Paper to be presented at the EMNet-Conference on
“Economics and Management of Franchising Networks”
Vienna, Austria, June 26-28, 2003
www.univie.ac.at/EMNET
Affiliated Networks: The Case of Best Western Internationalisation
Ilan ALON
Crummer Graduate School of Business, Rollins College
1000 Holt Ave. – 2722, Winter Park, FL 32789-4499, USA
i_alon@yahoo.com
Gérard CLIQUET
CREREG UMR CNRS 6585
Institut de Gestion de Rennes (IGR-IAE), Université de Rennes 1
11, rue Jean Macé, CS 70803, 35708 RENNES Cedex 7, FRANCE
gerard.cliquet@univ-rennes1.fr
Rozenn PERRIGOT
CREREG UMR CNRS 6585
Institut de Gestion de Rennes (IGR-IAE), Université de Rennes 1
11, rue Jean Macé, CS 70803, 35708 RENNES Cedex 7, FRANCE
rozenn.perrigot@wanadoo.fr
Abstract
In the franchising literature, the hotel industry is often studied. Indeed, this sector is a perfect illustration of the
organisation in franchised networks, and this, all around the world with brands like Mercure, Ibis, Comfort Inn,
Courtyard, etc. The hotel industry is global, with a strong internationalisation of the chains. This topic of
internationalisation remains an important task for the network operators. They must try to adapt their chain to the
country they want to penetrate. This is not always easy … One system, not organised in franchise, is particularly
present everywhere without any uniformity in the concept. It is the case of Best Western (BW). This paper is
twofold. After having presented briefly the international tourism and the hotel sector, a particular focus is made on
BW. Its organisation neither in franchise nor in company arrangement, but in affiliation, seems interesting to be
studied in the internationalisation context.
Keywords
Hotel industry, affiliation, internationalisation.
1
I. Introduction
In the franchising literature, the hotel industry is often studied. Indeed, this sector is a
perfect illustration of the organisation in franchised networks, and this, all around the world with
brands like Mercure, Ibis, Comfort Inn, Courtyard, etc. The hotel industry is global, with a strong
internationalisation of the chains. This topic of internationalisation remains an important task for
the network operators. They must try to adapt their chain to the country they want to penetrate.
This is not always easy … One system, not organised in franchise, is particularly present
everywhere without any uniformity in the concept. It is the case of Best Western (BW). This
paper is twofold. After having presented briefly the international tourism and the hotel sector, a
particular focus is made on BW. Its organisation neither in franchise nor in company
arrangement, but in affiliation, seems interesting to be studied in the internationalisation context.
Section II. presents therefore the international tourism and hotel sector. Then, the
internationalisation of BW is exposed in details in section III. Conclusion with limitations of this
paper and tracks for future research are given in section IV.
II. International Tourism and Hotel Sector
In this first section, the international tourism and the hotel sector are presented to locate
the importance of hotel industry in the franchising activity.
A. International Tourism
The economic concept of tourism includes personal travel (for leisure and other purposes)
and business trips, international as well as domestic travel. Presently, the industry is growing
worldwide by about 3 percent annually. The average growth rates vary according to the regions.
2
The lowest ones deal with Europe: 2.3% and the Asia-Pacific: 1.4% in the aftermath of the Asian
crisis. The highest annual growth rates have recently been seen in South Asia (9.1%), the
Caribbean (6.8%) and Central and Eastern Europe (5.2%). However, the travel and tourism
industry’s share in the world’s GDP has been fairly constant because the largest tourism volumes
are still in the regions where growth is in line with economic growth in general (World Travel
and Tourism Council, 2001).
Border-crossing tourism has grown faster than tourism in general. International tourist
arrivals have grown at an average annual rate of 7% since 1950 and will grow at an average
annual rate of 4.5% over the next 20 years (World Travel and Tourism Council, 2001). However,
in recent years, the development of international tourism has been no quicker than the growth of
the world economy as a whole, i.e. about 3%. During the year 2000, almost 700 million tourists
crossed a border and spent over US$500 billion while abroad. Border-crossing tourism adds
about 25% to domestic tourism GDP worldwide, with certain regions depending more markedly
on international tourism than others. In the Caribbean, a fifth of GDP is produced for tourists,
directly or indirectly, by one out of every seven workers. Latin America and Africa have
increased their market shares recently, while that of Asia has declined but is recovering rapidly
(World Travel and Tourism Council, 2001).
