PHOENIX, Arizona—A Darwinian marketplace is forcing Best Western International to develop a descriptor strategy so customers understand the midscale brand more clearly and what to expect from it, said David Kong, president and CEO of Best Western.
In remarks to 2,100 operators, owners and associates at its convention in its home city 21 October, Kong said it’s amazing the company can have these discussions about defining the membership organization more precisely. Developing descriptors—definitions of elements of the property, if not the property itself—should eliminate some of the consumer confusion that’s out there.
Kong, who this summer was appointed to a second, five-year term as head of Best Western, said companies that stand still risk sliding backwards. He’s expected to serve through 2014 as chief of the brand, which comprises more than 4,000 properties in 80 countries.
“This is bigger than your property,” Kong said. “This is bigger than any of us individually.”
The membership organization is famously resistant to change. Unlike a franchise, it consists of properties that buy the same services from Best Western but in looks and style share little other than Best Western signage. Efforts to segment Best Western have failed. Only in Europe and Asia is there a Best Western flag: Premier, an upscale version.
While Best Western has helped members stave off the recession blues with economic response planning sessions, imposing a hiring freeze while increasing its advertising and promotion expenditures to US$62 million in 2009, it still has to improve its customer care and Best Western Rewards loyalty program, boost its training efforts, sharpen its focus on electronic distribution, and expand its business traveler customer base, Kong said.
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David Kong
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But the descriptor effort, which Kong said is a marketing communications strategy that won’t lead to segmentation, may be its most important. At a media briefing after the opening session, Kong likened it to the marketing of Johnnie Walker Scotch, which comes in blue, red, green, gold and black labels. Each blend has a different taste, enabling the company to market across the entire Scotch whisky market. Best Western wants to develop that kind of marketing clout, he said. By next 8 November, when Best Western holds its convention in Vancouver, British Columbia, the descriptors should be ready for adoption by membership, Kong said.
Controversy is OK
Two other areas of controversy surfaced during sessions at the cavernous Arizona Convention Center. The first was breakfast, a free Best Western offering of dubious consistency, according to Ron Pohl, Best Western’s vice president of brand management and member services. The second was Best Western’s reliance on third-party, Internet Web sites—specifically Expedia.
While Best Western hasn’t slipped in guest satisfaction, it hasn’t budged either, Pohl said, noting that during the past 10 years, 10 new upper midscale brands have emerged, along with five new midscale brands with food and beverage and 11 without F&B. Meanwhile, 19 economy chains have folded.
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Ron Pohl
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That makes for an extraordinarily competitive midscale market in which Best Western lags Hampton Inn, Courtyard, Fairfield and Holiday Inn Express in customer satisfaction. A key problem: Best Western breakfasts, an area in which only 10 percent of Best Western hotels score equal to chief competitor Hampton, Pohl said.
“Don’t cut corners on breakfast,” he said. “It should be a selling feature, something we stand for, not an opportunity to cut costs.”
Regarding the third-party Web sites, members indicated they’d be willing to join Choice Hotels International in pulling Best Western hotels from Expedia, which Dorothy Dowling called the goliath in the online travel agency space. Best Western’s senior vice president of marketing and sales said Best Western is balking at Expedia’s demand for last room availability, a three-year term with no exit clause, and a 25-percent net rate.
“While I can’t recommend this kind of deal with Expedia, I’d like to …work with the receptive tour operator and other online travel agency partnerships far more aggressively to define our market share,” Dowling said to an applause.
“Are you willing to work with us to represent you with other distribution partners at a 25-percent net rate with more favorable business terms on inventory assignments?” The applause was even louder.
Third-party Web sites likely will preoccupy Kong when he becomes chairman of the American Hotel & Lodging Association during a ceremony in New York 8 November. Kong said he also would focus on defeating card check—the Employee Free Choice Act bill—and on linking AH&LA to such related lobbies as the Asian-American Hotel Owners Association and the Hispanic Hotel Owners Association.
