just have a chance to huddle before they go out to dinner, or maybe after dinner they can come back and relax awhile before they go to bed. There's a bar counter that's a part of that design that obviously can be used to serve cocktails or drinks, but also can be used as a sweet shop if someone doesn't want to serve alcohol, or they can use it as a coffee bar. The idea is to have a central point where people can congregate.

There's a media room with a different TV setup, and the breakfast room is totally open, so the space just flows into that area, and the furniture that's used there is not the traditional breakfast room kind of a setup. It's a bit more upscale, more like a lounge.

BTN: But this isn't the launch of a new brand?

Kong: It's important to emphasize that. We're not trying to launch a sub-brand. This is just a prototype people can build. It will still be called a Best Western.

BTN: Where will you focus on expansion?

Kong: China and India are huge focus areas. In China and India, we signed the most licensing agreements in the year. In China, we started out four years ago, and from nothing, we've grown to 36 hotels. All of them are officially rated four- and five-star hotels. Almost all of them are in operation, and some are still under construction and will be ready before the Olympics. In India, we have six hotels right now, but the license we signed with the Cabana Group is resulting in a commitment to spend $1.2 billion over the next 10 years, not only for them to license their own hotels but to build their own hotels. We expect 100 hotels there in 10 years time. In South Korea, we are the largest brand, and we're the largest brand in Thailand. Aside from that, Indonesia, Malaysia, Vietnam, the Philippines and that whole area are all booming. In Indonesia, we're quickly becoming the largest brand. We have over 110 hotels in Asia right now.

BTN: How has Best Western focused on its corporate sales strategy?

Kong:. The first thing we want to do to really go after the corporate world is deliver a consistent experience. As a business traveler myself, I know that I don't want to take any risks. I want to go to the hotel, be assured of the reservation, be assured that my accommodation is going to be up to my expectations and all of that stuff. We have to make sure we provide a consistently good experience, and that's something we're working very hard on.

BTN: To that end, has there been a tightening up of brand standards and their enforcement?

Kong: This year alone, we've separated from double the number of hotels that we have in the past for quality-assurance reasons. We've really stepped up not only on upgrading our standards, but also enforcing those standards.

BTN: Will this continue to be the strategy?

Kong: That's going to continue in a very diligent manner, because we're very intent on winning that business back. Six years ago, we were ranked number two or number three in terms of how the business travelers viewed us, and we've lost that share to the newer brands that have come along, so we are very intent on regaining that. We have a lot of good locations. We have a lot of city-center hotels in a lot of major cities, and we know we have the distribution, so we should be able to win that business back if we can provide that consistent experience.

BTN: How do you cater to the corporate market?

Kong: We visited with a lot of companies, travel managers and travel agencies that make reservations on behalf of corporate travelers, and many tell us they like the diversity, that we have the distribution and also the price points. There's a pretty big range of price points they can put customers in at Best Western.

The other thing they like: A lot of the big companies said they don't want to use any exterior-corridor hotels, but they continue to have demands from business travelers, especially when driving, and they want to feel secure with whatever they are carrying—whether it's what they're using for training, what they're selling, a product launch—they want to know the car is parked right in front of the entrance to their room, so they are asking for exterior-corridor hotels.

BTN: Have you also made changes regarding corporate rate eligibility in your Gold Crown Club loyalty program?

Kong: The corporate rate has always qualified for rewards. It's just the negotiated rates sometimes did not, so we made them all eligible.

BTN: Did you also launch a new business portal?

Kong: We have set up a systematized template approach. Any company that wants to have a customized business-to-business portal can do that very easily with us. Within a very short time, we can have it up and running, because we set up the engine to do that quickly.

BTN: Do you have to be wary of amenity creep, adding amenities just because a competitor is doing it?

Kong: We're not trying to blaze a trail based on what's leading-edge in new product innovation. That's not us. At the same time, we are having our convention right now, and we have over 400 booths, with some people selling flat-screen TVs, and they're doing great business. Now, the brand hasn't set that as a standard, but people are buying these things because they know that for them to compete effectively in the marketplace, they need to have that. We just did polling today, in terms of the flat-screen TVs, and 70 percent of our hotels are implementing that within the next 12 months or already have it implemented.