Episode 72: Wytze Van Den Berg

Published: 26 May 2023

Best Western Hotel Group's recent acquisition of World Hotels and expansion into the luxury market is a reflection of their CEO's global growth strategy. With a goal of having 80 hotels in Africa by 2026, Best Western is actively working with existing hoteliers and owners to rebrand and expand their footprint on the continent.

Wytze Van Den Berg, the Vice President EMEA, explains how Best Western has integrated the World Hotels team into their own, adding experienced professionals in the upper upscale and luxury segments to their team. Best Western will continue to use all of their brand names for consumer marketing purposes, but for B2B sales, they will reach out to clients as BWH Hotels.

In addition to growth and expansion, Wytze also highlights the importance of cost savings and competitiveness in the industry. Rising labor, energy, and construction costs make it increasingly important to collectively source materials for construction and invest in technology to make distribution more economic. Operational cost savings through combined buying power also play a crucial role.

Best Western's strategic approach to growth and expansion in Africa and beyond is a reflection of their commitment to offering a wide range of options to keep customers loyal while remaining competitive in the current market. As the industry continues to evolve, Best Western is positioning itself for continued success and growth.

Matthew Weihs (00:00:00) - Hello and welcome everyone to another Africa Hotel, uh, investment Forum podcast. The podcast that looks to shine a light on everything investment wise for the African continent. I'm here today with Vi Vandenberg, uh, the Vice President of International Operations, uh, in AMEA for Best Western Hotel Group. Welcome Visa.

Wytze Van Den Berg (00:00:23) - Thank you. Thank you for having me.

Matthew Weihs (00:00:26) - It's an absolute pleasure. Now, firstly, for those who perhaps don't know much about the brand, which as we go into later, we'll probably unearth actually in the middle Eastern Africa, that isn't such a well-known brand, but tell us a little bit about the company and the footprint you have, especially in Africa.

Wytze Van Den Berg (00:00:46) - Um, well, many, many people know best Western hotels. We have been around for over the 75 years, uh, started originally in the US of course, as as the name does kind of giveaway. Um, our global footprint now is about 4,800 hotels in including pipeline, um, for, we have about 20 properties. Um, today it is a very important market to us. So we have a very active pipeline with about another 20, 25, uh, properties in, in mainly the eastern and the western part of Africa. Um, and, and also in the north part of Africa, Morty, uh, um, Morocco, uh, Algerian region.

Matthew Weihs (00:01:33) - Uh, these properties tend to have, are there a range of sort of room sizes that you go for or are you, uh, specific?

Wytze Van Den Berg (00:01:41) - It's, it's, they vary, but, but, but the average hotel is between 90 and a hundred twenty, twenty five rooms. Of course, there are a couple of larger rooms and a couple of smaller rooms, the more boutique hotels. Um, but, but yeah, between 90 and 125, that is the efforts, um, we're, uh, having most of the time looking for.

Matthew Weihs (00:02:00) - And, um, actually you told me, which I wasn't aware, actually, there's 19 different brands under the, the group now. So it's, it's, I always thought that there was only a sort of small handful. Um, I suppose prior to the Covid, uh, the big news was I think in 2019, I think it was 2019, uh, best Western acquired World Hotels, um, obviously added to that, um, uh, group. So you worked as well directly for World Hotels. Um, what do you think that it gave Best Western, uh, what did it add to the business?

Wytze Van Den Berg (00:02:39) - So, so, um, really it, it started even before, um, best Western acquired World Hotels. Um, since, I mean, the past 15 years, we've seen a large growing big hotel companies, um, hospitality companies, and basically it's, it's, it's twofold, right? It's one of the things our customers, like big corporations are asking us. They want to deal with a party who can help them cater to the travel needs from economy product to the five star plus product. Um, where Be, be Western was traditionally always in the mid-market. Um, we started to diverse that mid-market in, in, in, after the 2010s. So we created Best Western Plus, best Western Premier for Upper Midscale and upscale, and also evaluated into the extended stay, uh, brands, uh, more lifestyle, uh, brands, like Five by Best Western Aid and by Best Western. Um, and then about the, the middle of, uh, the last decade, we, um, started our own new economy brand, it's called Sure Stay.

