At its 2022 annual convention in Cleveland, BWH Hotel Group took the opportunity to unveil its new brand for the midscale extended-stay segment, HOME by BWH.
“We know that extended-stay is an important market segment, and there is tremendous demand for more options in this category, so we are extremely proud to bring a new product offering to developers and our valued guests,” said Larry Cuculic, president/CEO, BWH Hotel Group. “HOME by BWH is redefining the extended-stay segment with a new approach to the extended-stay experience.”
Brad LeBlanc, SVP/CDO, BWH Hotel Group, said the company began planning for the brand about 18 months ago. “We began to look at the extended-stay segment and said, ‘How do we grow…in that segment that often runs 10 to 15 points—often more—above the hospitality industry,’” he said. “We were missing an opportunity in that midscale segment.”
Former Duke University basketball coach Mike Krzyzewski (right) was a guest speaker at the convention. Early in his career, he coached Larry Cuculic, president/CEO, BWH Hotel Group (left), when he was at Army.
The company collaborated with active extended-stay developers to create a prototype that offers a credible return on investment, LeBlanc noted. “My team and I probably interviewed over five dozen active extended-stay owners, and they said the same thing, ‘Make it lean—the ROI and square footage are the most important elements of it,’” he said. “‘Make it simple—don’t require things that we don’t need.’ It’s a simple breakfast—a hot sandwich and coffee.”
He added that the brand is a “clean, streamlined, modern and fresh approach to extended-stay with the philosophy of options, not mandates.”
For example, the HOME prototype does not require a porte cochere. “That’s an expensive element that requires more land,” said LeBlanc. “[Instead,] it has an awning entrance that can go on the end or on the side. There’s also choice to whether you have a meeting room, bar or pool. In some markets, those items are just not necessary, so why am I required?”
He continued, “Historically, franchise companies get in their big glass houses and say, ‘Let’s design this. This looks pretty nice.’ That’s not the right way. Developers today have more experience than us. Let’s let them decide what’s right for the market.”
Cuculic agreed, adding, “That is a common-sense approach, so that we in Phoenix [the company’s headquarters]don’t decide what it has to have. Brad and his team went out there and did some tremendous research with regard to what it should be. There are not a lot of ins and outs, which cost money. Flat is easier to build and more economical to build… It’s just all these little things that make a difference to a developer. Then, they can have that sufficient return on investment on that product.”
BWH Hotel Group introduced midscale extended-stay brand HOME by BWH at its annual convention in Cleveland.
HOME by BWH is launching with a prototype for new construction, and conversion opportunities will also be available in the future, according to LeBlanc.
The company is looking to start in areas where there is already a proven extended-stay market. “What I don’t want to do is pioneer,” he said. “If there is a proven extended-stay demand in the market and an existing operation in the market, we will go there.”
Looking ahead
In his first conference as president/CEO of the company, Cuculic told attendees that, in the last year, Best Western has been doing “freakin’ awesome.”
He reported positives for many of the company’s existing brands, with Best Western up 25% in RevPAR vs. last year, Best Western Plus up 36.8%, Best Western Premier up 50.7% and SureStay up 29.5%. Canada saw a RevPAR increase of 106.7%
Despite these positives for the year, the company is preparing for what could be a rough road ahead for the overall economy. “We’re all aware of inflation that is going on right now; the geopolitical situation in the world; threats of recession,” he said. “So, we have budgeted in accordance with the forecasts of the industry experts—that is how we have forecasted. It is our fiduciary duty and responsibility to be good stewards of our members’ funds and rely upon industry experts who can prognosticate as to what the future holds.”
But, he said, the company is taking a cautiously optimistic view on what travel will look like in the immediate future, adding, “I do believe that people love to travel and will continue to travel.”
The CEO believes that the company’s strength in the leisure segment will be a plus for it for the near term. “We don’t see that going away,” he said. “People want to travel for family, to broaden their horizons. That will always be there.”
Technology improvements
Cuculic said the company has made technology a focus, with a 2023 budget of $84 million. “We have migrated all of our data into Amazon Web Services (AWS),” he said. “We are creating this data link. Now the question is, ‘How do you use it?’ You can have all the data in the world, but if it is different [silos]and they don’t talk to one another, that is problematic.”
The new technology will help different data areas, from the reservation system to its rewards program and communicate with one another so the company can market better to its guests and provide them with a better experience. “It is all about the data and making sure that we are using it profitably,” said Cuculic. “You can have all the technology tools in the world, but the most important thing is what we know about you so that we can meet your expectations as to where you want to go and when you want to go there.”
While having that data is helpful to help the customer along their journey, it is also important for Best Western to help its hotel operators, especially in making revenue management decisions.
“An initiative we started about 18 months ago was to rebuild out revenue management platform, which will roll out in the third quarter of next year,” said Ron Pohl, president, international operations and president, WorldHotels, who was previously SVP/COO of the company. “It’s being able to have dynamic reporting from a revenue management hotel perspective at the spur of the moment, any time of day. You’ve got the most recent data on your competition, where the rates are, how they moved or adjusted them. As more and more hotels get into forward-looking STR report, to be able to understand how strong the market is on a given day or 90 days into the future. Our system will use that data to create the right strategies and recommendations going forward.”
