This global hospitality network’s 19th flag optimizes ROI potential for developers with a fresh product that prioritizes the needs of each individual market.
In recent years, the midscale extended-stay segment has proven a favorite among both hotel guests and developers, but a lack of new product in many markets presented untapped potential just waiting to be cultivated. BWHSM Hotels (BWH) saw the opportunity to leverage that gap as the impetus for a newbuild concept that would answer its customers’ and members’ demand for a differentiated offer.
Launching the @HOME by Best WesternSM brand in October 2022, the company—which now boasts more than 4,300 privately held hotels—"gave members a midscale product to develop and own in the sector that interested developers most,” said Brad LeBlanc, senior vice president and chief development officer, BWH.
This global giant’s 19th brand offers a different price point and more flexible amenities than its Executive Residency by Best Western® and SureStay Studio® brands. It also has the advantage of prioritizing newbuild construction.
“When we enter a market, there’s already a competing extended stay brand there, but most of those products are 20 years old or older. We’re bringing a very fresh offer,” said Le Blanc.
“There’s been a massive transition in the workforce, and we’re tackling that with this product,” he added. “This pool of consumers is growing rapidly as we move to a Generation Z workforce which, today, is an $18 billion business. We didn’t want to create a product that was a landing site for older extended-stay facilities. To build a brand right, we needed to be consistent from location to location. And, to make that identifiable in the consumer’s mind, we had to opt for newbuild. Today’s customer prefers new and fresh.”
Pent-up demand
When BWH unveiled @HOME by Best Western at its 2022 annual convention, this new investment in midscale extended stay underscored the importance of the segment. Often booked by workers who seek a more comfortable temporary home than a standard hotel room, it’s a proven product with built-in appeal.
“The extended-stay segment has been outperforming the industry. It is driving 25% higher revenue than in 2019 and showing no signs of slowing down,” said LeBlanc. So, it’s no surprise that developers wanted entrée into this lucrative segment, nor that BWH felt it was the right time to oblige them.
“Most brand families in the world have a successful extended-stay product. We were not in that segment in any meaningful way before the launch of the brand,” said LeBlanc. “Our guests and members were asking us for a brand to fill that gap.”
The new brand is clearly hitting the right buttons among the hotel developer community. Just nine months since its launch, the flag is generating interest among both existing BWH members as well as developers outside the family who want a new brand to capture extended-stay opportunities in under-served markets or markets where they may already have a portfolio of transient hotel brands.
“We’ve got more than a dozen locations under contract or in development at this point with members who already had a site in mind in their BWH market,” said LeBlanc. “There are also many developers of other brands that are just out of green space. They have nowhere else to develop a certain brand. When you have 1,000 of them around the country, you’re like, ‘Hey, where do I put my next one?’ They’re looking to us to satisfy that brand offer. It’s really that simple.”
Building a better stay
Smart design and flexible amenity policies are just some of the things that broadly make the @HOME by Best Western brand competitive and set it apart in the midscale extended-stay segment. For example, every studio has a kitchen with a full-size refrigerator, dishwasher, cookware, sink and two burners, with a full 9-foot kitchen cabinet area. The bathrooms have also taken guests’ needs into account, including some that are often overlooked.
“If you get into a customer market where there are construction crews, teams working on infrastructure and other guests traveling for jobs that require physical labor, it's likely these workers can be big, strong people. So, we went with a 3-ft. shower versus the standard 2-ft. shower so these guests would be comfortable, not cramped,” said LeBlanc. “We had to give up space somewhere else to keep it efficient, but we thought those small touches would give us a competitive edge. We also thought about how the stay is different. Guests say, ‘I’m here for 14 days. I want to go home to see my family this weekend, but I don’t want to take all my stuff back and forth. So, we developed an amenity locker. Guests can swipe their card and access a large locker where they can store their toolbox, golf clubs, whatever.”
The @HOME by Best Western room designs convey a sense of space with furniture off the floor, ample storage and homelike living and sleeping areas. The idea, LeBlanc explained, was to recreate the comfort and residential feeling of an apartment rather than replicate a typical hotel room.
