What was the value of the liability related to the loyalty program for Bw Premier Collection in 2023?

According to the 2025 FDD, Bw Premier Collection's liability related to its loyalty program, also known as the Best Western Rewards (BWR) program, was $292,438,000 in 2023. This figure represents the company's obligation to provide goods or services to BWR program members in exchange for the redemption of points earned from past activities. The loyalty program is a significant aspect of Bw Premier Collection's operations, as it incentivizes customers to choose their hotels and encourages repeat business. The costs associated with operating the BWR program, including marketing, promotion, and other member services, are charged to the BWH hotels through an assessment fee based on members' qualified expenditures. These fees are deferred and recognized as program revenues as loyalty points are redeemed.

The amount of revenue Bw Premier Collection recognizes upon point redemption is influenced by the company's estimate of breakage, which refers to points that BWR members are unlikely to redeem. This estimate is based on historical data, expectations of future member behavior, and analyses from third-party actuaries. All BWR program costs are recognized as incurred. Program revenues that exceed redemption costs are allocated to fund the operational expenses of the BWR program.

For a prospective franchisee, understanding the financial mechanics of the BWR program is crucial. The liability figure indicates the scale of the program and its importance to Bw Premier Collection's overall financial health. Franchisees should be aware of the assessment fees charged to hotels for the program and how these fees impact their revenue. Additionally, understanding the breakage estimates and how they affect revenue recognition can provide insights into the program's profitability and sustainability. This information is vital for making informed decisions about the financial aspects of operating a Bw Premier Collection franchise.