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HTM 581

Best Western Overview

• The world’s largest hotel company operating under the single brand

• Headquarter is located in Phoenix, AZ

• Best Western not offer franchises just operated as a nonprofit membership association

Best Western Overview

• Hotels are allowed to keep their own independent name as part of their identity

• AAA rates 74% of Best Western in North America 2 or 3-diamond ratings, 80% in Europe received 3 or 4-star ratings

• Reservation centers in Phoenix and Glendale, Arizona; Milan, Italy; Manila, Philippines; and York, England

General History• Founded in 1946• Initiated the "referral system”• 1960: Requirements for Best Western

membership in order to be the "best" or "as good as the best" property

• 1962: Reservation service covering the entire United States and Canada

• 1963: The largest chain in the industry with 699 member hotels and 35,201 rooms

General History• 1964: The group of motels east of the

Mississippi River was incorporated as Best Eastern, Inc.

• 1964: Canadian hotel owners joined the system, the first step toward global expansion

• 1966: Best Western and Best Eastern, joined under the Best Western name

• 1974: Eliminated the word "motel" from its name and began competing directly with other full-service lodging chains

General History• 1976: Entered Mexico, Australia and New Zealand,

further establishing its international presence• 1977: The phrase of "world's largest lodging

chain" became a part of Best Western's corporate identification and advertising theme

• 1981: Known as the world's largest chain of independently owned hotels

• 1995: Launched the most extensive and complete listing of properties online making it the largest hotel brand represented on the global computer network

General History

• 2002: Implemented BestRequests

• At Present: Provides high standards and value while allowing each property its individuality and personality

• At the end of the 2nd quarter in May 2005, it had 2,400 hotels in North America.135 new hotels in North America and 163 hotels internationally, totaling 298 new hotels in 2004

Corporate Programs

Regional Guestroom Packages

BestRequests

• The name of a select group of Best Western hotels that offer a higher level of amenities, services and unique features

• First introduced in early 2003• Best Western currently has 81 PremierTM

properties• Must have at least 7 key features

Special Amenities and Services

• China tumblers or

glass tumblers

• Room service

• Suites

• Shower/tub

• Closet doors

• Additional in-room toiletries

• 16-inch televisions • In-room movies or VCR

• Turn down service • Porterage/Bell services

• In-room safe

• Two or more telephones or one cordless telephone

• Best Western’s commission program

• Travel agents will receive a statement

listing each reservation by property and

paying all commissions in one check.

Regional Guestroom Packages

• Began in October 1999

• Offering member hotels a designing and ordering process

• Reducing the time and money involved in a guestroom redesign while still receiving professional design expertise

• Seven regional packages: global, leisure, city, country, lodge, southwestern and western themes

Best Requests

• Providing amenities and services guests asked for and can count on at every Best Western

• Delivering BestRequests around the world is another step forward in guest satisfaction

• Introduced in September 1988 as the Gold Crown Club

• The GCCI program is the international frequency program for the Best Western travelers

• Allowing guests to exchange points for a free room

• Membership grew by almost one million members in the last year

• In March 2004, introduced NASCAR Speed Rewards as an extension of GCCI

• A global volume corporate program developed for corporate clients

• In order to maximize travel budgets without sacrificing service and quality

TOP 10 Hotel Groups

Top 20 Hotel Brands

Organizational Structure

Current Strategy

• NASCAR

• Marketing

• Technology

• Zero Based Budgeting

Current Strategy Evaluation

• A three-year partnership with NASCAR made Best Western the sport’s official hotel since January 1, 2004.– NASCAR’s demographic: 75 million auto

racing enthusiasts who travel on average 350 miles to a race and stay in a hotel two nights per visit.

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• $7.9-million plan to install wired and wireless High-speed Internet-access program (HSIA) in all 2300 domestic Best Westerns by September, 2004.

• $10.6-million project of installing a new computer system in each property.

Current Strategy Evaluation

Technology

• Three-year pact with Keane and TeleTech Services– To improve efficiencies of scale and

reflect the steady growth of online booking

– To double the time and development budget for Best Western

Current Strategy Evaluation

Technology

• Reposition Best Western with more human touch in 2003 by Miller in Los Angeles, a company of media planning and online advertising. – from an idea of wall-street type into an aim

for main-street – to connect with guests on multiple levels

Current Strategy Evaluation

Marketing

• Seven languages besides English can be displayed on the reservations website.

• Four languages were added in 2004 to the company’s intranet. – increase some of the communication

between members in more than 80 countries

Current Strategy Evaluation

Marketing

• Tom Higgins, the former CEO, introduced zero-based budgeting (ZBB) philosophy to Best Western.– From an entitlement-based culture to a

performance-based culture– Moving towards focus and discipline

Current Strategy Evaluation

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ased B

udgeting

Mission Statements

• To provide exceptional hospitality services to our guests through anticipating and exceeding their individual needs.

• The mission of Best Western International is to enhance brand equity and increase member value.

Culture

• Entitlement-based culture to performance or results-based culture.

• Non-profit association of member hotels.

• Hotels chosen to be part of a brand because of their individuality.

• Services available to members on fee individual fee basis.

Leadership

• 1946-founded by M.K. Guertin

• 1966-Seven person Board of Directors elected

Leadership

• 1998-2001-James Evans, CEO and President, Mike Scholz Board Chairman

• 2002-2003-Thomas Higgins, CEO and President, Nayan Patel Board Chairman

• “Take on the mentality of a board of a public-company, instead of not-for-profit company.”

Leadership

• 2004-Present: David Kong, CEO and President

• Larry McRae, President of the Board

Financial Highlights

Financial Highlights

Financial Highlights

Financial Highlights

Financial Highlights

Financial Highlights

ReferencesBest Western. (n.d.). Retrieved October 7, 2005 from

http://www.absoluteastronomy.com/encyclopedia/b/be/best_western.htm

Best Western 2004 Annual Report. (n.d.). Retrieved October 7, 2005 from http://www.bestwestern.com/aboutus/annualreports.asp

Best Western: From 1946-Present. (n.d.). Retrieved October 7,2005 from http://www.bestwestern.com

Best Western Outsources IT. (2005). Lodging Hospitality, 61(1), 52.

Best Western Targets NASCAR. (2004). Lodging Hospitality, 60(5), 8.

Best Western Revs Up for 2004. (2004). Lodging Hospitality, 60(1), 8.

Experience the Best Western International Difference. (2005). Hotel and Motel Management, 220(14), 28.

Flass, R. (2003). Best Western to Aim for “Main Street” Adweek, 44(48), 10.

Gunter, H. (2004). Hotels Initiate Changes with Dedicated Diversity Officers. Hotel and Motel Management, 219(14), 19.

Higley, J. (2004). BWI Takes Aim at More Success. Hotel and Motel Management, 219(20), 3.

Higley, J. (2004). Best Western Evaluates Design Program, Performance. Hotel and Motel Management, 219(20), 26.

Higley, J. (2003). Technology, Marketing Shift BWI into Fast Lane. Hotel and Motel Management, 218(21), 1.

References

ReferencesIntercontinental Hotel Groups Maintains its Position as World

Leader. (2005). Retrieved October 10, 2005 from http://www.mkgconsulting.com

Zero Based Budgeting (ZDD). (n.d.). Retrieved October 10,2005, from http://210.210.18.114/EnlightenmentorAreas/finance/CFA/ZeroBaedBudge.htm

Discussion Question

Suppose you are an owner of an independent hotel looking to franchise, what are the advantages and disadvantages of a publicly traded organization compared to the non-profit association membership of Best Western?