The demand for tourism services is shifting qualitatively. Travel is increasingly becoming
part of the lifestyle of a substantial proportion of some nations’ populations, including the
wealthier in developing countries. Trips have become shorter but more frequent. New market
niches are being exploited, such as nature tourism, ecotourism and adventure tourism. Tourists
are becoming more knowledgeable and aware of issues such as the protection of the
3
environment. The spread of information technologies enables tourism providers to cater more
efficiently to more diversified consumers.
Globalised tourism has been strongly supported by the deregulation of air transport. In
developing countries, no less than 80% of international tourists arrive by air. Air fares are falling
drastically as a result of increased competition and the abolition of national monopolies. The
General Agreement on Trade in Services (GATS) has had an impact on the liberalisation of the
international tourism economy. Most countries have made tourism-related commitments under
GATS concerning issues such as commercial presence or access to technology. Table 1 shows
the hotel industry by global region in 1995 (International Labour Organization, 2002)
Africa
Caribbean
Central America
North America
South America
Northeast Asia
Southeast Asia
South Asia
Australasia
Middle East
European Economic Area
Rest of Europe
Total US$
Revenues
(billion)
6.3
7.92
1.2
62.13
9.84
23.73
12.84
3.08
6.6
9.24
87.49
17.4
Number
Of
Hotels
10,769
5,290
1,160
66,943
14,576
10,192
13,211
3,663
10,082
4,735
151,945
15,117
Number
of
Rooms
34,3347
155,253
41,221
3,738,977
487,787
719,480
453,657
159,417
229,319
162,178
4,242,193
600,370
Number
Of
Beds
675,960
300,097
83,862
6,725,390
1,005,972
1,470,857
898,212
223,519
567,346
326,131
8,108,983
1,153,939
Table 1: The hotel industry by global regions (International Labour Organization, 2002)
Economic blocs also promote the increase of tourism activities among their member
countries and support their development as global tourism destinations. In particular, the
European Union (EU) and the Association of South-East Asian Nations (ASEAN) are known for
4
having specific tourism promotion policies, whereas in the Caribbean, regionally coordinated
tourism is being developed.
The Internet is increasingly being used to market worldwide destinations, including by
associations of independent enterprises. Tourism is among the most important application
domains on the World Wide Web. It is estimated that up to half of all online transactions are
tourism-oriented, but these still represent only a tiny proportion of total travel business (as of yet
not more than 1 or 2%). However, this amount is increasing rapidly as Internet sales of travel
products reduce costs and present low entrance barriers in terms of financial investment and
know-how. E-commerce therefore clearly increases the opportunities for developing countries to
reap the benefits of their competitive advantage as tourism destinations.
B. Hotel Industry
Large hotel chains are constantly increasing their business through mergers, as well as
franchising and management contracts. The largest hotel chain, Cendant, operates 6,600 hotels
with a total of 500,000 rooms. The four next largest chains operate half as many hotels each, but
still offer between 300,000 and 460,000 rooms. The last five years have witnessed nine major
hotel merger and acquisition transactions involving a total of US$40 billion. Most large hotel
chains, however, own a majority of their hotels. Table 2 listed the bigger worldwide hotel
groups, by number of hotels.
5
Ranking
1
2
3
4
5
6
7
8
9
10
Hotel Groups
Cendant Corporation
Choice Hotels
Accor
Bass Hotels & Resorts
Mariott International
Hilton Corporation
La Société du Louvre
Starwood
Carlson Hospitality World
Compass Granada Plc.
Country Nb of Hotels Nb of Rooms
USA
6312
535295
USA
4981
400230
F
3374
372670
GB
2939
513669
USA
1997
396613
USA
1763
302381
F
965
69341
USA
716
219816
USA
651
119592
GB
453
63638
Table 2: The bigger worldwide hotel groups (Coach Omnium, Etude 2000)
Along these ten groups, many of them are multi-brand groups. It means that they own
several hotel chains with different brand names. For instance, the Accor group has several brand
names: Sofitel, Mercure, Novotel, Ibis, Etap Hotel and Formule 1.
