Best Western CEO hopes for record summer performance – HOTELSMag.com
BWH Hotel Group has emerged from the pandemic with a strong balance sheet, while also providing relief worth millions of dollars to their member hoteliers, according to President and CEO Larry Cuculic.
Appointed to the top job in December 2021, Cuculic says while the company with 4,500 properties under 18 brands is not planning on launching new brands right now, it is focusing on growing the portfolio of its extended-stay options — Executive Residency and SureStay Studio. In the meantime, Best Western’s 2019 acquisition of WorldHotels has also helped accelerate its global reach and position in the upper upscale and luxury segments.
“As the pandemic wanes internationally, North America will remain a strong growth market. Additionally, noting our strong international partners, our development strategy will continue to place an emphasis on key international markets such as central Europe and APAC,” Cuculic recently told HOTELS.
With the group inching towards its pre-pandemic performance levels, Best Western’s weekend occupancy is already similar to 2019 levels and midweek occupancy over the last few weeks across the Best Western, Best Western Plus and Best Western Premier brands were only marginally lower than 2019 levels. With that in mind, Cuculic is hopeful of a majority of the company’s properties will have a record-breaking summer in terms of RevPAR.
Cuculic, who started his career with the U.S. Army, says his military service and background has shaped him as a leader.
In conversation with HOTELS, Cuculic, among other things, talked about how his military service with the U.S. Army and his background shaped him as a professional. “Leadership is honesty, integrity, commitment, caring about people, and trust,” he said. “I believe in leadership by example. I have a deep sense of caring for our associates and hoteliers, and I believe the best way to lead is with a spirit of collaboration and trust. I want my team to work hard and learn every day, and know that they make a difference.”
Read on to learn more about Cuculic’s outlook, strategy and what he has to say about Best Western’s latest technological improvements to woo travelers.
HOTELS: How are Best Western brands going to fare in a volatile global economy?
Larry Cuculic: We have experienced challenges in our global economy for the past two years as a result of the pandemic. While there are new challenges, it is important to note that we emerged from the pandemic with the strongest balance sheet in our history, while also providing millions of dollars in relief to our hoteliers. We are well positioned to continue thriving as we are witnessing a strong global resurgence in both business and leisure travel, and while there will be pressures placed on our industry from external sources, we remain optimistic that with 4,500 hotels in 100 countries around the world in every segment from economy to luxury, our future is bright.
H: What are owners telling you about their needs most often since you took over?
LC: The labor challenge continues to be an area of concern for our owners. As an industry, we need to come together and rebuild our image as an employer of choice. The industry’s reputation was damaged by the pandemic due to the significant job loss we experienced. According to an industry report, it is estimated that the global hospitality sector lost approximately 62 million jobs in 2020, with Asia Pacific experiencing the sharpest losses. However, we are in the midst of a strong and promising global recovery, and our industry is one of the most exciting and dynamic in the world. People who have a caring spirit and attitude will return to hospitality because it is aligned with both what they are good at and what they like – taking care of people.
In the meantime, to support our hoteliers, we are providing human resources training and sharing best practices to improve retention and recruiting. Compensation is important, but workplace flexibility and benefits are similarly important – recognizing the changing needs of the workforce stemming from the pandemic. Likewise, it’s important to ensure associates know that they are valued members of the hotel team.
H: Your career started with the U.S. Army. How has that shaped you and your professional journey so far?
LC: I am very proud of my military service and background. I graduated from West Point, the United States Military Academy and served in the Army as a Judge Advocate officer after graduating from Notre Dame Law School. In every military assignment, I grew as a person into who I am today. West Point taught me leadership, integrity, honor, and commitment. As a military prosecutor, I practiced with a focus on always doing what is right and just. As a special operations or “black ops” legal advisor, I learned the importance of being thoughtful, strategic, and being “calm under pressure.” Continuing my education, and graduating from Command and General Staff College, I learned the value of teamwork, transparency, and collaboration. And as a military judge, I learned to listen and to respect all opinions – and any decision needs to be well-thought – recognizing that every decision impacts someone’s life. Leadership is honesty, integrity, commitment, caring about people, and trust.
H: How is your style of management and leadership different than your predecessor, David Kong?
LC: David was a talented leader and brought tremendous success to our company. Rather than comparing our leadership styles, I’ll speak to mine.
I believe in leadership by example. I have a deep sense of caring for our associates and hoteliers and I believe the best way to lead is with a spirit of collaboration and trust. I want my team to work hard every day, learn every day, and know that they make a difference. I hope to enable their success while challenging them to do their best. The hardships of the past two years reinforced the importance of coming together as a team when times are tough. I believe we will continue to do just that – coming together as a global family of hoteliers and associates, striving each day to reach new levels of success.
H: Consumer demands have seen a major shift during and after the pandemic, with an increasing number of travelers preferring experiential stays and bleisure vacations. How is Best Western adapting to these changing trends? How else will Best Western respond to evolving needs and what your competitive set is doing differently?
