Boutique hotels on the rise

TravelMole guest comment by Michelle Grant – travel & tourism research manager at Euromonitor International

Offering an intimate stay with heavy emphasis on cutting edge design and highly personalised service, boutique hotels are enjoying a resurgence in popularity with discerning travellers. 

Their success has fuelled expansion plans for both boutique chains and large hotel chains worldwide.

Consumers demand more

A hotel’s features and location are a major contributor to travellers overall trip experience, especially due to the amount of time and money spent staying there. 

As a result, travellers are demanding more of their hotels including the latest technologies, modern and interesting design features, luxury foods and superior service. 

Historically, the word ‘boutique’ implied expensive. However, many hotel brands, such as NYLO, are bringing ‘boutique’ features to the masses. 

The upcoming brand launch of NYLO XP in the US will offer an urban-style boutique experience located outside of urban settings. Still close to business centres, the hotel will offer affordable prices between US$90 and US$110 a night.

Boutiques become chains while chains launch boutiques

To gain scale and increase their appeal with business travellers, boutique hotels are opening numerous outlets, becoming their own hotel chain. 

Each hotel still retains its own identity by incorporating elements from its locations into design features, local food and overall culture. 

Kimpton Hotels, for example, raised US$246 million in April to purchase 10 hotels, adding to their 42 existing properties.

The concept of boutique hotels has proved so successful that hotel chains have increasingly brought their unique concepts and amenities to their own brands.

Starwood Hotels was the first chain to launch a large scale brand based on the boutique concept with its W brand. Starwood’s W Hotels was the first to have a boutique chain hotel concept with an emphasis on trendy design and hip locales to target young, urban travellers. There are currently 26 W Hotels worldwide. 

Other chains have followed with Hilton’s Waldorf=Astoria Collection and Marriott’s Edition brand in partnership with Ian Schrager, a successful boutique hotelier.

Other successful examples include Starwood’s aloft, IHG’s Indigo and Hyatt’s Hyatt Place.

An international trend

The growth of boutique hotels is not just limited to the US. Many hotel chains are expanding their boutique offerings overseas, often in key gateway cities. 

Regional boutique hotels are also building their own chains throughout the world. 

For example, the Stein Hotel chain has seven outlets across Europe and Hotel du Vin is expanding in Britain. 32nd Milestone, in India, is expected to add five more hotels.

The outlook for boutique hotels

Currently, luxury hotels are holding up well in the US despite the economic strain. 

Luxury leisure travellers continue to treat themselves and high end business travellers still have the authority to book more expensive rooms. 

Some belt tightening travel managers may insist on shifting to mid-priced hotels to cut travel costs. This is likely to have only a marginal impact on boutique hotels while the mid-priced, ‘boutique’ brands, such as aloft and Indigo, may benefit from a shift to less expensive brands.

The long term outlook for the boutique brands is much rosier. Growing global affluence and a more demanding Generation Y will contribute to a permanent shift to hotels that are lifestyle driven. 

However, many of the features touted by these brands, such as hi-tech, are being incorporated into traditional brands, which will keep every brand competitive.