III. The Internationalisation of Best Western
This section is divided into two parts. The first one exposes the company, its organisation
in affiliation and the services offered to the affiliated hotels. The second part presents its
internationalisation process and strategy.
A. Best Western company presentation
BW was founded in 1946 by M. K. Guertin, a California-based hotelier with 23 years of
experience in the lodging industry. The company began as an informal referral system among
member hotels. By 1963, BW was the largest chain in the industry, with 699 member hotels and
35,201 rooms.
USA Today ranked BW number four in their 1999 listing of “The Largest Hotel
Companies” (Lazich, 2001). Additionally, BW was ranked number two in another listing
6
produced by The European Hotel Industry and Travel Research Industry (Lazich, 2001). Both of
these listings were based on the number of hotel rooms operating under the chain.
BW International, Inc., is now the world’s largest hotel brand, with over 4,000
independently owned and operated hotels in more than 80 countries, about 2,100 of which are in
the United States (BW 2001 Annual Report, 2002).
In 2001, BW welcomed 111 new hotels in North America and 141 new hotels in the
other countries. Its global presence is important, as summarised in the table 3.
7
Argentina
Aruba
Australia
Austria
Bahrain
Bangladesh
Belgium
Belize
Bolivia
Brazil
Canada
Channel Islands
Chile
Columbia
Costa Rica
Cyprus
Czech Republic
Denmark
Dominican Republic
Ecuador
Egypt
England
Estonia
Finland
France
French Guiana
Germany
Grand Bahamas
Greece
Guatemala
Honduras
Hong Kong
Hungary
India
Indonesia
Ireland
Israel
Italy
Japan
Jordan
4
1
243
46
1
1
34
1
1
22
165
1
12
1
8
1
9
31
1
1
1
273
1
21
200
1
135
1
29
1
1
1
6
16
1
27
3
127
1
4
La Reunion
Latvia
Lebanon
Lithuania
Luxembourg
Malta
Mexico
Morocco
Netherlands
New Caledonia
New Zealand
Nicaragua
Norway
Oman
Pakistan
Peru
Philippines
Poland
Portugal
Puerto Rico
Republic of Korea
Romania
Russia
Scotland
Slovakia
Slovenia
South Africa
Spain
Sweden
Switzerland
Tunisia
Turkey
United Arab Emirates
United States
Uruguay
Venezuela
Vietnam
Virgin Islands
Wales
Yugoslavia
Table 3: BW Hotels Worldwide (BW 2001 Annual Report, 2002)
8
1
1
1
2
1
1
48
1
41
1
67
1
25
2
1
7
1
4
20
1
3
4
3
48
2
2
1
30
55
73
1
19
1
2,117
4
5
1
3
19
1
The primary international market is Europe with 1293 hotels (BW 2001 Annual Report,
2002). The percentage of sales coming from overseas is 44% in 2001 and the respective revenue
from basic member services of 2001 is US$ 129,281,970. Detailed data regarding the percentage
of sales are found in table 2.
2001
2000
1999
Revenues
Basic Member Services
129,281,970.00 127,978,202.00 111,835,776.00
Membership and Affiliations:
Properties:
North America
International
Total:
2,289
1,764
4,053
Proportion of Revenue based
on nb of properties
North America
56%
International
44%
Revenues from Basic Member Services:
North America
73,014,169.59
International
56,267,800.41
2,272
1,822
4,094
2,308
1,704
4,012
55%
45%
58%
42%
71,022,587.92
56,955,614.08
64,336,234.05
47,499,541.95
Table 3: The percentage of sales coming from overseas from 1999 to 2001 (BW, Hoovers, 2002)
B. Best western organisation: the affiliation
BW is organised as a not-for-profit membership association, with most of its sales
coming from monthly fees and annual dues. The hotel company’s purpose is to provide revenue
generating opportunities and to leverage purchasing power to benefit its members (BW 2001
Annual Report, 2002). The company is boosting advertising and adding upscale accommodations
in non-US markets to increase its competitiveness (BW, Hoovers, 2002). With their strong global
presence and consumer brand recognition, they generate added exposure for a property that
wants to become a member. In addition, members look to one another for referral business.