Wytze Van Den Berg (00:03:44) - We have about 400 properties live today across the globe. And that was really to tap into that, you know, that that economy and budget part of the market. Um, then in 2018, the opportunity arises, um, that we could buy World Hotels, which was playing in the opera, upscale in, in the luxury. Um, and that was effective early 2019. So we bought World Hotels, and now we, if you see Toto portfolio of brands, what we have, it's 90 different brands. It's basically a group of four or five brands in the economy, budget segment, um, four different world hotels, brands, the luxury being the luxury world hotels, but also for lifestyle and boutique hotel we have crafted by World hotels. Um, and then we have a fe rarity of, of, uh, midscale brands. So yeah, if you add it up, it's all, it, it, it's 19 brands. And again, the, the goal is really to cater to, um, not only the customers who are buying all brands, but also the people in our loyalty program who will one day, you know, be in a Midscale hotel and wanna have a very experiential, uh, luxury, um, uh, journey the next time. So in order to cater to all those people, um, we, we ended up, where we are with these 19 brands today,

Matthew Weihs (00:05:02) - And other, I guess, big changes in the last few years has been the adoption of a new C E O, which I think was sort of 12 months or so ago now. Um, and since that appointment, uh, the focus has changed for the organization, you were saying to me earlier that, you know, obviously Europe, America, and then now Middle East Africa, what are the goals then across Middle East Africa for the, for the company?

Wytze Van Den Berg (00:05:33) - So, um, let's say in the, let's say in the past, uh, we had a bigger focus on North America. Um, there was a big focus on Continental or traditional Europe as well. But now since, since, uh, Larry KK is, uh, is our ceo, we have a far more global, uh, strategy and a growth strategy. Um, so a lot of things, uh, happened in between. Um, but I think the two major things to, to really point out is now that, um, we have a president for international operations, so everything for the B W H hotels outside of North America. Um, um, and the gentleman is, uh, is Ron Paul. He, as I said, that the executive, uh, team in, in our, uh, uh, Phoenix office as well. So that gives us the ability, ability to have a broader focus on growing in, in more new regions, every car, middle East, of course, being one of the most important, uh, of them.

Wytze Van Den Berg (00:06:31) - So if you look to our targets, um, we want to grow our footprint. I said it's about 20 hotels and about a 20 plus in the pipeline. Uh, but our ambition is by, uh, 2026 to have about 80 hotels in the continent of, uh, Africa. Um, not, not mine, not including the Middle East. Uh, that, that's a different number. Um, so, um, yeah, how do we plan on doing that? We have hired a couple of new development people in the Middle East and in Africa, so that we have the right people, the boots on the ground to, you know, sit with, um, owners in fes, um, and of course also existing hoteliers, either looking for, uh, a new flag on their, on their property or moving away from independent to, uh, one of our 19 brands.

Matthew Weihs (00:07:20) - Now, the news hot off the press is that Best Western now, uh, is moving from being an economy, uh, chain to one, which is luxury. Uh, it's obviously, firstly quite an easy statement to make, um, just off the cuff, but it's also quite a brave one in the sense that, you know, you've been predominantly known as, uh, a sort of, um, economy, um, chain. Anyway, so what's happened there? Um, and how do you do it? What, what's, how do you get to this place and why, why, I suppose would you do it?

Wytze Van Den Berg (00:08:02) - Yeah, so, um, why would we do it is of course, when we acquired Will Hotels and we have the ambition to have a bigger footprint in the upper upscale, in the luxury market, the, the name Best Western was not helping to, that we are very proud of our name. It's, well, we well known in the mid-skill and upper mid-skill, but not in the luxury, uh, uh, in the luxury place. So that is one of the reasons why we have changed our parent company name into B w h hotels to make sure that it's not only best Western hotels, right? We have economy hotels, we have Midscale and, and, and as said earlier, upper upscale in luxury, um, but, but only changing a name that won't do the trick. When we acquired World Hotels, um, we also acquired a team of very talented people who have been playing in the upper upscale and luxury segment for over 50 years.

Wytze Van Den Berg (00:08:55) - So the past three years, um, mainly during Covid, we have used the time to integrate the World's Hotels team and the B w H team into the B w H hotels team, which means that different than in the, uh, in the days prior to the acquisition within our corporate Salesforce, we now have corporate salespeople and leash salespeople who have been working in the upper upscale, uh, markets and the luxury markets for years. We have added, um, marketing communication people who had a background in, in that, um, uh, in that landscape as well. Um, so it is also kind of a 360 where you see all the existing resources, what, what you have and what do you need to add to, to be, uh, a significant, um, in, in that market. One of the most concrete examples is that last year, um, we did the I otm in conhi, the, the luxury trade market, um, something best question would never have done before. Um, but having those 200 plus hotels in the opera upscale in luxury, now it makes sense for us to be there, um, with the right people, meeting the right clients. Uh, if, if that answers your question,

Matthew Weihs (00:10:09) - Absolutely. But would we, will we be saying Best Western and World Hotels in the future, or are we saying B W H from now on? Is that the, is that the point here that Best Western has that legacy? So does it go, uh, to, to create that new focus?

