PHOENIX—Best Western Hotels & Resorts is taking a shot down the middle and launching a new soft brand that will look to capture the upper-midscale segment.
In an exclusive interview with Hotel Business, CEO David Kong said the new entry—BW Signature Collection by Best Western—is positioned between its white-label economy franchise model, SureStay Collection, and its upscale/upper-upscale BW Premier Collection, giving it an expanded range of lodging options, not only for consumers, but for hoteliers as well.
There already are two hotels in harness to trot out the soft brand. These include the BW Signature Collection Brooklyn Way Hotel, a former Best Western Plus at 764 Fourth Ave. in the New York City borough, and the BW Signature Collection Killington Mountain Lodge at 2617 Killington Rd. in Vermont’s ski destination city.
A third property in the Pacific Northwest also is expected to join the brand, but at press time, the ink wasn’t dry on the agreement.
“All the major players have a need to grow scale and we see this as an opportunity to increase our number of hotels, locations and price points that we already offer. We also looked at the [lodging]universe and there are about 20,000 hotels in the upper-middle segment, and of the 20,000, 20% is unbranded, independent hotels, so…that’s a pretty good universe, and if we can get 100, 200 hotels out of that segment, that would be great. And, it greatly helps round out our portfolio,” Kong told Hotel Business.
Similar observations regarding the economy and lower-midscale segment gave rise last year to BW’s SureStay Collection, which has been gaining traction with 25 properties activated and some 40 applications approved.
Kong indicated there are several factors—beyond competition and peer pressure—that has the member association taking this direction.
“Because we have one-year contracts, our hotels can leave at any time. I look at why hotels are leaving and some of them say they just want to go independent. So we thought: ‘Hmm. If you go independent, you don’t have to abide by brand standards, you have a lot of flexibility and freedom, you don’t have to put up a sign, which is expensive, etc. So there are a lot of benefits in being independent today as long as you can make it with OTAs,” said Kong.
But, the CEO stressed, “If you’re an independent hotel, the thing that you need is an alternate source of business because you only generate so much business yourself as one hotel, and the OTAs, you don’t want to be too reliant on them. Plus, the OTA business is expensive because of commissions.”
Under the new soft brand’s distribution agreement model, those hoteliers looking to be independent would benefit from Best Western’s reservations system, loyalty program and a new customer base to tap into. Kong termed it a “win-win combination. Both sides would win. It’s why we think it’s a wise thing to do and in this particular case—the upper-midscale segment—there’s really no soft brand competing in this segment,” he averred. “That makes it even more attractive for us.”
The soft brand’s “starter” hotels came to the new venture in different ways.
For example, the independent 103-key Killington Mountain Lodge, which features a massive stone fireplace and scenic views, had applied to be part of the Best Western Premier Collection. “But the quality level wasn’t quite there at that Premier level,” said Kong, noting the organization gets numerous inquiries to join that group. With the creation of the BW Signature Collection, such properties would now have the potential to be associated with or remain with Best Western.
The Brooklyn property, formerly the Best Western Plus Prospect Park and currently listed (at press time) as a BW Premier on its website, was “happenstance,” said Kong. “The developer was talking to the hotel and mentioned to them they have this option, and they immediately jumped on it.”
There are not many requirements to be activated to the BW Signature Collection by Best Western, noted the CEO. Among the qualifications, hotels need a score over four on TripAdvisor [it’s 3.5 for SureStay and 4.5 for Premier], offer breakfast, and have a product experience equivalent to a Best Western Plus. Other requirements include unannounced inspections and a satisfaction guarantee.
As for markets, Kong sees a range of opportunities in North America, but not necessarily where any of its 800 Best Western Plus hotels are located. “We’re not going to compete against ourselves,” said the CEO. “We don’t want to create undue impact for our Best Western Plus hotels.”
The executive said the new soft brand also will be an option for its international members.
“This becomes a migration path for hotels that might consider leaving,” said Kong, indicating owners considering leaving other brands to go independent now have this Best Western option to consider when they jump.