New Best Western CEO Targets Loyalty, Corp. Transient

Larry Cuculic takes over as BWH Hotels president and CEO on Dec. 1. He’s been with the hotel company for more than a decade, as part of the general counsel’s office, making his selection to succeed long-time leader David Kong not the most predictable choice. He spoke with BTN senior editor Donna M. Airoldi in early November about his plans for the future of the company, and the return of corporate travel and group business. The following has been edited for length and clarity.

BTN: Your background has been as a lawyer. Which experiences at Best Western have been the most helpful to prepare you for your new role?

Larry Cuculic: In my role as general counsel the past 12 years, I’ve been afforded the opportunity to gain wide and deep understanding of Best Western, its membership and the industry. Because I’ve been able to learn across all aspects of the organization, I hope that it’s provided the background to make well-thought decisions that take into consideration all aspects of the organization. Not having had to focus on any one area, I’ve been able to gain a breadth of experience. I think that serves a leader well when they become a president and CEO because they understand the various aspects of the company and what is important for the future success of the company.

BTN: What are your plans for taking Best Western forward post-pandemic?

Cuculic: We recognize the importance of our Best Western loyalty program, and we will be very focused on growing it. We launched [a program] for members to pay with points. Our loyalty members have points unused and may not have points for a free night redemption. [Members] can use unused points to buy down the rate. We believe that will increase loyalty program benefits not just for guests but also hoteliers, because it will drive revenue to them by increasing the use of the rewards program to book future stays.

BTN: The company revamped the rewards program in 2016. Why is it still so important to focus on it?

Cuculic: Best Western Rewards leverages the strength of the Best Western name. What we have done is offered rich promotions associated with the rewards program. … Keep in mind, we recently acquired WorldHotels and initiated the WorldHotels Rewards program, which integrates with Best Western Rewards. [They] can leverage the strength of each other’s program. We recognize it’s truly important for the brand to deliver brand revenue to our hoteliers. They belong to Best Western because they want us to deliver brand revenue, and that is through our voice channel, dot-com, our loyalty program. Because they’ve invested in these programs, as a result they deserve the benefits. Similarly, our Best Western Rewards members are guests and invested in the program, and we want to make sure they have the ability to use those points so they can travel where they wish to travel and use those points for their benefit.

BTN: How does strengthening further the loyalty program affect your members who are business travelers?

Cuculic: We have a BW Business Advantage program that allows business travelers to leverage the program. We look at is as, that business traveler can stay at a Best Western hotel and get Best Western Rewards points. When they wish to travel with their family for leisure, they should have those points to use for their family travel because they’ve earned those points. And that is how you build guest loyalty. It’s the business traveler who can also leverage Best Western hotels for their family or non-business travel.

BTN: What other plans do you have for the future?

Cuculic: We’re very focused on targeted and well-thought marketing, ensuring that we have return on ad spend. Development is always a focus. We are fortunate we have 18 brands right now across all market segments. We think we have future potential to grow all of our brands. And it’s through our sales programs and showing clients we have the type of hotels in our diverse locations globally that will meet their travel needs. Wendy Ferrell does a terrific job leading the sales department. She has a strategic plan with regard to how they’ll grow their sales initiative focusing on those very important groups and business travel programs. We do tremendously well during the weekend, [but] we want to increase revenue to our hoteliers for midweek business. I’ll also point out we have always had a culture of building relationships with sales and business partners. We think that is tremendously important post-pandemic.

We see our customers wanting to not just have chainwide agreements but have flexibility associated with those chainwide agreements, because flexibility is a top priority right now. It’s difficult to say what anybody is going to do one year or six months out. But if [buyers use] the chainwide agreements we’re offering, and they are in fact flexible and take into consideration duty of care, cleaning and well-being being a focal point, we think business travel will pick up, and we will do our best to shape what we are offering in the recovery stages. We’ve always been customer-centric, and that won’t change. But we also will be nimble, flexible and be able to adapt to their needs over time.

BTN: We know corporate travel has been slower to return than leisure, but what other trends are you seeing with corporate transient?