9
BW strives to provide the lowest fees along any major hotel chain in their industry
segment. Affiliates must be renewed annually, so there are no long term obligations. This feature
protects BW from having to honor a long lasting contract with a hotel that may hurt their brand’s
image. Members, as well, may become unaffiliated with BW at any time or even transfer their
membership for a minimal fee if the property is in good standing. Offering many benefits, BW
retention rate is an impressive 99%.
C. Best Western services
BW provides a wide range of comprehensive member services which include the
following:
-
domestic and international reservation systems,
-
worldwide marketing,
-
sales and advertising,
-
brand identity,
-
facilities design,
-
quality assurance,
-
customer service,
-
education and training services.
All of these services, funded primarily through fees and dues paid by the members are
designed to increase the profitability of the individual member properties. The company does
10
make other services available to its members on a separate fee basis (BW 2001 Annual Report,
2002). These include:
-
central purchasing,
-
special marketing opportunities,
-
telecommunications networking programs.
The services exposed above have the following particular features.
1) BW's Travelers' Guides and Road Atlases, which contain color photos, maps,
and information on all BW hotels. More than 1.5 million guides are distributed
annually in the following countries: the United States, Canada, Mexico, the
Caribbean, Central America and South America. Other guides published
worldwide include the 2002 editions of BW International Atlas & Hotel Guide Europe, Mediterranean, Africa and Asia, Australia, New Zealand and the Pacific
Islands Directory. These complimentary guides feature in-depth property listings
and detailed road maps. They also illustrate facilities and amenities available at
each location.
2) www.bestwestern.com showcases all 4000-plus hotels with their own property
pages featuring marketing, amenities and local attraction information with color
photos, maps and online booking functionality. The Website, including a profile
of properties, corporate information and online reservations, logged more than
182 million hits in 2000, resulting in $97 million in gross room night revenue.
BW launched the hotel industry most extensive and complete listing of properties
11
on the Internet in 1995, making it the largest hotel brand represented on the global
computer network. The Website has previously received accolades from ZDNet
and USA Today for its features and easy accessibility. In 2001, BW also entered
the M-commerce arena by launching a new application for wireless users.
3) The Worldwide Reservations system services more than 50 million guests every
year with offices in the United States, Italy, Ireland and Australia. In 2000, the
reservations centers generated $563 million in sales and 6.6 million room nights.
BW International Inc. was one of the first lodging brands to provide booking
capabilities to Internet users around the world when the hospitality giant added
this service on Dec. 19, 1995. Today, more than 90,000 bookings are made via
BW’s World Wide Web address which saw last year an increase in bookings
accounting for 18% of the company's total bookings.
4) Representation and listings in all major global distribution systems, including
Amadeus, Sabre, Galileo and Worldspan resulted in $461 million in sales in 2000.
5) The Best Requests program assures guests that they will receive the same key
amenities and services at any BW in the world (program effective in October,
2001 in the U.S.A. and Canada; in January, 2002 outside the U.S.A. and Canada).
6) Gold Crown Club International is the highly popular global frequent traveler's
program currently boasting more than 3 million members worldwide and growing
(BW Website, 2002).
12
But, what are or where are the differences between a franchised hotel chain and an
affiliated one? In fact, a franchised chain operator offer to his franchisee the same services and
programs than BW as far as directory, sell offices abroad, presence at specialised shows,
frequent card, reservation centers, advertisement and marketing operations, central purchasing,
staff training, quality control, etc. (Robinet and Adam, 2003) are concerned.
It is noticed that finally the differences between a franchised system and an affiliated one,
such as BW, are finally not in the services offered by the operator. The differences are twofold.
