Best Western Virtual Conference: Day One Wrap-Up
By Danielle Schalk
PHOENIX — Best Western Hotels & Resorts (BWHR) launched its first-ever virtual conference on October 27, with the theme ‘Because We Care.’
The virtual four-day event featured a selection of on-demand content, a virtual trade show semi-live breakout and mini sessions and daily general sessions featuring BWHR executives, board members and industry experts.
Peter Kwong, board chairman, BWHR, opened Tuesday’s general session. In his presentation, he offered a message of hope for the future of the company. “What makes Best Western special is that we’ve always been a family first and a brand second. For nearly 75 years, our hotels have been about people and connections,” said Kwong. “Although we are far from a full recovery, we have walked through the worst part of the storm and we are still standing. If there’s one thing I’m certain of it’s that we will overcome. We are strong and relentless. We are family.”
Kwong wrapped up his presentation by announcing this year’s winner of the Chairman Legacy Award, Dinu Patel. “Each year a chairman Legacy Award is given to the individual who best represents our membership and organizational ideals,” said Kwong. “I’ve had the privilege of knowing Dino for more than 30 years. He is a Best Western governor, brand leader and, most importantly, a friend…For 45 years, service and resilience have been the hallmark of Dinu’s life. We honour him with the chairman’s Legacy Award. Not simply for his immeasurable contributions to Best Western but because he exemplifies the heart and values that we look for a role model.
The chairman’s presentation was followed by a Board of Directors Panel Discussion moderated by industry expert Glenn Hausmann. The panel highlighted actions taken by the board through the pandemic and the challenges it continues to address as the situation evolves.
Terry Bichsel, director – District II, noted that as things evolve in these uncertain times “when those signs of improvement show their faces you’ve got to be able to react quickly. And that’s who we are. We’re not a big top-heavy corporation, we’re nimble.”
Ishwar Naran, director – District IV, also pointed to Best Western’s membership model as a key advantage during the crisis, pointing to the measures put in place to support members. “Membership really cares…and I think that’s going to makes us stronger as a company.”
Panelists also highlighted the key challenges faced by hotels in hot-spot cities and the impact of boarder closures and travel restrictions.
To round out the session, the directors offered recommendations to members as they forge forward. Among these were to remain positive and be proactive and seeking new markets and revenue opportunities. They also pointed out, by providing a great experience now, members have the opportunity to build customers for life. “We all know that there’s a limited amount of customer base that’s out there right now, so now more than ever, hold tight to that customer, make sure that they have an incredible experience at your property,” said Tony Klok, director – District III. “Right now, you have the opportunity to play your A game, and make new customers for life.”
Following the panel, BWHR’s president & CEO, David Kong, issued his welcome remarks, during which he highlighted the importance of brands using their marketing to connect with customers on an emotional level, pointing to the success of Apple and Harley Davidson on this front. “It’s been said, when you turn on the lights all rooms look the same. The product experience is really not a big differentiator,” he said. “So, how can Best Western stand apart in this crowded space? Our mission to lead the industry in superior customer care is more than a corporate slogan, it’s who we are. Being kind and caring has always been in our DNA [and] Because We Care should be the starting point of everything we do. In this COVID-19 environment, this purpose is even more important.”
Kong went on to highlight the company’s performance through the past year, noting that BWHR entered 2020 with its strongest balance sheet ever, which placed it in a strong position to weather the current crisis. The company continues to have a strong pipeline, with its new brands, including its Surestay brands, comprising about 40 per cent of the pipeline.
He went onto speak to the company’s recovery plans, which include a focus on “getting heads in beds,” adapting to the new normal and streamlining expenses; helping members get through the off season; and providing comfort and reassurance to travellers.
He also highlighted measures that will be put in place to provide a new round of relief to Best Western members. These include extending the time period for account delinquency, reducing monthly fees by the decrease in a property’s revenue and rebating the 0.33-per-cent Marketing and Technology assessment increase going into effect on December 1, among others.
“It is undeniable that the past few months have brought unprecedented hardships for our members. The personal and business toll has been immeasurable. We had to part with long-time, valued team members and those who remain are worried for their jobs, health and futures. You fear for the survival of your business, into which you have poured your life savings and worked tirelessly to build. On top of these stresses, many of you have been worried about loved ones becoming sick or becoming sick yourself,” said Kong. “At times like this, it’s natural to feel helpless. It’s easy to feel overwhelmed. But what has kept us going is our refusal to be defined by our hardships.”
