Best Western Hotels & Resorts launched its seventh brand last September, but the company isn’t stopping there. Yesterday, the 70-year-old hotel brand introduced SureStay Hotels, a “white label” franchise model. SureStay will operate as a separate subsidiary while plugging owners into Best Western’s infrastructure and distribution channels.
During a media event at Best Western headquarters in Phoenix, President and CEO David Kong explained how the white label approach will allow the company to tap into the tremendous potential presented by the 17,000 branded hotels and 12,000 unbranded hotels in the economy and midscale segments in North America, without compromising its brand equity.
With 4,100 hotels in more than 100 countries, Best Western is not a small company, but Kong sees an opportunity to grow and benefit from economies of scale. SureStay will provide a new revenue stream, which means more funds to pursue sales and marketing strategies and invest in new technologies. “We need to find more money to drive better revenue to our hotels,” he said.
SureStay will consist of three distinctive brands: SureStay Hotel (premium economy), SureStay Plus Hotel (lower midscale), and SureStay Signature Collection (midscale soft brand). The concept grants owners “fair and reasonable” early termination provisions with no liquidated damages, enables them to have a voice through advisory committees, and allows procurement outside of brand channels. All three brands will be marketed under the SureStay Umbrella, with no consumer reference to Best Western Hotels & Resorts.
In the last 10 years, Best Western has separated from 1,200 hotels that did not wish to pursue its design program or could not meet other brand requirements. SureStay opens up a migration path for those owners to remain a part of the Best Western family. According to Kong, nearly 83 percent of those departing Best Western hotels would qualify for SureStay. To qualify, hotels will need to achieve and maintain a TripAdvisor score of 3.5 or higher, and they will need to adhere to the SureStay service promise. There will be no PIP for SureStay Hotels.
“We intend to differentiate not based on the product experience but superior customer care,” Kong explained. “If they are able to achieve a score on TripAdvisor of 3.5 stars, they must be doing a pretty good job. That requirement will police the standard of these hotels.”
The company also plans to recruit people who have submitted applications to join Best Western but are not qualified to do so, as well as unhappy franchisees from other brands. “We want to make sure the hotels we bring in represent the quality brand that we want to build,” Kong said. “The first 100 hotels are really important, because you can use that as a core group to start building your whole brand image.”
Incentives for the first 100 hotels to join include waived royalty fees for five years, a regional manager to kickstart their sales and marketing efforts, and hotel-level training support. In addition, the 5 percent marketing and technology fee will be reinvested in brand and hotel marketing.
Best Western plans to officially launch SureStay Dec. 1, 2016. The company already has 20 letters of intent signed and is actively pursuing about 150 leads. Initial projections put SureStay at 150 hotels within three years and 800 by 2026.