First, the contract of affiliation is more flexible in the sense that it must be renewed each year,
and not every 10 years like in most of the franchised hotel networks, and also the fees paid by the
affiliated hotels are less important. Second, and perhaps the more important aspect which can
facilitate the internationalisation process, there is no need for concept homogeneity. In the case
of franchising, this respect of homogeneity can sometimes curb the internationalisation. Indeed,
some concepts can not be reproduced without any change in foreign countries, some must be
adapted to foreign cultures. The particular case of BW internationalisation is consequently
interesting to be studied. Indeed, although BW has been criticised for focusing on internal issues
and conflicts to the detriment of its position in the marketplace, the company continues to enjoy
international expansion (BW, Hoovers, 2002). Since the tourism and business travel are
uniformly global, BW enjoys the competitive strength of providing primarily a non-culturespecific product that is relatively easy to internationalise. The company’s business model of
leasing the rights to its name to members allows local owners to make cultural adjustments in
décor, food and beverage offerings, further simplifying the internationalisation process.
13
D. Sequences of Best Western’s international expansion
After its beginning in the Western U.S.A, BW took the first step toward global
expansion in 1962 when Canadian hotel owners joined the system. This seems almost natural,
assuming that such factors as a common language, similar economic background conditions and
relatively open borders play a major part in such decisions.
The company's expansion into Europe occurred mostly during the mid-to-late 1960's, a
period during which relations between the U.S.A. and most European countries were very strong.
Indeed, Europe had become a major destination for American tourists, the U.S. dollar was
extremely strong, U.S. companies were actively seeking involvement in Europe, and Europeans
in general welcomed interaction with Americans. BW entered the Caribbean countries during the
same time frame in quite the same conditions.
The early-to-mid 1970's were, for most companies and individuals, a much more difficult
period. The energy/oil crisis of 1972 and the subsequent economic recession period had a
staggering effect on the rate of business and economic growth worldwide. This perhaps explains
why no significant international expansion occurred for BW until 1976, when they entered
Mexico, Australia and New Zealand. During the late 1970's, the company further expanded its
member structure in Europe, above all England, Scotland and Wales.
In the 1980’s, BW focused its expansion on Northern Europe and Scandinavia, opening
properties in France, Denmark, Finland and Sweden. Between 1980 and 1986, the company also
paid attention mostly on improving its existing operations and expanding its presence within
North America. In 1987, the company entered the remaining Scandinavian country (Norway) as
well as Israel and Portugal.
14
The fall of the Berlin Wall in 1989 and the collapse of the USSR in 1991 resulted in new
opportunity for BW to grow into the countries of Eastern Europe and the newly independent
Soviet states. Russia and Lithuania were targeted in 1993.
In the closing years of the millennium, following the Asian economic crisis, the company
realised that tremendous potential for growth could be found in the areas of Asia and the Pacific
Rim. The focus of international growth consequently shifted to the Far East, where BW added
member properties in China and Vietnam. After 2000, the company continues its expansion in
these growing regions, adding properties in Hong Kong, New Caledonia, and South Korea. Table
3
presents
a
detailed
and
dated
summary
15
of
BW
international
expansion.
1962 BW had the only hospitality reservation service covering the entire U.S.A. and Canada.
1962 There were 670 BW hotels in 25 western states and Canada. All the properties offered free
reservation service for their customers.
1966 A major expansion of BW services was announced. Changes included: 1) Establishing a
new reservation center offering one-step, toll-free service for business commuters, travel
agents and vacationers through arrangements with American Express, 2) Expanding into
Europe, the Caribbean and the Pacific, 3) Increasing membership standards, 4) Opening
sales offices in Washington, Montreal, Phoenix and Seattle, 5) Establishing tie-ins with
airlines and representatives from other transportation industry members, 6) Investigating
stronger infiltration of tour and business meeting markets.
1976 An agreement was signed with a group of properties in Mexico further expanding BW's
international representation.
1976 BW began its push for foreign expansion. Affiliation agreements were signed with 411
properties in Australia and New Zealand.
1978 BW experienced further international expansion into the European market with the
addition of BW Interchange Hotels, a network of 108 hotels and country inns in England,
Scotland and Wales. Shortly after this move, BW signed an affiliation agreement with
Ireland's Irish Welcome Hotels.
1980 Agreements were signed bringing 19 properties in Denmark, 120 properties in France, 19
properties in Finland, 23 properties in Spain, 19 properties in Sweden and 93 properties in
Switzerland into the chain. By this time, BW's 903 international affiliates comprised 34%
of the chain's total membership.