Wytze Van Den Berg (00:10:27) - No, no, no, no. We'll stick with all the different names, especially when it comes to consumer marketing. Um, when it comes to, um, corporate sales, those people, you know, the big corporations, the Big Five, uh, fortune 500 companies, they wanna buy all the different levels we have on, on, on the shelf. So going b2b, um, we will reach out to them as B w h hotels, um, when it is consumer want to stay in a mid-scale product or in a luxury product, that's where we retain our best Western brand, world Hotels brand and all the different brands. It's, it's, if, if you would look to competitors, you know, uh, you know, I h g, they still have Holiday Inn, they have Crown Plaza, they have Kimpton. Accor is a parent company, but they will go out to the public with, with Sofitel and Novotel and, and, and ivus. So that is our strategy. We're we're not going to rename all best Western hotels because we know it's a very strong brand with a very high awareness. And the same goes for sure stay in and, and World Hotels. So, uh, b2b, um, it's b w h hotels or when it comes to the end consumer, we'll stick to our, uh, well-known brand names.

Matthew Weihs (00:11:38) - So it also seems that the organization is going through a, a, a very fast transformation in, in some ways, uh, with the new leadership driving that. What, what, in your opinion, uh, why is that, uh, needed, um, uh, in, in the current, current world, um, competitiveness?

Wytze Van Den Berg (00:12:01) - Well, well, you said competitive, um, and that is one of the main important things, um, in, in, in, in the world today. Size does matter. I mean, if we go out to, um, on companies like OTAs, if we go out to companies like the traditional travel management companies or consortia, of course, size does matter because you have a bigger purchasing, uh, for you. Um, but also clients are clients and end customers are traveling more across all the different, uh, uh, verticals of, of, of hotel business. So, um, they, they might earn their points from the loyalty program because they're on a business trip for a couple of days, and they might wanna burn those points in a very exotic destination with a spouse or, you know, having a luxury trip to Paris for a few days. So in order to keep do and customers loyal to our brand, we need to be able to offer that, that, that, uh, whole spectrum to them. So it, it's basically, um, being gross, does size does matter when you buy a purchase, when you wanna negotiate our customer, corporates, uh, are requesting it. Um, but also the end consumer wants to be loyal, um, and wants to have stays in all different, uh, layers of, uh, perfect.

Matthew Weihs (00:13:28) - So I'm getting excited, as you can see with the shirt going to, uh, AIF in a few weeks, uh, where we shall meet for the first time. So I'm really delighted that we'll have that chance. But you'll be presenting on the topic of cutting costs, uh, within the industry and, uh, an open discussion about it. So there's obviously a lot around this, but how important an issue is this now for, for the owners? Um, especially obviously post covid, everyone looks at things that way, and what areas do you see as quick wins for owners?

Wytze Van Den Berg (00:14:05) - Um, of course, it all depends on the situation, right? We at, at, at our company, um, if you would offset our fees or compared our fees with many of our, uh, international, uh, competitors, we have always been more competitive that that's how our, our, uh, company is set up. We have, we don't have external shareholders, we're not a listed company, so we really wanna, uh, uh, the money we make, we invest in driving more business. So flecking from GR brand to another could be an option. Um, but of course that is a significant, uh, that's a significant change. What everybody sees around the globe is that prices are increasing and raising tremendously. It is labor cost, um, it's energy cost, it's construction costs. So where we are working with our franchisees in our hotels, there is to see collectively can we find another way of sourcing, um, uh, materials for construction, but also, uh, uh, purchasing on a, on a different matter.

Wytze Van Den Berg (00:15:11) - Um, distribution costs are absolutely one of the things where a hotel brand is able to, um, lower cost and be more economic. Um, I mean, of course we need to earn money at the end of the day as well, but if we can make our own technology on the backside, but nobody sees, but what is super important to deliver reservations and, and, and be there where reservations are made, if we can make that more economic, we can have lower margins, which will put for, uh, put through to our, to our hotels. So it's basically on a couple of angles, it is the size or, or sorry, the, um, uh, the price of the, of the membership. It is helping hotels and groups of hotels with operational costs like, you know, uh, um, co combined buying power, uh, and third, um, the distribution costs we all face, uh, making that more, um, economic through, uh, investment, uh, investing in technology.

Matthew Weihs (00:16:12) - Perfect. And, um, I'll leave it there for now because obviously, uh, we don't wanna give too much away for those that are coming over, uh, to Nairobi and Visa, thanks so much for joining us today. And, uh, again, i, I really look forward to seeing you in a few weeks, uh, in Kenya.

Wytze Van Den Berg (00:16:29) - Looking forward to that. And, um, yeah, I'll be there to answer every anybody's questions. So, uh, thanks for the time at you. Thank you so much.