Today's Hotelier - October 2016 - 21
For the hotelier, the advantages of making a conversion are
still significant, Kong said. For instance, many hoteliers are
facing significant upgrade costs demanded by Best Western
and other hotel groups in catch-up repairs and improvements
leftover from the Great Recession.
The hotel industry, in general, cut owners slack on standards
during the economic downturn, but in 2012 decided that it
had to put a stop to any potential slide to protect the brands,
Kong said. Properties were assessed, improvement plans were
developed and owners got their deadlines. Some were facing
greater costs than others, but the average cost for repairs and
upgrades was in the high six figures.
"We had the worst downturn that the industry has seen in
2009, and a lot of hotels were still reeling from that in 2010 and
2011," Kong said. "I think all the brands were taking it easy on
the hotels because we wanted them to recover."
SureStay offers a hotelier who doesn't think the market
can justify the costs of the upgrades, the opportunity to
down-scale to another price point. It is the first time Best
Western has offered a migration route for members to an
economy product.
And SureStay will offer different price points for its own
range of brand options, Kong said.
* SureStay Hotels - economy segment
* SureStay Plus Hotels - lower midscale segment
* SureStay Signature Collection - soft brand in the midscale
segment
Moreover, despite the branding shroud separating SureStay
from Best Western, the new franchisees will still be able to
leverage much of the behind-the-scene marketing and logistics
infrastructure as well as purchase and commission arrangements that Best Western provides.
"There is tremendous synergy," Kong said. "It is a win all
around."
Best Western also expects to be able to offer SureStay owners better fees - royalty, marketing etc. - and more support.
While hotels will still be required to meet strict standards
regarding customer service and unannounced inspections,
they won't be required to meet certain Best Western design
requirements, Kong said.
He noted that this should give SureStay owners a sharp
edge over many of their economy-brand competitors. He said
many economy and lower-midscale brands don't provide the
same support to drive revenue or optimize the return on
investment for their owners as the new-kid-on-the-block will
bring to the table.
"SureStay aims to redefine the game by leveraging Best
Western's proven and award-winning revenue engines," Kong
said. "Scale matters."
To further sweeten the pot, Best Western is offering an
incentive for the first 100 hotels that sign up in the form of no
royalty fees for the first five years during which Best Western
will be trying to grow the chain, Kong said.
"And 100 percent of the money we collect through sales and
marketing will be spent on sales and marketing efforts," he
said. "We don't really intend to make any money for the first
three years. We are interested in building a quality core group
of hotels... we hope these hotels will become our advocates
and our best salespeople in the marketplace."
They expect to roll out 150 SureStay hotels over three years,
beginning December 1, with some coming from existing Best
Western members and recruited from other chains as well
as independents.
While all properties initially will be conversions, Best
Western plans to start a construction program in the economy
model. Eight-hundred hotels in all are expected within a
decade - a number that appears conservative when one looks
at the growth of Best Western Plus over five years.
Of special interest to AAHOA members, Kong noted that
the SureStay model was incorporating AAHOA's 12 points
of fair franchising (www.aahoa.com/home/advocacy/
franchise-relations/points-of-fair-franchising) into the franchise agreement.
For example, SureStay will offer:
* Fair and reasonable early termination provisions.
Specifically, there are "windows" at which a hotel can leave
with minimum consequences if we are not meeting its
expectations regarding revenue delivery.
* Areas of protection that protect the hotel's right to compete.