1987 BW's worldwide expansion continued with the addition of Israel, Norway and Portugal to
its affiliate membership.
1992 BW announced plans to develop consolidated reservations offices (CROs) in Europe. The
first, in Frankfurt, opened in Jan. 1992. A month later, a similar center opened in Milan.
Another, located in Dublin, was scheduled to begin operation in 1994.
1993 Worldwide growth continued with new affiliate members in Russia, Lithuania and Japan.
1996 BW opens door to new hotels in China and Vietnam. BW named official hotel of Six Flags
theme parks. BW Launches call for vintage postcard memorabilia.
2002 Recently, BW has made first-time hotel ventures into New Caledonia, Hong Kong, South
Korea and Yugoslavia.
Table 4: Summary of international expansion of BW Hotels (BW Website, 2002)
16
E. Best Western’s international strategy
BW’s current international business strategy includes aggressive expansion initiatives for
the 2002 Fiscal Year. They plan to target “key international gateways” and 35 North American
cities that are currently underserved by BW. Ultimately, BW plans to add more than 300 hotels
around the globe. Essentially, their expansion strategy is now threefold.
1) International (outside North America)
Moving forward on their international expansion plans will mainly focus on Asia, South
America, South Pacific, and Western Europe. Specifically, BW is targeting Australia for 30 new
hotels, France for 20, Great Britain for 15, Asia for 14, New Zealand for 10, and Germany for 10
(BW Website, Press Release, 2002). In South America, BW plans for 22 new hotels. BW is
establishing its presence in the region by opening offices in Sao Paulo and Buenos Aires. They
are also establishing sales offices in Argentina, Brazil, and Chile and have plans to open offices
in Peru and Venezuela in early 2003. In preparation for this aggressive expansion, BW placed
Spanish and Portuguese speaking agents last December to field reservations and customer
service calls (BW Website, Press Release, 2002). The goal is to have 189 new international
locations in all.
2) North America
In North America, BW plans to sign 155 new BW hotels. Approximately 30% will be
newly constructed hotels with the remaining 70% as conversions. This made an increase in the
number of North American additions by 20% over 2001.
3) The “Premier Hotel” designations
17
Additionally, BW has launched a strategy this year that will give distinction to their
higher end hotels in Europe, called “BW Premier Hotels”. There have been many applications
for consideration as a Premier Hotel in Austria, Belgium, the Czech Republic, France, Germany,
Greece, Hungary, Italy, Slovenia, Spain, Sweden and Switzerland. This new designation will
help with their expansion of four-star designated hotels that provide a greater level of style and
amenities (BW Website, Press Release, 2002).
F. International Evolution Perspectives
BW has always placed a heavy emphasis on its international business practices. BW’s
International Board recently conducted a meeting in San Diego adopting the association’s firstever global business plan. This plan emphasises key initiatives in quality assurance, e-commerce
and loyalty marketing. The heart of the new plan contains BW’s vision for the future: “to be the
preferred mid-scale hotel chain”.
BW will leverage its dominance with affiliates in 82 countries all around the world. The
new plan will highlight the strong brand recognition achieved over many years and will leverage
their position in the marketplace. New programs have been created to build momentum and to
solidify BW’s position as the largest hotel chain in the world. “Our global organisation has taken
some very important steps together recently like establishing our BestRequests™ global product
standard” stated Jim Evan, chairman of the International Board and president and CEO of BW
International (Business Wire, 2001). The BestRequests™ program was rolled out to all BW
hotels worldwide in January 2002. Much of the program success centers on providing the best
services available in a consistent manner across the globe. BW recently entered into a joint
marketing agreement with AAA. BW will be marketed as the preferred hotel to AAA’s 44
18
million membership. This agreement will enhance the BW reputation in the United States,
Canada, and the Caribbean. “More than 80% of BW hotels are AAA inspected and approved
which makes our association with AAA a very strategic marketing partnership” said Bob Gilbert,
vice president of Worldwide Sales and Marketing for BW (Business Wire, 2001).
