Midscale is quickly becoming the segment to watch as multibrand companies launch more and more midscale product into the market to meet developers’ appetites for cost-effective properties and to attract the growing, travel-hungry middle class. The upper-midscale segment in particular is seeing an imbalance between supply growth, at 4.3 percent, and demand growth, at 4 percent, according to STR.
Nevertheless, the established players in this space operate from positions of power, with large footprints and knowledge of how to deliver superior experiences within the midscale price ranges. Leading the charge is Best Western Hotels & Resorts, whose midscale brands swept their segments for the second consecutive year.
Upper-Midscale
Best Western Plus earned top marks among upper-midscale brands for sales staff; partnership approach to negotiating rate and penalties; flexibility negotiating amenities; communication with travel buyers; data and reporting; and price/value relationship.
Parent company Best Western Hotels & Resorts has deployed its own programs for engaging with the corporate travel market, such as BW Business Advantage for small and midsize enterprises and its BW Groups RFP Tool. Yet, VP of worldwide sales Wendy Ferrill said the company continues to emphasize the individualistic approach it’s long used with corporate clients: “We really try to do a deep dive with each buyer to understand their goals and to talk about ours—really individualize that program in terms of what the offer is, how we market it to the travelers and how we get our hoteliers engaged.”
Best Western Plus also scored highest among upper-midscale companies for meeting facilities. The brand and its members have invested in recent years to ensure the facilities are freshly designed and up to date. Beyond that, though, the Best Western team has worked to communicate its meetings product to buyers. “It’s really communicating that we are engaged in that market because people did not realize previously that it was something that would be a sweet spot for us,” Ferrill said. “Meetings are getting smaller, not bigger. With that in mind, it’s become a perfect place for Best Western overall as a brand to step in and capture that market share and be able to provide a solution to planners.”
Holiday Inn scored highest for locations for business needs and healthy food and fitness options. Inter-Continental Hotels Group SVP of global marketing for mainstream brands Heather Balsley said supporting business traveler wellbeing has been a focus across IHG’s brands.
“Wellness is not just about healthy eating or a great gym; it’s really about a holistic experience,” she said. “How do we ensure that every hotel has an exceptional sleep experience, and how do we design our guest rooms to reinforce that need for our guests to stay rested and refreshed?” The brand’s renovation programs and prototypes for new construction have added space and higher-quality equipment to its fitness centers. Its dining program, too, is more consistent and balances indulgent options with healthier fare to help business travelers “stay on top of their game on the road,” Balsley said.
Holiday Inn is the largest full-service brand in the upper-midscale segment, with 1,243 properties in its portfolio as of June 30 and 279 in its pipeline. As the brand has grown in recent years, Balsley said, it’s optimized its locations, particularly across urban and suburban markets.
Hampton by Hilton received the highest scores for clean, attractive and well-maintained facilities; on-property service staff; safety and security standards; and brand consistency. Respondents noted Hampton’s status as an innovator. Global brand head Shruti Gandhi Buckley said, “We’re not afraid to try new things and adapt to the changing needs of travelers … as recently seen in its evolving lobby design with multifunctional spaces and the new prototype unveiled earlier this year.” The prototype features modern decor with flexible public meeting spaces and design signatures customizable to the local market. Most Hamptons under development have incorporated the design, Buckley said, and hundreds of existing hotels have undertaken renovations or soon will. As of June 30, Hampton had 2,163 properties in the U.S. and 218 elsewhere in the world.
From January to August, upper-midscale’s average daily rate rose 1.4 percent year over year to $118.85, according to STR. Occupancy decreased 0.2 percent to 73.2 percent.
Midscale
Best Western scored highest in areas relating to its sales team’s work with corporate travel managers, including a partnership approach to negotiating rate and penalties; flexibility in negotiating amenities; and data quality.
The brand also tied Wingate by Wyndham for the highest score for brand consistency. That’s an accomplishment, given that less than a decade ago, all Best Western Hotels & Resorts properties fell under that one brand. Bjorn Hanson, industry consultant and adjunct professor at the New York University School of Professional Studies Jonathan M. Tisch Center for Hospitality and Tourism, said brand fine-tuning, including sub-brands and new brands, has “put kind of a halo effect on the traditional core Best Western brand.” Greater clarity on the guest experience, he said, is resulting in higher guest satisfaction.
“We obviously don’t have a cookie-cutter product,” said Best Western chief marketing officer and SVP Dorothy Dowling. “We’ve always celebrated the experience in terms of people leaning into their local markets to create that flavor, but what we have invested enormously in is deconstructing the customer experience,” meaning touch points like breakfast, sleep, shower; areas important to business travelers and where hotels can deliver consistently.
Wingate by Wyndham came in second in BTN’s survey but remained the top midscale brand in J.D. Power’s 2018 North America Hotel Guest Satisfaction Index Study for the fourth consecutive year. In BTN’s survey, it scored highest for clean, attractive and well-maintained hotels; meeting facilities; on-property service staff; traveler wellness; and safety and security.
Brand operations VP Larry Hambro said it has evaluated its wellness offerings with an eye to road warriors who spend “dozens or hundreds of nights” in hotels each year. “We’re improving our free breakfast and items available for purchase in our marts, adding healthier foods, higher-quality items and dietary-specific options like gluten-free,” Hambro said. Men’s Fitness and Muscle & Fitness Hers magazines provide in-room and fitness center workout guides. Many Wingates also offer free access to local health clubs beyond the on-property fitness centers.
The brand plans to enable guests to interact with associates via text during their stays and to stream content from their mobile devices. “These offerings tie back to our brand promises, deliver modern hospitality and address how guests are traveling today,” Hambro said.
From January to August, upper-midscale ADR increased 2 percent year over year to $93.67 and occupancy increased 0.6 percent to 65.8 percent. Demand growth, at 1.6 percent, continues tooutpace 1 percent supply growth.