PHOENIX—Long adamant in separating itself from the lodging-chain pack by reinforcing its status as a membership, not franchise, organization, Best Western Hotels & Resorts has done a 180—sort of—establishing a white-label franchise model dubbed SureStay Hotels that will operate as a separate subsidiary while connecting franchisees to BW’s distribution channels and infrastructure.
“The economy and lower-midscale segment has always been of great interest to us because that’s where we don’t have any exposure and it’s a huge market,” said David Kong, president/CEO of Best Western Hotels & Resorts. “But we’ve always been hesitant to tap into that segment because we were afraid it might compromise our brand equity and cause harm to the brand. But we came up with the white-label approach idea, copying what a lot of these premium brands do by appealing to a lower price point through a store brand. We felt now we can comfortably get into that space without risking harming our brand in any way.”
The CEO told Hotel Business that Best Western also wanted a “clear distinction” regarding the new brand. “We don’t want the SureStay owners to think they are members of Best Western; therefore, they get to vote on the direction of Best Western. These are two separate hotel companies, two separate consumer-facing brands and SureStay Hotels has nothing to do with Best Western except they get to tap into the back end: The support, the infrastructure, our sales efforts, for example; those are things they benefit from.”
A standout lure for those eyeing SureStay is that there is no property improvement plan (PIP).
“The whole proposition is that SureStay Hotels will differentiate along the lines of superior customer care and not property experience,” said Kong. “And we’re going to rely greatly on TripAdvisor’s rating system to ensure the integrity of that brand. The hotels we would consider have to score at least a 3.5 on TripAdvisor for over a year; otherwise, we won’t accept the application. On top of it, they have to agree to a service promise, which means if anything goes wrong they would fix it or make it right at the hotel. We would also do unannounced inspections at these hotels. We want to make sure the hotel’s clean and provides a great experience but it’s not going to be the latest, greatest, shiny product experience; that’s not what we’re after.”
The company got its first commitment for a SureStay Signature Collection Hotel three weeks after officially launching the chain’s subsidiary in September. The independent, 208-key Genetti Hotel & Suites, approaching 100 years in Williamsport, PA, is being proffered by owner and long-time Best Western member Gus Genetti, who also owns the Best Western Genetti Hotel & Conference Center in Wilkes-Barre, PA.
Kong observed the hotel has a 4.5 rating on TripAdvisor. “It’s perfect. By joining the SureStay Signature Collection—our soft brand—he’s now going to be able to tap into not only all of the resources that Best Western offers, but also benefit from the tremendous commercial terms we’ve negotiated with the OTAs. That’s an immediate benefit.”
“And there hasn’t been a company that’s offered a midscale soft brand,” said Ron Pohl, Best Western’s SVP/brand management. “There are a lot of independent hotels today that don’t have a chance of tying to a brand if they want to maintain any sort of independence. The Signature Collection for SureStay allows those hoteliers to participate with us—and allows us to offer and grow a brand for them.”
Other benefits will include a cloud-based property management system (PMS) and a digital platform featuring Google 360 virtual reality tours and enhanced SEO and SEM support.
SureStay Hotels will have its own website effective Dec. 1. A dedicated SureStay Rewards loyalty program also is being implemented.
Greg Adams, Best Western SVP/chief digital officer, noted the intent with SureStay Hotels is to leverage existing technology, but said, “Where it is appropriate, we have created separation. We won’t be maintaining the data within the same database, but from a connection standpoint.”
“We’re replicating our award-winning infrastructure. So the infrastructure is already built; we’re just making a copy of it for SureStay,” said Kong.
SureStay was developed under the AAHOA Fair Franchising Principles, which will allow owners “fair and reasonable” early termination provisions with no liquidated damages; to have a voice through advisory committees; and do procurement outside brand vendors and suppliers.
According to Shane Platt, managing director of SureStay Hotel Group, the contract is a 15-year term with automatic five- and 10-year windows. “We don’t want people to be stuck if they’re not happy. This is really about putting together a success system that people enjoy. And people like to know if something goes wrong or if they change their minds, then they have options,” said Platt, adding, “Ours are one-way windows. Just the franchisee can take the window. That’s a big differentiator.” There will be some brand standards established across the new hotel group.
“We are doing the showerheads, a topof-bedding program with triple sheeting with a white sheet, and we’re going to have a consistent breakfast,” said Platt. Other items include television size, bandwidth, the bed [none older than seven years]. “But there’s very few of those things,” said Kong. “We want to focus on things that are truly important to today’s traveler and minimize those that are not really that important.”
“We want the properties to be different but we want the experience to be the same. So, you can walk into hotels that look extremely different: very different configurations; they can be interior/exterior corridor but when you walk into the rooms at the hotels, it’s the same quality level,” said Platt. In terms of quality assurance, there is a brand manager for SureStay Hotels.
“His responsibility is to monitor hotels that are coming in and doing quality-assurance reviews, at least initially,” said Platt. “In that Q A process we’re going to look at quality and conditions at the property, look a the TripAdvisor score to make sure they’re maintaining that 3.5 bubble. Then, we’re going to have Medallia look at the breakfasts, the high-speed internet and cleanliness.”
The launch of SureStay Hotels is a global effort and Kong noted there was international interest shown from Asia, Europe and South America during the company’s annual conference held here last month.
The company has filed franchise disclosure documents (FDDs) in all 50 states [at press time, about 40 were approved]and was set to file FDDs in Canada at the end of October.
The CEO expects the brand-building phase largely will be driven via sales efforts, similar to when Best Western launched its descriptor program that included Best Western Plus and Best Western Premier. Kong sees three main growth avenues: First, BW members eschewing renovations/PIPs and who would therefore need to leave the system.
“SureStay gives them a migration path to stay within the family,” said Kong; second, hoteliers who have applied for Best Western membership but were not qualified; and third, industry franchisees in the target segments who are unhappy with their current brands.
Platt said some six weeks ago his team sent emails to members regarding SureStay and got 130 leads. A second email went to AAHOA members and some 60 leads came back.
“We have had an incredible amount of interest because of the affiliation with Best Western. They’ve asked if the franchise is going to emulate the same service-oriented culture and that’s absolutely what we’re trying to do,” said Platt. The executive said his team is finding owners who are questioning whether it makes sense to spend upwards of $500,000 on a PIP and what’s the ROI.
“If you look at the past 10 years, there’s been a number of Best Westerns that said they didn’t think it was worth spending money on the PIP and they chose to go with another franchise.
This is a chance for Best Western to catch those properties and for them to maintain in the Best Western family. They just didn’t have an option to do so in the past,” said Platt.
The first 100 hotels to join SureStay will receive several incentives, including waived royalty fees for five years, a regional manager to kick-start their sales and marketing efforts and hotel-level training support. Additionally, 100% of the marketing and technology fee (5%) will be reinvested to help hotels succeed. Kong added the company was in conversation with “quite a few of our members at convention who want to convert their Best Westerns to SureStay Hotels. There is an incentive right now for membership. They don’t pay any application fees and they get a $5,000 reduction in their joining fees if they convert one of their other owned hotels or a Best Western hotel. Plus, they get a cash incentive [until year’s end]for referring a friend or family member to SureStay.”
“We already have a number of applications in-house. We signed 30 LOIs since we started this. We’re targeting 15-20 signed deals in the next month or two,” said Platt. Ultimately, said Kong, “If SureStay is immensely successful and makes a lot of money, who is going to benefit from it? The members are. They are the owners of this company. So if we get a tremendous revenue stream coming in from SureStay, they are likely going to see their fees reduced in Best Western, because we are not-for-profit. So our members have everything to gain from SureStay.”