Best Western Hotels has plans to "transform as a global
brand" by increasing its footprint outside the U.S. and capitalizing on
"fast growth" in Asia Pacific, Best
Western executives said during the company’s 2023 annual convention in
Honolulu.
BWH is "well positioned" for an "intentional"
international expansion to stay competitive, BWH Hotel Group president of
international operations Ron Pohl said,
detailing the company's property gaps in the global market.
"North America has a population of 370 million people and we
have approximately 2,500 [North American] hotels. The rest of the world has 7.6
billion people and we've got about 1,600 [international] hotels," Pohl
said, highlighting the immense growth opportunity for Best Western internationally.
Riding the Recession-Free Momentum
Thanks to a strong year and cautious planning, Best Western's
brands are poised to make the most of the moment.
"We created a budget based on what
experts were telling us could occur," Best Western CEO Larry Cuculic said,
which included a hard recession in late spring or early summer. “It didn’t
occur,” he continued and, for Best Western Hotels, nearly the opposite occurred,
with a solid influx of guests over the summer months. International demand has
been "terrific" for Best Western. "Outbound U.S. and North
America into Europe has been phenomenal," he added.
"We stayed on budget,
nonetheless, and rode the momentum associated with a great spring and a great
summer," a decision that Cuculic said put BWH in the "best financial
position [it] has ever been in."
One new strategy for the company—especially in international
markets—is focused on WorldHotels, which BWH acquired in 2019 and whose
strategic growth was delayed by the pandemic. "We need it to be a little
bit more competitive," Pohl said.
WorldHotels previously competed as a distribution channel for
hotels, Pohl said. Now, Best Western plans to evolve the brand into the soft
brand the company has been working toward. So far, that has included a new
website, yet to launch, and new brand logo.
Looking ahead, however, Pohl foresees "potential for
WorldHotels [to be] a 400- to 500-hotel brand, in not a long time" and
that it will focus on international markets.
In the Pipeline
Best Western has 232 in its international pipelien and 37 for WorldHotels,
with a number of Asia-Pacific regions high on the company’s priority list.
"APAC remains our fastest growing market," Pohl said,
and "growth in India is top of mind." Currently, Best Western has 50
hotels either open in the region or in the pipeline, Pohl said, including the
first Aiden hotel in Goa—a brand portfolio that Best Western plans to double
globally by the end of 2023.
India’s “huge population” but “limited number of [hotel] properties”
in the midscale tier represents the largest opportunity, Pohl said, especially considering
India’s expanding middle class.
BWH’s emphasis on India echoes similar regional interest by Accor
Group chairman and CEO Sébastien Bazin. In July, Bazin
called himself a "big advocate of India" and highlighted the region's
emerging middle class and high expectations around its impending outbound travel.
Best Western remains more focused on
accommodating travelers venturing to and within India. The company also has a vested
interest in the region given its franchisee demographic. "Our membership
is 60 [to] 65 percent Indian ownership… so it's of great interest to them to
see us grow in their native country," Pohl said, but it’s not without some
challenges.
"The challenge with India is the
financing side of things,” Pohl said, but other APAC markets have shown a lot
of appetite for hotel development. He said, "money is not an object,"
in many parts of the region.
That seems to be the case for Vietnam,
another target for BWH, where there was so much hotel investing and planning that
the government placed controls on activities until certain projects were
realized. Some of those controls have now been lifted, giving BWH’s pipeline some
renewed energy. BHW foresees a strong future in Vietnam’s ‘growing cities” that
already attract corporate and leisure travelers—and a blend of the two.
China, on the other hand, remains
"challenging," Pohl said. "China is in a tough economical time
right now, as a country, as a government, as a people. … Everybody is holding
onto their money to see what is going to happen next," Pohl said.
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BTN accepted subsidized transportation and
lodging to attend BWH's 2023 conference. Reporting from that event was not
promised to Best Western, nor was coverage influenced by this support.