Best Western in recent years has expanded from a hotel company with a single brand to one with 18, and those new brands are fueling the company's growth, president and CEO David Kong said this week during Best Western's virtual annual conference.
About "40 percent of the pipeline is new brands," he said Tuesday, adding that those brands were launched to add a contemporary and elevated image to the company as well as to help ramp up scale. "Yet this growth has not been at the expense of our members."
Thirty-five SureStay brand projects are in the pipeline, accounting for nearly 13 percent of the total. Glo and Vib each have 13, for a combined share of nearly 10 percent. Executive Residency follows with 23 projects, for 8 percent. And Aiden with six hotels and Sadie with three account for 3 percent.
Since 2017, SureStay has grown quickly. "We now have 200 SureStays open in North America and 150 in international markets," Kong said. "At the end of the year, we should have over 360 SureStays open globally."
He also noted that the SureStay brand was ranked highest in guest satisfaction in the economy segment in J.D. Power's 2020 North America Hotel Guest Satisfaction Index Study. "That's an incredible achievement," he said.
Still, the traditional brands account for the majority of the pipeline, and the Best Western brand ranked No. 1in BTN's 2020 Hotel Brand Survey.
A Pivot in Corporate Travel Targets
Kong noted that the current environment has "placed a burden on our membership unlike anything we have ever seen," he said, adding that fall business has been compromised because of the weak corporate segments. "There are corporate challenges, and group will not return for a while. We pivoted and now are focused on Walmart, Amazon and traveling nurses, sports teams and project construction business."
Best Western's SVP and chief marketing officer Dorothy Dowling echoed these sentiments when she presented on Wednesday. "There are changes in all segments, particularly business travel, but there is still business to win," she said. "We are focused on the right accounts at the right time to secure the most business. There is an increase for project, disaster and quarantine business," noting that GE, Siemens, Pacific Gas and Electric and BNSF all still are traveling. "We are using third parties to hone strategies and identify companies traveling today to capture that business and shift market share."
In a question-and-answer session after the close of the Wednesday presentations, Best Western VP of worldwide sales Wendy Ferrill addressed a question about moving back to a seasonal rate strategy.
"Right now, I don't know if customers would buy into it," she said. "First, clients are finding lower rates, either in a comp set or at a hotel through promotions. The other piece is that our traditional comp set is now much bigger." Larger hotels that used to not want Best Western's type of business because they were filling up with group or other segments now are selling at a lower rate, she explained, "and lowering their rate by 20 percent is not as painful to them as what we feel at 20 percent. … At the same time, once you step outside of some of those [corporate] programs, it will be hard to get back in. Going into next year, travel will still not be as great as in 2019. Buyers are shrinking their programs and not including as many preferred hotels in their programs right now."
She also noted that hotel owners should access the company's Business Advantage program to help grow their share of corporate travelers from small and midsize businesses. "It's a great program and it's producing well, with prior-year year-over-year business only slightly down, in the single digits."
Best Western senior director of worldwide sales Heather Bailey added that "some larger corporate business has been shifting to smaller midscale business," she said. "We are already going into conversations with customers with that offering."