Listening to developer partners
Like a family making a major decision, BWH created the @HOME by Best Western brand in tandem with its members. At every stage, BWH worked closely with developers on the broad concept and distinctive details of @HOME by Best Western, guided in part by collected feedback and research. These findings were then incorporated into the choice of elements that now define the brand.
“Developers want a product that delivers a strong ROI,” says LeBlanc. “How do you do that? You do that based on labor, design and product offering.”
We didn’t want to create a product that was a landing site for older extended-stay facilities...Today’s customer prefers new and fresh.
Brad LeBlanc
One of the common pain points developers cited was breakfast; they wanted a simple breakfast, provided via a market solution that eliminated the need for labor from that area without sacrificing quality or guest satisfaction. Thus @HOME by Best Western does not offer breakfast, at least in the traditional sense.
“What we do have is an elevated, upscale market area where guests can go into the cooler, pull out a breakfast sandwich or another grab-and-go breakfast offering that comes at a small cost to the hotel,” LeBlanc said.
Developers also sought a more flexible brand format, where amenities and designs could be tailored to the market and site. As a result, pools, meeting rooms and bar service are some examples of amenities that entirely optional for the developer to include.
“Here's what I heard most: Every one of the developers, whether they were inside of BWH or with another brand family, said to me, make things optional. Make it so that we can develop it our way,” LeBlanc said. “We've done all those things to give the developer the streamlined approach to developing in their community in a way that fits it best. They decide what's right for their market.”
This owner-friendly ethos also demanded that the rooms be easy to service – another reason the furniture is off the floor and the bed is elevated. Kitchen areas are clean and simple, set apart from the bathroom with a separate dressing area in double occupancy suites.
“The question we saw guests asking was, ‘How do I live in here for five days? 10 days, 15 days, 30 days? How do I double-occupy with another guest in the room (which is often the case in many of these markets)? How am I sharing that room?’ We've designed it exactly that way, focusing on what our customers want and what they don’t. Not every room needs a blender or a slow cooker. But, for guests who want that, we have an equipment check-out to meet their needs.”
The road ahead
By all indications, the future for @HOME by Best Western appears bright. The brand is already boasting a robust pipeline of future openings, both in the United States and abroad.
In late July, there are @HOME by Best Western projects underway in Amsterdam and Italy, and LeBlanc sees the brand as a natural for international development, since BWH already has members all over the world. “They’re very excited to hear about @HOME by Best Western,” he said, adding that partners have already rolled the brand out to developers, seeing early success. That, plus the wave of interest stateside, is creating a robust pipeline.
“It’s going to really escalate as we head into our convention in September,” said LeBlanc. “We're going to have a pipeline of another two- to three-dozen beyond those we have now, that will be executed deals this year.”
With a nine- to 12-month schedule to get projects open once they’re in the ground, Le Blanc expects the brand to debut in 2024,
LeBlanc also pointed out that BWH is helping its hoteliers and new owners make the numbers work at a time when financing remains tight – from key money to deep royalty incentives. There’s also help for some of the most challenging issues facing investors, such as advice on obtaining entitlements and managing the snags in the international supply chain.
Although the brand is new, LeBlanc emphasized the legacy of the track record behind it. “Today BWH has an extremely strong, robust system,” he said. “We like to call that the tree. We're busy branching out into upscale and we're busy branching out into extended stay right now within our family. And both of those segments are really important to our next 10, 20 and 30 years of success. The great news is that the foundation is solid, but our buyers and our consumers need a different style product for different lifestyles. That's exactly why, ultimately, we're creating brands that deliver on guest expectations, while also ensuring hoteliers will profit from those models.”
Brendan Manley is a writer, editor and digital marketer specializing in hospitality content creation based in Warrensburg, New York.
The views and opinions expressed in this column do not necessarily reflect the opinions of Hotel Investment Today or Northstar Travel Group and its affiliated companies.