At the 2nd Annual Boutique Hotel 2014 Investment Conference hosted by the Boutique Lifestyle & Lodging Association
(BLLA) in New York City on June 4, it was clear that the future of the boutique hotel industry remains strong, economically speaking — even as more and more new brands, and even big-name hotel players, enter the market.
Both Jan Freitag, senior vice president of Smith Travel Research (STR), and Robert Namdelbaum, director of research information services for PKF Hospitality Research, said that the overall market forecast is positive for both the hotel industry in general, as well as boutique hotels (properties that are considered luxury and have less than 200 rooms according to STR’s metrics).
Today’s boutique landscape, as STR and PKF’s research also indicates, is not the same as it was when the first boutique hotel concept emerged in 1984 with the debut of Ian Schrager and Steve Rubell’s Morgans Hotel in New York. Thirty years later, the number of boutique hotels worldwide has grown dramatically, and legacy brands such as Marriott and Hilton are entering the space.
Groups and Boutique Hotels
When it comes to courting the group market, some panelists seemed hesitant to want to bring in MICE business to their boutique properties. Starwood’s Global Brand Leader for St. Regis Hotels & Resorts, The Luxury Collection, and W Hotels Worldwide, Paul James, however, made the case for groups meeting at boutique hotels, saying, “There is a high-end group market out there.” Responding to one panelist’s remark questioning if boutique properties even need groups, James said, “You need to re-examine how you define ‘group.’ What would you call a group of nine business executives who are staying at your property to conduct meetings?”
Famed hotelier Ian Schrager, who was later interviewed on stage at the BLLA conference, has also made his meetings strategy very clear with regard to his PUBLIC brand of boutique properties. In 2012, he told SuccessfulMeetings.com
: “[Meetings] have become a critical part of our business where, traditionally, it hadn’t been for me. If you don’t attract meetings, you won’t have a viable business. Corporate and group business has become our No. 1 priority.”
Blurred Lines in the Evolution of Boutique: Independent, Boutique, Chain?
Following Hilton’s announcement, on Monday, that it would debut a network of independent properties, called Curio – A Collection by Hilton, many of the moderators and panelists at the BLLA conference noted Hilton’s most recent move, and discussed the impact it would have on the future of boutique hotels.
“Big brands are encroaching into the boutique hotel business,” said Daniel Lesser, president and CEO of LW Hospitality Advisors, during a panel discussion, “Boutique Hotel – Start to Finish.” “Hilton has Curio; Marriott has Autograph [Collection]. We’re seeing a melding of the brands, and the perception of boutique independence is starting to get muddled.” Later, he noted, “You’re seeing boutique at all scales.”
During another panel discussion, “Independent versus Branded,” Paul James, Starwood’s global brand leader for St. Regis Hotels & Resorts, The Luxury Collection, and W Hotels Worldwide, discussed how the very concept of “boutique” seems universal in today’s hotel industry. “Everything is boutique,” James said. “Fundamentally, the world has changed. There used to be a sort of monoculture with the big-box hotels but it’s a different generation now.”
When discussing the pros and cons of being a part of independent hotel network like Hilton’s Curio or Marriott’s Autograph Collection, Michael Tall, president and chief operating officer of Charlestowne Hotels said that, for properties hoping to attracting the MICE group market, branding is a major benefit. “Historic data shows that a brand is going to help out that kind of hotel. Thirty-three percent of reservations for the properties in the Autograph Collection are coming from Marriott.com. This whole concept of soft branding isn’t a new concept. It’s a whole new pool of people to get in front of; it’s exposure to a new group of people. The lines between brand, independent, and chain are all blurring.”
During a later CEO panel, panelists were asked if they thought the boutique space was too crowded. Michael Achenbaum, founder and president of Gansevoort Hotel Group, said, “I’ve never been afraid of big brands doing boutique-style productions.” Patrick Denihan, CEO of Denihan Investments, said, “Large brands can’t deliver the experience that we do. Ed Scheetz, CEO of Chelsea Hotels, later added, “The big brands are just playing catch-up.”