A major operational shakeup at BWH Hotel Group is unlikely under new CEO Larry Cuculic. The company’s recent performance numbers show why that is.
Don’t expect anything radically different just because there’s a new CEO in charge of Best Western parent company BWH Hotel Group.
Larry Cuculic succeeded longtime CEO David Kong earlier this month into the top job at the global hotel company. Kong’s 20-year tenure was noted for taking the company from one brand to 18 and forming the BWH Hotel Group parent company. There was also a failed attempt at changing the company’s non-profit membership structure to better situate against the likes of publicly traded competitors like Marriott and Hilton.
Cuculic, who has been with the company for 12 years, is focused more on building BWH back from the pandemic on its existing line-up of brands and corporate structure rather than immediately launch a wave of change.
There’s good reason for this: The company’s North American performance in November was consistently above 2019 levels, and even mid-week bookings — typically an indicator of business travel — eclipsed pre-pandemic performance for several weeks out of the month.
“I do not have any plans to make any personnel changes at this time,” Cuculic said in an interview with Skift. “I do, of course, intend on working with the board of directors to take a look at our 2022 business plan and key performance indicators to make sure we’re all aligned.”
BWH had pushed into higher-end sectors over the years with boutique and lifestyle brands like Aiden, Glo, Vib, Sadie, and the BW Premier Collection soft brand. Some of the brand additions enabled owners of existing BWH hotels to boost their daily rates and attract newer clientele.
Competitors like IHG Hotels & Resorts CEO Keith Barr often discuss brand additions like filling in the missing rungs of a ladder, but Cuculic thinks his own ladder is full.
“We don’t see new brands on the near-horizon,” he added. “I think we are well-positioned across all chain scale segments at this point, and our development team is focused on building those brands out.”
BWH Hotel Group’s new chief executive is also unlikely to revisit Kong’s prior plan to move the company from its non-profit membership model to a for-profit enterprise. The private, non-profit BWH operates on a model where the company licenses brands to owners who become voting members of the organization.
Company leadership previously touted that stalled plan as a way to make BWH more competitive. But Cuculic defended the company’s membership structure while noting the brand line-up today is different from during the for-profit push.
“We do have a breadth of offerings now. That changed the past 12 years, and we’re now proud to offer something across every market segment, from economy to luxury,” Cuculic said. “Having that breadth of offerings is important for our guests, but it’s also really important to developers so that they know those options exist.”
No plans for adding new brands doesn’t mean Cuculic is sitting idle during the pandemic recovery.
He sees plenty of growth opportunities with BWH’s existing slate of brands, particularly through conversions, a type of deal where the owner of an existing hotel takes on a new brand agreement.
Leaders at all the major hotel companies, from Marriott International to Choice Hotels, see conversions as a major growth vehicle coming out of the depths of the pandemic due to lenders shying away from entirely new hotel projects.
“The biggest trend for 2022 is conversions,” Cuculic said. “Conversions will be the highlight of everyone’s pipeline as lenders remain extremely cautious.”
There’s also likely to be more focus on building up brand awareness for Best Western Plus, a brand that has typically catered to both business and leisure travelers. Cuculic indicated there’s potential to beef up the brand’s business traveler appeal, something that makes sense given the broader hotel industry sees more opportunity in catering to the type of road warrior business travelers normally drawn to Best Western Plus’s segment.
“It’s a brand we’re extremely proud of, but we believe there’s potential for that brand,” Cuculic said. “As business travel rebounds, we think it’s important for them to know we’re focused on delivering the amenities they would expect.”
Photo credit: New BWH Hotel Group CEO Larry Cuculic doesn't plan to shake things up at the hotel company and its 18 brands anytime soon. BWH Hotel Group