What’s the deal with boutique hotels?
What’s the deal with boutique hotels?
21 JUNE 2017 12:16 PM

Some might say that boutique hotels are dead, and others will argue that the business is very much alive. Here’s why I think it’s the latter. 

“Boutique hotels are dead!”

“Long live boutique hotels!”

I hear both proclamations all the time. So, which is it?

In today’s ever-changing landscape of hotels, we must recall the origin of “boutique” properties, and acknowledge the changes that have been made for the new paradigm of what the term represents today.

The start
Originally, a boutique property was bespoke and unique, with highly personalized service. These accommodation jewels were set in wonderful locations ranging from coastal towns, villages and islands, to fashionable urban locations and vineyards. People delighted in the sense of place, culture and highly personalized service, and felt as if they were the only guests. They were pampered as all their needs, wants and expectations were met, and exceeded. The food, wine, and handcrafted cocktails were incredible. And delicious innovations such as farm-to-table and locally sourced products were paramount.

Successful boutique properties appealed to all five senses, offering much more than simply a place to stay. They offered experiences that stayed with guests long after they had checked out.

The boutique concept gained significant traction when soft brands such as Small Luxury Hotels and Relais & Châteaux grew in numbers with owners of boutique properties. These soft brands represented a collection of quality hotels ranging in size from 10 rooms to usually a max of 100. Each property had a distinctive individuality and character and was not part of a major chain. The soft brands spread the good word about their boutique accommodations and offered greater distribution to the world’s discerning travelers.

Growth in the trend
Boutique grew in popularity. Suddenly, hotels with large room counts, generic locations and middling quality and service offerings began flying boutique flags. While SLH and Relais grew its numbers by maintaining strict guidelines and adherence to the high standards required for membership, they were now challenged with remaining ‘boutique’ as the name became more commonplace.

International brands, especially in the franchise world, got on the bandwagon and tapped new revenue streams by offering global distribution platforms with relaxed boutique brand standards. Hotels that were stylish, hip and trendy, and somewhat sophisticated, were labelled boutique. Today, Marriott’s Autograph Collection and Tribute Portfolio (formerly owned by Starwood) compete against Hilton’s Curio and Tapestry Collection and Hyatt Unbound.

With the glut of competition, early boutique properties might argue that true boutique is indeed dead. It’s not. It’s simply less-defined and vaguer.

How it transformed today
Today, room count is less prescriptive. Hotels with 150 to 400 rooms are called boutique. And The Delano in Vegas brands itself boutique with 1,000-plus rooms! This explosion of properties in the category puts pressure on original boutique hotels to maintain their high standards of accommodations and services as costs continually keep creeping up––all while achieving a strong average daily rate against the competitive set. Way back when, they didn’t have to deal with additional revenue management and yielding costs.

That kind of stress demands handcrafted cocktails and a relaxing spa treatment … or 12!
So, is it better for a boutique property to go branded or unbranded? Originally, all boutiques were independent, charged with creating their own specific brands. Then, they became soft-branded with SLH and other companies.

Both concepts work today, depending on the location, environment and building. We see boutique becoming the standard-bearer for adaptive reuse in churches, prisons, monasteries, castles, bank buildings with old vaults and myriad other uniquely positioned historic buildings ripe for engaging guests and immersing them in unique environments.

Boutique is hardly dead–– the term simply means more today than when it emerged in the ‘80s. If you buy a unique building and want to create a boutique hotel, you have many options, ranging from unbranded to branded and everything in between. Because technology has empowered people, guests don’t fear unbranded properties anymore. And guests seeking the unique experiences of boutique hotels are savvier than ever; social media and online travel agencies have made it easier for them to research, review and purchase with confidence.

But if you like the safety and security of an international brand, the big players will assist you with a brand to fit your needs.

Today, boutique hotels are morphing, multiplying and evolving. Of course, this presents the dangers of boutiques becoming commoditized and generic.

If you’re considering a boutique hotel purchase, remember there are many variables for success¬––character, style, sophistication, a guest-first service culture, delivery of personalized guest experiences and out-of-this-world gastronomy are all prerequisites.

Executed properly, these factors will help you stay both popular and profitable! Executed superbly, guests will beat a path to your door year-round.

If you’re serious about being boutique, truly boutique, you must strive to deliver a singular experience that guests will treasure.

Let me conclude with a quote by Mark Twain that reminds me of the health of today’s boutique hotels: “The reports of my death have been greatly exaggerated.”

Viva la boutique!

Euan McGlashan is co-founder and managing partner of Valor Hospitality Partners, a hotel development and management company based in Atlanta and London that owns and operates properties in the U.S., Europe, and Africa, with an additional 10 sites in various stages of negotiation, development, or construction. Additionally, a related company—PMR Hospitality Partners based in Cape Town—operates several hotels and resorts in Africa.

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