Service, storytelling, authenticity and selectivity allow lifestyle and independent boutique hotels to stand out from the crowd and command higher rates.
ATLANTA—Ask a room full of 50 people to define “boutique hotel” and you’ll get 50 different answers.
But certain characteristics rise to the top of the list when experts in the boutique and lifestyle brand space get together to talk about what makes their hotels stand apart from the pack.
Speakers shared the latest thinking on what differentiates boutique and lifestyle hotels from the ever-growing world of branded hotels during a panel discussion at the recent Hunter Hotel Investment Conference.
To set the stage, moderator Kim Bardoul, partner at The Highland Group, shared some U.S. performance data that showed how independent boutique, soft brand and lifestyle hotels stack up against their more traditional branded counterparts. The Highland Group produces an annual Boutique Hotel Report that tracks performance of independent, lifestyle and soft-branded hotels in the U.S.
Collectively, Highland Group data showed that lifestyle hotels, soft-branded hotels and independent boutique hotels generated more than $15 billion in revenue in 2016 in the U.S. Compound average supply growth for those three segments has risen since 2016, and each notch annual revenue per available room that exceeds U.S. averages for industrywide performance.
To support the statistics, speakers shared four major traits that contribute to the success of these nontraditional hotel offerings.
“It always starts with the service, regardless of what the hotel looks like,” said Jason Moskal, VP of lifestyle brands for InterContinental Hotels Group in the Americas. IHG counts Hotel Indigo, Even Hotels and Kimpton Hotels & Restaurants as part of its boutique brand offerings. “It transcends into how you create culture at every touchpoint in the hotel.”
Paul Ruffino, co-founder and COO of the Delaware-based Hospitality Management Services, said service was the cornerstone from which the modern boutique hotel movement was built, and it’s something current hoteliers must not forget.
“When boutique started, we didn’t have the internet or (online travel agencies); we worked with retail travel agents, and as a small, independent hotel at the time, we were butting heads with the people who had money to spend on big booths (at travel shows) and gifts for the agents,” he said. “So we created a niche and that became boutique. It’s that little extra bit of service we offer guests.
“Attention is paid to detail at independent boutiques, and that’s what’s been lost for years in the flag business. Don’t forget that the (former) Thompson in Beverly Hills was a Best Western, and we turned it into a Thompson without even knocking down a wall.”
The stories these unique hotels tell carry weight as well, speakers said. For Mitch Patel, president and CEO of Vision Hospitality Group, the story is what sets apart his company’s first independent hotel—which is under development in Chattanooga, Tennessee—from the rest of its branded portfolio.
“We could have developed another select-service hotel in Chattanooga but we wanted to do something different,” he said about The Edwin, the company’s first independent. “With a boutique hotel you’re writing a story, and what better way to write your first story than with a community you believe in so much?”
With storytelling comes authenticity and differentiation—and often a better return.
“In this boutique, lifestyle, unbranded realm, our job is to give someone something different, that they will pay for,” said Richard Millard, chairman and CEO of Trust Hospitality. “That’s why we do what we do. There are things we can deliver that guests can’t get anywhere else. We’re trying to get away from being a commodity in the hotel business.”
Part of that story can be told through out-of-the-box design, a hallmark many in this segment have embraced, yet speakers were quick to point out that slick design isn’t all it takes to distinguish a boutique or lifestyle hotel from its branded peers.
“Design is critically important, but it’s behind the service aspect,” Moskal said. “It’s really a combination of design and authenticity that has to come together. Consumers aren’t looking for that vanilla box and design is a part of that.”
To achieve that sort of authenticity guests expect from a nontraditional hotel stay, speakers said it helps to be natural and organic when it comes to guest service and interaction.
“As we researched (The Edwin), we went to a lot of independent boutique hotels,” Patel said. “There were hotels that clearly were trying to hit all these buttons on the latest design trends or what have you, but it was so scripted.”
He said a visit to an Ace Hotel really drove home the idea of unscripted authenticity.
“The Ace was so unscripted,” Patel said. “It’s like the difference between someone who tries really hard to be cool and tries to dress the part, and someone who just is cool. It’s the difference I see in well-executed independent hotels, and in ones that are just trying to play in that space. The consumer definitely can see that.”
Not adhering to a set script also means being open to change in service offerings, design and amenities, speakers said.
“As your markets change, your hotel can change, too,” Ruffino said. “Never have a fear of changing your property.
Millard closed by reminding the audience that for independent boutique and lifestyle hotels to stay truly authentic and relevant, they won’t always appeal to every customer—and that’s OK.
He recalled an independent boutique hotel in Milwaukee that displayed a piece of polarizing photography.
“A lot of people thought it was cool and hip, and some people were quite offended by it,” Millard said. “From that experience I realized that because our business has become so homogenized, usually hotels try to be all things to all people.
“I don’t think we can do that,” he added. “You might not appeal to some people and that’s OK. Personally, I may think the Ace Hotel is not for me, but on the other hand, there are plenty of other independent boutiques that I really love and want to stay in. That’s OK.”