Who administers the Best Western Rewards program for Bw Premier Collection?
Bw_Premier_Collection Franchise · 2025 FDDAnswer from 2025 FDD Document
Best Western Rewards*®* frequent stay program ("BWR*®* program")
The Company administers the BWR program for the benefit of BWH and BWR program members. Under our BWR program, the Company has a performance obligation to provide or arrange for the provision of goods or services between BWR program members and BWH hotels in exchange for the redemption of points earned from past activities. Costs of operating the BWR program, including costs for marketing, promotion, and other member services, are charged to the BWH hotels through an assessment fee that is based on members' qualified expenditures. The assessment fees received from BWH hotels are deferred and recognized as program revenues in the Consolidated Statements of Revenues and Expenses as the loyalty points are redeemed and the related service, net of redemption expense, is provided. The amount of revenue the Company recognizes upon point redemption is impacted by the Company's estimate of the breakage for points that BWR members will never redeem. The Company estimates breakage based on historical experience and expectations of future BWR member behavior, including analyses performed by and input of third-party actuaries. All BWR program costs are recognized as incurred and are recorded in program cost of sales in the Consolidated Statements of Revenues and Expenses.
Program revenues in excess of redemption costs are used to fund the operational expenses of the BWR program.
Best Western Travel Card® (a card having no expiration date and no usage or non-usage fees) revenue is recognized when: (i) the Best Western Travel Card is redeemed, or (ii) the likelihood of the Best Western Travel Card being redeemed is remote (Best Western Travel Card breakage), and the Company determines that there is not a legal obligation to remit the unredeemed Best Western Travel Card balance to the relevant jurisdiction. The determination of the Best Western Travel Card breakage rate is based upon Company specific historical redemption patterns. Best Western Travel Card breakage is included in program revenues in the Consolidated Statements of Revenues and Expenses.
Source: Item 23 — Receipts (FDD pages 54–203)
What This Means (2025 FDD)
According to the 2025 Bw Premier Collection FDD, the Best Western Rewards (BWR) program is administered by 'the Company' for the benefit of both BWH (Best Western Hotels) and BWR program members. The company's responsibilities include providing or arranging goods or services between BWR program members and BWH hotels in exchange for points earned through the program.
Costs associated with operating the BWR program, such as marketing, promotion, and member services, are covered by assessment fees charged to BWH hotels. These fees are based on members' qualified expenditures. The assessment fees are initially deferred and then recognized as program revenues as loyalty points are redeemed and related services are provided, net of redemption expenses. The revenue recognized is affected by the company's estimate of points that will never be redeemed (breakage), which is determined using historical data, expectations of member behavior, and input from third-party actuaries.
Program revenues exceeding redemption costs are allocated to fund the operational expenses of the BWR program. This structure ensures that the rewards program is self-sustaining, with costs covered by participating hotels and revenues generated through member activity. As part of the agreement, Bw Premier Collection hotels receive BWR support from the company.