Larry Cuculic, SVP and general council, provided attendees with a legal update from the company including advice on COVID-19 liability and whether or not to require staff to get vaccinated when COVID-19 vaccines become available. He also provided updates on requirements for human trafficking training, carbon monoxide safety and ADA accessibility.
The afternoon also featured the Global Leadership Panel Discussion, comprised of a series of interviews with Best Western’s international leadership, offering a global perspective on the challenges created by the pandemic. Speakers included Suzi Yoder, SVP International Operations, BWHR; Carmen Duecker, CEO, BWHR Central Europe; Rob Paterson, CEO, BWHR Great Britain; Oliver Cohn, CEO, BWHR France; Giovanna Manzi, CEO, BWHR Italy; William Dong, president & CEO, BWHR China; Olivier Berrivin, managing director, International Operations/Asia.
Best Western Conference Examines Impact of COVID-19 at its Virtual Annual Conference
By Rosanna Caira
PHOENIX, Ariz. ─ As COVID-19 continues to make headlines around the world, hoteliers continue to be impacted by its wrath. Not surprisingly, the pandemic was the centre of much discussion at the recent Best Western annual conference, held virtually last week, from October 27 to 30th.
At the October 28th afternoon Industry Leaders’ Panel, moderated by Glen Hausmann, a trio of leaders including Roger Dow, president & CEO of U.S. Travel Association; Chip Rogers, president and CEO of the American Hotel & Lodging Association; and Cecil Staton, president and CEO of the Asian American Hotel Owners Association, AAHOA, spoke about the impacts of the pandemic as well as the necessity of support to move the industry forward.
While the U.S. industry is appreciative of the help it received in the early days of the pandemic, through the CARES package, it clearly hasn’t been enough to stem the tide. As Rogers said in kicking off the panel. “The industry is hurting in a significant way. We already see hoteliers going out of business, losing their lives’ work while Congress is worried more about going out on the campaign trail to protect their own jobs than the millions of jobs of people they represent.” Though Rogers says Congress responded quickly at the onset of the pandemic, he also stressed that in creating the CARES package, they were creating the kind of solution intended to last eight to 10 weeks. “Well here we are, six months into it…and the problem still exists… We really need our leaders to come together and stop with the political nonsense. There are millions of people whose jobs depend on this; they’ve got to get something done,” stressed Rogers, adding he’s only 50-per-cent convinced Congress will get something done, but he adds, “hopefully they’re headed in the right direction.”
From the travel-industry perspective, Dow agreed with Rogers, saying Congress needs to do more. He’s been part of a coalition of 250 organizations urging COVID Relief Now. “It’s a shame they cannot look at the livelihood of these people. They’re back at the table and hopefully something gets done because it’s critical. We cannot let this go on.”
AAHOA’s Stanton agreed. “Many of them are beginning to understand the seriousness of the problem, particularly for our industry, but the problem is we’re caught up in election politics. It’s very hard to get the sides together to do anything that would be in the interest of small business in the country because of electioneering and pandering and politics and other things that get in the way.”
Stanton stressed that of AAHOA’s 20,000 members, most are small businesspeople that may own one, two or three hotels. Stanton said “so many have the potential to lose their business. It is about loss of income, and it is about the potential to lose their businesses. I’ve regularly started talking recently about a moral imperative here because I do believe there’s some people out there who are saying the capital markets will take care of this, leave it alone and someone will come along and buy these hotels and within a year or two they’re back to normal. But that doesn’t get to the heart of this issue — that this happened through no fault of their own,” said Stanton. “They didn’t make bad business decisions…The government shut down the economy and shut down travel and they’re having to deal with the repercussions of this. Congress needs to get back to work, put the politics aside and let’s do something that will help small businesses make it through COVID-19. To do otherwise, [you] risk the possibility of the main streets of our country being littered with carcasses of failed small businesses.”
In an one-on-one interview following the panel, Hausmann spoke with Susie Grynol, president of the Hotel Association of Canada, for her perspective on how the pandemic has impacted Canadian hotels. Grynol said COVID-19 has sparked a roller coaster activity of hotel occupancy with rates hovering around 30 per cent. Grynol said much of that has been fuelled by a more conservative government approach in Canada as well as Canadians being more rule-abiding in following government mandates with regard to safety.