Cuculic: Business travel is picking up. It’s returning and taking shape in stages. You cannot make any assumptions as to where [business travelers] will be traveling and when. You have to be responsive and flexible. What we’ve seen is a volume increase in [requests for proposals]. As mentioned earlier, there is increased interest in chainwide agreements. Again, there is this focus on flexibility as the top priority. Which goes to the heart of your question: Can you predict the future in a non-predictable world right now? The likely answer is no, but what you can do is be flexible and allow your business traveler to make decisions as early as they can, as often as they can, but realize those travel needs may change. … Hopefully as more people embrace vaccination and public safety and doing things for the good of our community and overall health and well-being, business travel likely will pick up, because everyone will be more comfortable traveling.

BTN: Where do you see room for growth in the corporate segment? Is it with different brands? New locations? SMEs versus large enterprises?

Cuculic: While we’ve always focused and prioritized accounts that are a good fit for our portfolio, what I think we had seen and the industry has seen is that the larger cities have been slower to come back, which typically means the larger group business has been slower to come back. But we have seen growth in sports, entertainment, project business, government business and disaster relief as well. And certain corporate and association events of varying sizes, but many of those groups include room-only blocks without any meetings or events on-site, because they are still hesitant with regard to large meeting sizes. I think that is logical at this point. It’s smaller groups, just to ensure the safety of their own associates with regard to those matters, focused on non-large urban, smaller group business.

BTN: At your recent convention, the company noted a desired revamp for Best Western Plus. Is it the intention to have the brand appeal more to the corporate traveler?

Cuculic: We’re extremely proud of our Best Western Plus properties. It’s always been a preferred brand among both business and leisure travelers. But we recognize there is potential for Best Western Plus to increase its [average daily rate], occupancy and RevPAR, and that is primarily through midweek business. We engaged a third-party consultant to study and to conduct an in-depth survey and help us decide what are those differentiating amenities that midweek travelers look for. Then, can Best Western Plus offer those amenities such that they can attract more midweek business and increase their ADR, occupancy and RevPAR? As travel rebounds and demand comes back, we are eager to deliver that enhanced experience to provide midweek business travelers a stay that they can reasonably expect. Let’s meet their expectations.

BTN: What are your thoughts on remote work and how that might change the corporate business for hotels—as well as for corporate groups?

Cuculic: I think the media has reported on companies being more flexible than they historically have been with regard to remote work. I think it will have some impact on business travel. People have become accustomed to Teams meetings, for example. But what is interesting is Teams wasn’t developed because of the pandemic. Teams and Zoom meetings existed prior to the pandemic. We’ve just learned to leverage them more. Some associates, no matter the business, have learned to adapt, and the companies are allowing increased remote workforce offerings. But at the same time there is no substitute for meeting in person. There will always be a need for people to travel for business needs, establish those relationships in person and conduct business face-to-face. Will it be less than in 2017, 2018, 2019? Initially, it likely will be. But at the same time, people recognize the importance of establishing relationships face-to-face and having those meetings in-person and being able to interact on a personal level.

BTN: Any potential changes in how you might shift your approach for corporate groups?

Cuculic: I think again, being as flexible as possible with regard to group business. Listening to what their needs are. And letting them know that post-pandemic, we care about their health, well-being and safety. That will be tremendously important. We were one of the first companies to put in place a standard of care regarding the pandemic. It has served us well because it established a confidence level in our guests and travelers that we care about them, and we will continue to do that and emphasize that. RFPs look for that. Travel managers are looking for that.

BTN: How does your pipeline look, and where do you see the most development on the books, either in terms of destinations or brands, or both?

Cuculic: We continue to see growth across all of our brands. What I offered to our members is that we would be very thoughtful of development. We respect the business that our hoteliers have established in their markets. Any development certainly will be well-thought so we do not negatively impact any of our hoteliers. We are focused in urban and suburban markets where there are no current Best Western hotels but opportunities for growth. Those cities and pockets exist, and that is where our team will be focused. It’s also a result of research. There is no geographic answer. We have in North America 2,400 hotels at this point. And SureStay has been a tremendous success story for us.

BTN: What was the most important lesson you have learned from David Kong during your time at Best Western?

Cuculic: The most important lesson is being a good listener. So that you understand what our organization wants and expects, such that you know what their expectations are and then you can deliver on those expectations. You’ve got to always have that, make sure you understand what our membership truly wants and expects. If we do that, I think we can meet those expectations, then meeting those expectation can really define our success. It’s about driving revenue to members, providing the support they need. It’s about understanding and listening all along as we go through the future of the organization. What David has taught me is to really listen well.

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