Skift Take
David Kong took Best Western into a new era of multiple brands across a variety of price points. The next CEO has to take the reins and throttle the company out of an uncertain pandemic recovery.
David Kong, the current longest-running CEO of a major hotel company, is set to depart the BWH Hotel Group C-suite at the end of this year.
The search to fill Kong’s high-profile role at BWH will be closely watched within the global hospitality industry with company’s board potentially favoring internal candidates.
Kong, 69, joined Best Western Hotels & Resorts in 2001 and became its CEO in 2004. His 20-year stint with the company was noted for significant growth, taking the company from one to 18 brands and eventually forming the BWH Hotel Group parent company.
The CEO’s tenure in the greater hospitality industry is also a true story of upward mobility. Kong immigrated to the U.S. from Hong Kong as a young adult and began working in hospitality as a busboy and dishwasher.
“This industry has empowered me to dream boldly about the future and to pursue those dreams without hesitation,” Kong said in a statement tied to the retirement announcement Monday. “I feel blessed to have been surrounded by exceptional teams throughout my career and through sheer passion and dedication, we have chased bold dreams and achieved what many might have considered impossible.”
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But there were also headwinds: Best Western’s owner membership base voted down a Kong-led effort to take the company public in 2019 to better compete with the likes of Marriott and Hilton. A year later, the pandemic was a catastrophe for the entire industry.
While Best Western prepared for the worst during the initial months of the pandemic, the company also managed to post the highest numbers ever seen for the company’s revenue per available room, the hotel industry’s key performance metric. The company appears on track to best that record again this year, Kong said Monday afternoon in an interview with Skift.
“I just feel very proud that, despite the challenges, we were able to weather the storm,” he added.
Kong worked as a food and beverage director at Omni Hotels & Resorts, an associate vice president at Hyatt, and as a hospitality consultant at KPMG prior to joining Best Western.
His time at Best Western is noted for the company beefing up its brand portfolio, including into more upscale tiers. Its acquisition of the luxury soft brand group WorldHotels Collection in 2019 sparked the new BWH Hotel Group name, indicative of the company’s push into newer markets.
But one of his biggest challenges pre-pandemic was a quality assurance initiative between 2006 and 2008 that saw the company part ways with many owners and reduce its portfolio size by roughly 40 percent, Kong said.
“It took a lot of courage and strength to do that,” he added.
Even competitors in the industry took note of the long-time leader’s lasting mark on the company.
“David took the company through a significant transformation from a single brand to a multi-brand family,” Choice Hotels CEO Patrick Pacious, said in a statement. “That required a lot of listening, a lot of partnership and a lot of persuasion, but created a great outcome for his company and his members.”
Hyatt CEO Mark Hoplamazian noted in a statement Monday the “sense of family life” Kong brought to the company while leading it through its most significant era for expansion.
Hitting a Ceiling
Kong’s next step for growth in recent years entailed transforming Best Western into a public enterprise, a move he and other company leaders felt would position the company to compete better with major hotel groups like IHG Hotels & Resorts and Marriott.
Best Western’s non-profit model enables the company to license brands to owners who become voting members of the organization. Companies like Marriott and IHG operate on franchise models where owners may voice concerns on operational matters, but they ultimately don’t have the power to vote down policy like a costly new brand standard.
“Scale is very important today,” Kong told Skift in early 2020. “You look at Marriott and Hilton. Because of their scale, they can afford to make a lot of investments in a lot of areas. When you don’t have scale, you can’t make those investments and you can’t drive the kinds of results they can drive. Over some time, the distance between Hilton and Marriott to Best Western grows bigger and bigger, and it becomes more and more difficult for us to catch up.”
Best Western members voted down going public in 2019, and Kong continued to note the move would have better positioned the company during the pandemic.
The company still navigated the first few months of the crisis with no debt and managed its finances “very well,” Kong told Skift in a separate interview last year. But he still would have liked the same financial tools as his for-profit competitors.
“Who is running TV ads right now? It’s a public company running TV ads,” he said of the early months of the pandemic. “What is the offer? Stay two times, get a free night. You know how much that costs? Millions. A TV campaign costs tens of millions. They can afford that. We can’t.”
He has since softened his stance when it comes to discussing the nature of the company, instead focusing on an optimistic future.
“It’s anyone’s guess as to how it could have panned out, but that’s water under the bridge and I don’t really even want to talk about it because it’s counterproductive,” Kong said earlier this year about the failed for-profit endeavor.
A Succession Plan
It wasn’t immediately clear Monday who is next in line to replace Kong, but he did note that he submitted to the company’s board a list of “three very strong internal candidates.”
While he didn’t divulge the names, there are a few leading candidates, according to sources familiar with BWH Hotel Group and the successor search.
Dorothy Dowling, an executive vice president and the company’s chief marketing officer, has a strong reputation across the entire hotel industry and has been with the company since 2004. Mark Straszynski, the company’s chief financial officer, as well as external candidates are also possibilities.
Marriott’s own successor decision in picking Anthony Capuano to take over as CEO earlier this year following the death of Arne Sorenson appeared to favor someone with more experience in development and operations.
Should the BWH board follow that guide, look for names like Ron Pohl, the company’s chief operations officer, Gregory Habeeb, president of WorldHotels, and Brad LeBlanc, BWH’s chief development officer, as contenders.
LeBlanc appeared to view the company’s membership owner model as a strength when it came to navigating through the pandemic and avoid franchisee poaching from bigger competitors.
“We have a membership body that’s been loyal to us for 75 years,” LeBlanc told Skift earlier this year during an interview with Kong. “The membership body remembers how well we treated them in great times and the very difficult times like 2020.”
Kong indicated the new CEO will be announced in early October. The company’s board, however, was focused more Monday on the retirement news than who its next CEO might be.
“David Kong is a once in a lifetime leader whose contributions to Best Western and BWH Hotel Group are truly immeasurable,” Ishwar Naran, BWH Hotel Group’s board chairman, said in a statement. “It has been the honor of my career to work alongside David and witness first-hand his remarkable passion and dedication to our industry.”
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Tags: best western, coronavirus, coronavirus recovery
Photo credit: BWH Hotel Group CEO David Kong's 20-year tenure with the company, 17 of which were as CEO, is set to conclude by the end of this year. Best Western Hotels & Resorts / Best Western