The incoming president and chief executive officer for Best Western Hotels Group, Lawrence (Larry) M. Cuculic, shares how the pandemic affected his company and what’s next for its 18 hospitality brands. Cuculic was previously senior vice president and general counsel for the company. He begins his new role on Dec. 1.
As he prepares for being at the helm of the international hotel group, he discusses how the company fared during the height of the pandemic and what it has its sights set on for 2022.
What are Best Western’s goals as the industry recovers?
The hospitality industry has endured its greatest crisis in history. Best Western is tremendously proud of how the organization and its hoteliers responded to the pandemic. The company is fortunate to be in the strongest financial position in its history allowing it to leverage this position of strength to increase revenue delivery to hotel owners.
As the industry continues to recover, Best Western is planning to strengthen its loyalty program, work to increase brand revenue and drive development efforts across key markets in North America and across the globe.
How will Best Western strengthen the loyalty program?
Best Western Rewards launched a new Pay with Points program providing greater access to travel regardless of how many points members have in their account. Through this program, consumers who do not have enough points for a free room can discount their room rate by using points. This is especially helpful since Best Western Rewards points never expire.
A recent McKinsey report showed that Best Western’s loyalty program, which spans 18 brands, delivers a higher revenue contribution than those for Wyndham, IHG or Choice, but that increasing enrollment is key. In regards to revenue contribution from the loyalty program, the report shows that Best Western Rewards has the third highest in its competitive set.
During the pandemic, acquiring new loyalty program members became a challenge for hospitality reward programs. As travel rebounds and consumers are traveling, Best Western Rewards is hoping to expand its membership, which currently stands at 47 million members worldwide.
New promotions are helping such as one for this fall that awards a $20 gift card for each night a member stays at a Best Western family hotel in the United States, Canada or the Caribbean (up to five nights) between now and Nov. 22.
What plans do you have for Best Western Plus?
Best Western Plus has always been a preferred brand among both business and leisure travelers. According to that same McKinsey survey, Best Western Plus was underperforming in its competitive set on average rate and revenue per available room (RevPAR). There is potential for the brand to increase the average daily rate, occupancy, and RevPAR. Best Western is focused on attracting more weekday business to make that happen.
As a membership organization, the company has asked hoteliers to consider incorporating enhancements including a variety of potential new amenities, such as specialty coffee machines in the lobby and breakfast areas, in-room Keurig coffee makers, larger televisions in guest rooms with streaming/casting capabilities and enhanced fitness equipment.
How did Covid-19 affect Best Western’s balance sheet?
The balance sheet is stronger than ever thanks to the organization’s quick response implementing an aggressive austerity plan. Best Western was able to provide over $65 million in financial relief to hotel owners over the past 18 months, and the brand is seeing both an increased average daily rate and occupancy due to the pent-up demand. In addition to the austerity plan, Best Western was among the first to roll out enhanced cleaning protocols and operational best practices during the pandemic.
What’s next on the tech side for the brand?
The revamp to BestWestern.com has led to remarkable results. This past summer, the website set several records of performance exceeding 2019’s prior record performance by over $70 million year-to-date.
So far this year, Best Western had over 140 days with sales over $3 million. On 34 of those days, sales were over $4 million. Consumers are relying more and more on the mobile experience, and the brand is working to make digital experiences more user-friendly.
Best Western is also developing the ability to accept additional forms of payment. This includes making gift cards easier to use by enabling them to be redeemed online and the ability to use points to reduce the room rate (Pay With Points).
Where would Best Western like to add more hotels?
The company is focused on putting the right brands in the right markets to meet consumer demand. At the moment, the focus is on growing representation in urban and dense suburban markets where more of Best Western’s brands can expand and see success.
What is Best Western’s view on social media advertising?
When it comes to changing perception and showing guests the “Best Western of today,” social media continues to be an important tool. It allows for special connections with key audiences.
Recent data shows that 23% of travelers will pick a destination based on what they see on social media, and 17% select a specific hotel based on social posts. Best Western highlights each of the 18 brands on BW Travel Zone and on platforms like YouTube, Facebook, Instagram and LinkedIn. The company also works with a network of influencers to introduce Best Western to new audiences and spotlight hotels across their various platforms.