BW has made extensive investments in software applications and solutions to enhance its
offerings to its customers. BW recently announced to purchase a number of products from the
KANA iCare™ suite. These eCRM solutions enable guests to make reservations in real-time on
the Web. Every department within BW will begin accessing reservation information using
KANA software. These solutions will provide superior customer service at reduced costs.
“Standardising on the KANA iCARE™ suite makes perfect sense for a company like BW that
needs to engage international customers across multiple touch points” said Bud Michael,
executive vice president of products and marketing of KANA (Business Wire, 2002).
BW continues to grow its global presence in the hotel industry. For the fourth quarter
ended November 30, 2001, they added 24 new hotels in North America and 34 new international
hotels. “BW continues to be a very attractive brand for hotel developers because we maintain
lower affiliation costs and offer equivalent, if not superior services to that of our franchised
competition” said Mark Williams, vice president of North American development. During 2001
fiscal year, 141 international hotels were brought into the BW association. France opened 20,
Great Britain opened 16, Australia opened 13, and both Germany and Italy opened 11.
BW’s current international expansion initiatives seem to be very well planned.
Streamlining their processes (with the new software) and standards will likely have a favorable
impact of their brand image and awareness. Since their brand is the main product leased by
19
affiliation, membership should continue to increase. In conclusion, we anticipate a successful
effort in further international expansion by BW International.
IV. Conclusion
This informative paper illustrates the case of affiliation which is under-studied in the
literature. In the internationalisation context, we often talk about franchised, company-owned or
plural form networks. The frequent question is to choose the best managerial form for
penetrating a new market. This paper, even if it is purely descriptive, is informative. Indeed, the
case of BW presents another successful expansion mode: the affiliation. Each hotel owner is
associated to the decisions of the BW firm (Franchise Magazine, 2003). BW internationalisation
is already promising. And the fact that each hotel keeps its specificity, and above all its
architectural specificity, is an added-value (Franchise Magazine, 2003). Various research tracks
can be envisaged. Some deal with the internationalisation process. Quantitative analyses could
concern franchise hotel chains versus affiliated ones. Compare their performance could be also
interesting. The reasons to become franchisee or affiliate could be also pointed out. What are the
advantages and drawbacks of these two perspectives? The similarities and disparities franchise
networks/affiliated networks could be an interesting topic. The affiliation as the network
management choice could be also studied in other industries.
20
References
Best Western. Hoover’s Website. http://www.hoovers.com/co/capsule/5/0,2163,42845,00.html.
Best Western Website. www.bestwestern.com.
Best Western Website. Best Western 2001 Annual Report. http://www.bestwestern.com/aboutus/2001.pdf.
Best Western Website. Best Western Expands
http://www.bestwestern.com/newsroom/index.asp.
in
Best Western Website. BW Premier Designation
http://www.bestwestern.com/newsroom/index.asp.
Launches
Best Western Website. BW to Sign 300
http://www.bestwestern.com/newsroom/index.asp.
New
South
Hotels
America.
in
in
5/27/2002.
Press
Release.
Europe.
3/18/2002.
Press
Release.
2002.
2/21/2002.
Press
Release
Business Wire, Inc 2001. AAA Names Best Western as a Show Your Card & Save Partner, Business Editors/Travel
Writers. November 7, 2001.
Business Wire, Inc. 2001. Best Western’s International Board Approves Inaugural Global Business Plan, Business
Editors/Travel Writers. November 15, 2001.
Business Wire, Inc. 2002. Best Western Standardizes on the KANA iCARE Suite to Provide Superior Customer
Service and Reduce Costs. February 27, 2002.
Coach Omnium, 2000, 2tude de l’hôtellerie.
Franchise Magazine 2003, Best Western fonce dans les étoiles, Avril-Mai 2003, 52.
International Labour Organization Website. www.ilo.org.
Lazich, Robert. 2001. World Market Share Reporter 2001-2002 The Gale Group.
Robinet J-C. and Adam 2003, Management Hôtelier Théorie et Pratique, De Boeck.
World Travel and Tourism Council. WTTC 2001 Tourism Satellite Accounts: Regional Reports.
http://www.wttc.org/ecres/regional%202002.asp.
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