BWI’s extended stay draws developer interest
 
BWI’s extended stay draws developer interest
12 OCTOBER 2012 7:52 AM

Best Western is looking at energy markets in the U.S. as one potential outlet for growth of its extended-stay concept, though the newly announced offering does not yet have any projects in the pipeline.

A prototype drawing of Best Western’s recently announced extended-stay product.

LAS VEGAS—Best Western International’s recently announced extended-stay product has the ears of several developers who are keen on the offering, company executives said Thursday during the membership organization’s annual convention.

Best Western last week announced an extended-stay prototype that could comprise as few as 20 rooms or all of the rooms of the 85-room prototype drawn up by Best Western executives. The 84,000-square-foot structure can be three to four stories tall and would feature kitchenettes that define the extended-stay segment. The rooms themselves would be approximately 300 square feet in size.

Ron Pohl, senior VP of brand management and member services, said while there is developer interest, the product currently has zero properties in its pipeline.

“The product itself is all of a week old,” he told journalists during an approximately 60-minute Q-and-A session that covered a variety of topics.

Ron Pohl
Best Western International

One of the biggest positives the extended-stay product has going for it is that the footprint of the structure allows would-be developers to easily decide how many rooms they want to dedicate to extended stay, Pohl said.

“There’s a lot of flexibility in the design of this, and that’s the beauty of it,” he said.

Key markets
As for regions that could see the product’s development, Pohl mentioned that North American energy markets that are experiencing an influx of workers could be regions that would be a good fit for extended stay. “There’s a lot of demand in (those) secondary markets,” he said.

It also is possible to see global growth of Best Western’s extended-stay hotels, Pohl said.

Pohl said markets where corporate executives are relocated would be good areas for the product type. He added that travelers are more frequently seeking hotels that offer suites.

Best Western’s descriptor program that divvies up properties into three tier levels (Best Western, Plus and Premiere) is an attempt by the company to paint a clearer picture in the consumer’s mind as to the approximate chain scale of each Best Western property.

That said, Best Western’s extended-stay proposal “is not another descriptor,” Pohl told the approximately 2,500 Best Western owners and operators during a general session earlier in the day.

Other takeaways
Global development hot spots, the state of business travel and service standards were among the other topics the executives tackled during the Q-and-A session.

Regarding global development, Best Western is focusing on Asia and the Middle East, said Glenn de Souza, VP of international operations, Asia and Middle East.

In Asia, for instance, countries such as Vietnam, Malaysia, Indonesia and Burma (also known as Myanmar) are ripe for development, de Souza said. Best Western has 207 hotels comprising 31,722 rooms in Asia. There are 81 properties in the development pipeline in the region, executives said.

Development in the Middle East, and Saudi Arabia in particular, is also percolating, de Souza said. The company has four hotels in the region and is building another 20, he added.

“There’s a lot of money in Saudi Arabia being spent on hotels,” he said.

Service standards
There are 193 Best Western hotels in danger of being deflagged if their service scores do not improve, David Kong, president and CEO of Best Western, said.

David Kong
Best Western International

“The hope is we don’t lose any,” he said. Best Western has 4,200 hotels in its global portfolio, nearly half of those in the United States.

He added: “These hotels will have 12 months, and we are confident that they will succeed in (raising their service scores).”

Devang Amin, chairman of the board at Best Western and an owner of three Best Western properties, said maintaining guest service levels is important.

“At the end of the day, one bad apple rots the basket,” he said. “You can’t have a good brand with substandard product. The membership is very, very comfortable with the direction we’re headed upon.”

Business travel
The company is placing a greater emphasis on securing business travelers, said Dorothy Dowling, senior VP of marketing and sales.

Best Western recently added 11 people to a restructured sales staff who brought with them clients the company previously didn’t have access to, she said.

The descriptors also have helped secure business travelers, Dowling said. “Major buyers wanted clarity and that brought about the descriptors,” she said.

Still, Kong noted that business travel demand growth is slowing. “If the pie is this big, and it isn’t going to grow, you have to take more share,” he said.

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