TODAYSHOTELIER.COM | OCTOBER 2016 | 21
http://www.aahoa.com/home/advocacy/
http://www.TODAYSHOTELIER.COM
Table of Contents for the Digital Edition of Today's Hotelier - October 2016
Letter From the Chairman
Letter From the President & CEO
News Bytes
AAHOA Spotlight
Best Western’s New Frontier
Government Affairs
The Uneven Playing Field: Hotels & Airbnb
Finding Opportunity in the Old
Development & Renovation
Living Legends: Wisdom From Industry Trailblazers
Finance Q&A
The Latest Tech Tools for Hospitality
Guest Experience
AAHOA Events
AAHOA Founding Members
AAHOA Vendor Partners
Classifieds
Advertiser Index
Today's Hotelier - October 2016 - cover1
Today's Hotelier - October 2016 - cover2
Today's Hotelier - October 2016 - 3
Today's Hotelier - October 2016 - 4
Today's Hotelier - October 2016 - 5
Today's Hotelier - October 2016 - 6
Today's Hotelier - October 2016 - 7
Today's Hotelier - October 2016 - Letter From the Chairman
Today's Hotelier - October 2016 - 9
Today's Hotelier - October 2016 - Letter From the President & CEO
Today's Hotelier - October 2016 - 11
Today's Hotelier - October 2016 - News Bytes
Today's Hotelier - October 2016 - 13
Today's Hotelier - October 2016 - AAHOA Spotlight
Today's Hotelier - October 2016 - 15
Today's Hotelier - October 2016 - 16
Today's Hotelier - October 2016 - 17
Today's Hotelier - October 2016 - Best Western’s New Frontier
Today's Hotelier - October 2016 - 19
Today's Hotelier - October 2016 - 20
Today's Hotelier - October 2016 - 21
Today's Hotelier - October 2016 - 22
Today's Hotelier - October 2016 - 23
Today's Hotelier - October 2016 - Government Affairs
Today's Hotelier - October 2016 - 25
Today's Hotelier - October 2016 - 26
Today's Hotelier - October 2016 - 27
Today's Hotelier - October 2016 - 28
Today's Hotelier - October 2016 - 29
Today's Hotelier - October 2016 - The Uneven Playing Field: Hotels & Airbnb
Today's Hotelier - October 2016 - 31
Today's Hotelier - October 2016 - 32
Today's Hotelier - October 2016 - 33
Today's Hotelier - October 2016 - 34
Today's Hotelier - October 2016 - 35
Today's Hotelier - October 2016 - Development & Renovation
Today's Hotelier - October 2016 - 37
Today's Hotelier - October 2016 - 38
Today's Hotelier - October 2016 - 39
Today's Hotelier - October 2016 - 40
Today's Hotelier - October 2016 - 41
Today's Hotelier - October 2016 - Living Legends: Wisdom From Industry Trailblazers
Today's Hotelier - October 2016 - 43
Today's Hotelier - October 2016 - 44
Today's Hotelier - October 2016 - 45
Today's Hotelier - October 2016 - 46
Today's Hotelier - October 2016 - 47
Today's Hotelier - October 2016 - 48
Today's Hotelier - October 2016 - 49
Today's Hotelier - October 2016 - Finance Q&A
Today's Hotelier - October 2016 - 51
Today's Hotelier - October 2016 - 52
Today's Hotelier - October 2016 - 53
Today's Hotelier - October 2016 - The Latest Tech Tools for Hospitality
Today's Hotelier - October 2016 - 55
Today's Hotelier - October 2016 - 56
Today's Hotelier - October 2016 - 57
Today's Hotelier - October 2016 - Guest Experience
Today's Hotelier - October 2016 - 59
Today's Hotelier - October 2016 - 60
Today's Hotelier - October 2016 - 61
Today's Hotelier - October 2016 - AAHOA Events
Today's Hotelier - October 2016 - 63
Today's Hotelier - October 2016 - AAHOA Founding Members
Today's Hotelier - October 2016 - 65
Today's Hotelier - October 2016 - AAHOA Vendor Partners
Today's Hotelier - October 2016 - 67
Today's Hotelier - October 2016 - 68
Today's Hotelier - October 2016 - 69
Today's Hotelier - October 2016 - 70
Today's Hotelier - October 2016 - 71
Today's Hotelier - October 2016 - 72
Today's Hotelier - October 2016 - 73
Today's Hotelier - October 2016 - 74
Today's Hotelier - October 2016 - 75
Today's Hotelier - October 2016 - 76
Today's Hotelier - October 2016 - Classifieds
Today's Hotelier - October 2016 - 78
Today's Hotelier - October 2016 - 79
Today's Hotelier - October 2016 - 80
Today's Hotelier - October 2016 - 81
Today's Hotelier - October 2016 - 82
Today's Hotelier - October 2016 - 83
Today's Hotelier - October 2016 - 84
Today's Hotelier - October 2016 - 85
Today's Hotelier - October 2016 - Advertiser Index
Today's Hotelier - October 2016 - cover3
Today's Hotelier - October 2016 - cover4
Today's Hotelier - October 2016 - outsert1
Today's Hotelier - October 2016 - outsert2
Today's Hotelier - October 2016 - 91
Today's Hotelier - October 2016 - 92
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