Conference panelists discuss success of boutique hotels

By Danny King
LOS ANGELES — U.S. boutique hoteliers and lodging analysts last week celebrated a hospitality sector that continues to outperform the broader hotel market at the Boutique & Lifestyle Lodging Association’s second annual Leadership Symposium at the Hollywood Roosevelt here.

Conference panelists from companies such as SBE (SLS Hotels), Denihan Hospitality (Affinia, the James) and Commune Hotels & Resorts (Joie de Vivre, Thompson Hotels) forecasted a broader range of boutique hotels in secondary U.S. markets as operators look to expand their presence beyond larger, boutique-heavy cities like New York, San Francisco and Los Angeles.

Hoteliers are buoyed because the boutique hotel sector, which accounts for just 2% of the country’s 4.8 million hotel rooms, continues to benefit from the resurgence in travel spending while outperforming the rest of the lodging industry.

For the 12 months ended August, revenue per available room (RevPAR) rose 8% from a year earlier, compared with a 5.8% increase for the entire lodging sector, said Jeff Higley, presenter and STR vice president of digital media and communications. Boutique hotels’ RevPAR of $156.93 is 44% more than the country’s average.

Meanwhile, boutique hotels’ average room rate of $209 was almost double the industry norm, while boutique hotels’ occupancy rate of 75% was 13 percentage points ahead of the overall lodging average, according to STR.

Boutique hotels have tended to cluster in larger hotel markets, but cities such as Austin, Texas; Portland, Maine; and North Carolina’s Raleigh-Durham area are among secondary and tertiary markets that are either getting an influx of boutique hotels or are ripe for one, according to panelists.

Panelist and Trust Hospitality CEO Richard Millard, whose company’s hotels include New York’s Mela Hotels and South Beach’s Carlyle, mentioned hotels set to debut in Portland, Maine, and College Station, Texas, within the next 18 months.

“There’s a huge movement towards the middle of the country,” said panelist and Charlestowne Hotels President Michael Tall, whose properties include the French Quarter Inn in Charleston, S.C., and Planters Inn in Savannah, Ga.

Amid such expansion, panelists stressed the importance of remaining independent and staying away from repetitive design motifs used by their larger competitors.

“We’re pushing so many amenities in the guests’ face, but it’s not all about bells and whistles,” said panelist and Provenance Hotels President Bashar Wali, whose properties include Nashville’s Hotel Preston and Hotel Deluxe in Portland, Ore. “It’s theater. You have to have a good story to tell.”

Additionally, the sector has moved beyond the point where a unique look will be enough to pull prospective guests away from either chain hotels or other boutique properties.

In fact, many of the service standards espoused by larger hoteliers are being passed onto the boutiques as former executives with companies like Marriott and Starwood move to either smaller companies or open their own boutique properties.

“The segment evolved almost entirely by design,” added panelist and Commune Hotels CEO Niki Leondakis. “Too many people rely on design as the defining characteristic. Design cannot be the differentiator. Experience has to be the differentiator.”

Follow Danny King on Twitter @dktravelweekly.
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