LC: Combining business and leisure travel is something we’ve seen in the industry for some time. Some of our brands in the boutique segment such as Aiden and Vīb offer open spaces, modern lobbies, and cocktail bars where our guests choose to work during the day and socialize in the evening. In addition, with approximately 4,500 hotels around the world, several of our properties are in destinations ideal for a blend of leisure and business travel and many of our properties provide business centers, meeting space and enhanced technology to meet business needs. We recognize the importance of social media to ensure travelers know that we have hotels that provide experiential stays. A perfect example is the V8 Hotel in Stuttgart, Germany – the experience is truly unique. Where else can you sleep in a Mercedes or Cadillac? Of course, we will continue to monitor the evolving needs of our travelers and will continue to do everything we can to meet and exceed those expectations.
H: The pandemic has accelerated the hospitality industry’s shift towards technology automation. Will automation completely replace the front desk? What’s the next tech-related move being considered by Best Western and how do you convince owners to make the investment now after such a tough few years?
LC: We have invested heavily in our technology platform, assets, and personnel. We revamped bestwestern.com and the results have been remarkable. Last summer, bestwestern.com set several records of performance exceeding the prior record-setting year of 2019 – we continue to set daily and monthly revenue producing records.
Will automation completely replace the front desk? Not in the near term.
How will Best Western convince hoteliers to invest in innovation? Our hoteliers are smart – they invest when there is a need, a business case, and an appropriate return on investment.
We recognize that consumers are relying more and more on the mobile experience, and we are investing heavily in that direction as a result. As we focus on improving the mobile experience, we are developing the ability to accept additional forms of payment besides credit cards. We also want to make our gift cards easier to use so that they can be redeemed online.
H: How strong is the Best Western pipeline today versus two or three years ago? Which parts of the world is Best Western looking at for expansion opportunities? Which brands do you expect to have the most growth?
LC: BWH Hotel Group remains focused on growing our presence globally. In recent years, we have had tremendous success in thoughtfully increasing our scale in key locations throughout the world. With the acquisition of WorldHotels in 2019, we expanded our global reach, while adding brands in the upper upscale and luxury segments. In addition, we have launched new brands that appeal to today’s travelers and developers, including four boutique offerings: Vīb, GLō, Sadie and Aiden. I’m extremely proud of our diverse and contemporary portfolio with 18 distinctive brands across every chain scale segment – from luxury to economy.
In terms of regional focus, and as the pandemic wanes internationally, North America will remain a strong growth market. Additionally, noting our strong international partners, our development strategy will continue to place an emphasis on key international markets in central Europe and Asia Pacific. Our pipeline is as strong as ever.
H: Are you looking to launch new brands?
LC: We are not looking to launch new brands right now; however, we are always exploring the right avenues for scalability and development in key markets across the globe.
H: Are you satisfied with the growth of Best Western boutique brands? What about WorldHotels? What can be done better across the company to drive unit growth?
LC: We are experiencing tremendous success with our boutique brands, and they will continue to be a big player in our growth plans – hotels with a local flair are in demand from both developers and travelers. We know that our travelers are looking for great experiences with modern amenities whether they are traveling for business or leisure. Recognizing the needs of both travelers and developers, we launched our urban, upscale boutique brand, Vīb. We already have a Vīb in Antalya, Turkey, and in Bangkok, Thailand, as well as others in the U.S. That brand, along with our boutique brand Aiden, which has locations in France, Austria, U.S. Australia, Italy and South Korea, will continue to be a major focus for us.
With regard to WorldHotels, we recently promoted Ron Pohl to president of WorldHotels. Throughout his tenure with BWH Hotel Group, Ron has made many significant contributions, including increasing the company’s presence around the world. In his new role, Ron will be ensuring the organization’s strategic goals are met to include increasing scale, driving exceptional revenue to hoteliers, and enhancing the brand’s image.
H: How are owners performing today coming out of the deepest recesses of the pandemic?
LC: We’re positive about the outlook of both business and leisure travel and we are trending towards pre-pandemic levels. For example, our weekend occupancy is already on par with 2019 levels, and our midweek occupancy over recent weeks across our Best Western, Best Western Plus and Best Western Premier brands is only slightly behind 2019 levels. Meanwhile, rates are strong and we’re expecting the majority of our hotels to have a record-breaking summer in terms of RevPAR. Regions like Canada are springing to life now, and primary markets, which had been so severely impacted during the pandemic, are trending toward recovery.
H: What is your performance forecast for Best Western?
LC: We are confident that we will have an extremely strong summer season – recent performance and future bookings are consistent with the experts’ predictions. The industry’s reasonable belief is that business travel will eventually return as well – again, we agree.
Our forecast — we have great hoteliers who provide great hotel stays. Because they exceed guest expectations, and build brand loyalty, we predict continued record-setting success — that is our forecast.