PHOENIX—With financing tight and the market still very uncertain, Best Western International is seeing a mix of methods in how the global organization will advance in 2009.
According to Mark Williams, Best Western’s vp of North American development, growth this year in terms of hotels already has taken a turn from 2008. Noting new construction accounted for 70% of growth last year for the brand, he told HOTEL BUSINESS®, “Going into ’09, we knew we were going to be about 50% new build. We areagoing to see a lot more conversions. Financing is extremely tough and if you don’t have the equity you’re not going to get it. With an existing property, at least the owner has the equity in the property to get financing to do the renovation required.”
Best Western also expects growth to be enhanced via its Atrea prototype, which is geared for the upper mid-market. The product is designed largely for North America and to compete with Hilton Garden Inn and Courtyard by Marriott.
“It’s given us the opportunity to get into some markets where [Best Western] probably would not have been first choice. It’s more of a business hotel,” said Williams. “Now that we have this product we’re able to compete…and achieve the price points needed.”
The first Atrea is slated to open this year in San Antonio. The 100-room property is one of three being developed by Ajay Patel. At press time, there were signed agreements for 28 Atreas, with eight hotels under construction. Other markets with commitments for Atreas include Georgia, North Carolina, New Jersey and Indiana. Williams noted more than 50% of the developers committing to the Atrea product are new to Best Western.
“It’s what we wanted—to open up some eyes of developers out there that are used to building the Courtyards and Gardens and now the Cambrias. So it got us into that market,” Williams said.
The prototype, which is targeting business travelers, also is helping “mainstream” Best Western, which has member properties ranging from roadside hotels to European castles. “We want to be a little bit more consistent so that the guest gets an idea of what they’re going to get property to property. That being said, we’re never going to be a cookie-cutter chain. We are going to have that opportunity for owners to be unique,” said Williams.
Williams added the company is “still holding hard and fast with our standards as far as new properties coming in.” Globally, the organization remains aggressive in India and China, where seven and 30 hotels, respectively, are slated to open by 2010.
Williams added Best Western’s upper-tier Premier product is doing “extremely well” especially in China and other areas of Asia. “The Chinese properties are just outstanding. They are five-star. The same in Europe,” said Williams.
Williams said Premier is the only type of Best Western open in China and explained, “The mindset of the people in China is for excellence, a higher-end product.”
During its annual convention last October, Best Western’s President and CEO David Kong noted the still-fresh impact from the financial meltdown on Wall Street and across the globe had already caused many Best Western members to see drops in revenues. And Best Western’s director of external communications, Troy Rutman, acknowledged December and January were the “softest months we’ve seen. We’re still outpacing the industry, but we realize we can’t take that for granted and we’re doing things like organizing an economic response plan for members. We’ll be touring the country and we have about 50 meetings scheduled on a market-by-market basis for about 1,000 members to talk about how to maximize yield management, how to brush up on sales skills and customer care.”
The company also has increased its marketing spend by 25% for ‘09, giving it an advertising war chest of $42 million.