While travel isn’t expected to increase any time soon, Grynol said the Canadian government has been quite supportive and generous, pointing to the wage subsidy, which recently got extended to June 2020. However, she said banks haven’t been as supportive on the loan front. “Banks have basically said you’re too risky…so we’re not going to lend to you; we’re going to give you six-month mortgage deferral… and now it’s time to pay the piper,” said Grynol, adding the association is currently working on a special loan program just for hotels and hoping to see an announcement on that in the next couple of weeks.
Asked how many hotels have closed, Grynol said, “We’ve seen permanent closures but our goal as the advocates for the industry is to prevent as many shutdowns as possible,” adding the projections say 60 per cent of units will be out of business in the next six months; 40 per cent are behind on their mortgages, which is unheard of; 25 per cent are behind on their property taxes; and 60 per cent have said they’re on life support, if further changes aren’t coming.
While remaining open is key to survival, Grynol stressed that among her membership, “there is deep concern for employees,” citing that 80 per cent of hotel employees were laid off in the early days and while some were called back, 40 per cent have been lost permanently. “Mass terminations will continue to happen,” said Grynol, adding a lot of damage has been done, and “how you get all those workers back keeps me up at night.”
Rounding out the second day was an Industry Experts’ Panel, which provided the statistics and the context of the pandemic on the industry. Amanda Hite, president of STR, kicked off the panel by stating that recently hotel occupancy hit 50 per cent for only the second time since COVID-19 hit. “It sends the signal that leisure demand will extend a little farther into fall this year.”
According to Jamie Lane, senior director of Economics Forecasting with CBRE, occupancy has been bouncing around the 47 to 50-per-cent mark with steady gains over the weekends. Leisure has been somewhat more stable, but when it comes to rate, “there’s been weaknesses in the past few weeks.”
According to Adam Sacks, president of Tourism Economics with Oxford Economics, “At the national level, beneath that headline of 50-per-cent occupancy, there’s been incredible disparity across the country. The urban markets are underperforming. In contrast, resorts with beaches, mountain areas have done relatively well.” Sacks also stressed that “Canada, in contrast, has under-performed, with travel restrictions across provinces as there is more conservatism about travel.” Hite concurred that resorts markets — the ones associated with beaches, mountains and open spaces — are markets that will continue to see demand.
Given that the market doesn’t expect marked improvements until mid-2021, Hausmann asked the panel how can hoteliers survive until then. According to Lane, “We will see tough times until then while we are waiting for a vaccine. There’s a lot of risk aversion out there,” said Lane, adding that he sees recovery by the end of 2021-22.” According to Sacks, “There is a lot of pent-up demand and we think people will more eager and grateful to travel.” On the numbers side, Hite says STR expects to end the year on 52-per-cent occupancy and the industry will see 80 per cent of 2019 demand next year. But it will be the back half of next year that the industry will see pick up,” he says.
Given that winter is fast approaching, we need to prepare for the worst and hope for the best, said Lane. “The upside is a vaccine late next year and 2021 will be a recovery year.”
While the pandemic has decimated much of the industry, Hite says there are still 217,000 rooms under construction – 75 per cent of which are in limited service. A total of 13,000 rooms are under construction in luxury, she added, which is a segment she believes will be worth watching over the next few years.
As Sacks said, “We are in the fog of war and we need to take lessons from history. Every single time hotels have been knocked on their banks, the industry has recovered.” People will want to continue to take vacations and visit beautiful places, said Sacks — “the second half holds the potential to look a lot like normal and ‘22 should be good,” he offered. Lane offered delegates some practical advice. “This is a re-set opportunity for yourself and your property. Think about how to spend your money efficiently and…to operate your property in a more efficient way.” Hite closed off the panel by offering parting advice: “The travel and hotel industry is resilient and I’m confident in the recovery – that it will come… The next three to six months will not be easy… but as long as you’ve got the good business model, we get some support from the advocacy that’s happening with our government, there is opportunity to support the owners to get through what is really a cash-flow crunch. On the other side, business will come back and return to normal and I’m confident in our ability to grow into the future.”