1675-1 Boutique Hotel a
..
0
boutique hotel
Fad or phenomenon?
When is a boutique hotel not a boutique hotel?With
special research by Locum consultant
•.; Destination looks beyond the hotel market's
fragmentation to coin an alternative description for this,
— -- - its healthiest sector.
. A helpful definition?
1.
Everyone seems to disagree on the subject of boutique hotels:on
what is and what is not;on where they are to be found and where
-..e 'k` " not;on their best pricing policy and the true economics;nn their
fashion status or long-term promise.In particular,on what to call the
market sector.
On two issues,most commentators agree.So called boutique
hotels look in better commercial shape than traditional chain hotels.
_laMk Irak .
.:.w (And it all started,as so many trends do,in London.Twenty years ago,
_ __ lin a South Kensington side street,Anouska Hempel made her name,
..;. ""^ more famously than ever she had as an actress,with, kc'''.It had
11 h -` about 50 rooms,some of them as small as broom cupboards,a
mag dauntingly cool bar,and the blackest hole of a restaurant that any
one ever overpriced in this often overpriced city.And if you were a
`'f^, rock and roll figure or an actor under SO,you stayed at Blake's if you
were anyone.
p Around this time,Tom Wolfe had written a little regarded essay in
Rolling Stone magazine,entitled'tun Chic'.(Ibis piece was greatly
Where the'funky chic'of so-called boutique hotels really started: overshadowed by its predecessor,'Radical Chic',which satirised New
Blake's,Roland Gardens,London SW7 York's fiber-liberal elite as it entertained Black Panthers in the
Bernsteins palatial home,but in its way it described a more
important and lasting phenomenon.)I unky chic was a disease that
spread,Wolfe asserted grandiloquently,from Chelsea's famous Club
Dell Arethusa around the world,via Paris to California's troubadour
and Whisky-a Go Go(where E Iton John was really launched).If
Wolfe had stayed his hand,he would have seen his disease find its
Boutique n a small shop or department of a fullest flowering in New York's Studio 54,the now notorious base
store, selling (esp.fashionable) clothes or camp for assorted cokeheads,entertainment entrepreneurs,and its
notable founders,Steve Rubel!and Ian Schrager.
accessories, [french] In a similar way,the funky chic of so-called boutique hotels spread
Oxford English Dictionary from Blake's(via Paris'Motel in Rue des Beaux Arts with its Oscar
34
IIMMP
Boutique hotels vs total US and all other luxury hotel
Average annual change in performance ratios 1095.2
10-
a` gic Total US
8 7.5 aiquehoteie
6 TMi ■ Allteo/w dourly hotek
45
g 4_ ]3
z *w,.
.1-
Occupancy Room rate RevPAR Supply Demand
"Strangely enough, (for
' boutique hotels) demand
seems to increase as supply
rises and it falls when the
rate of growth in new
properties slows down."
Mark Lomanno,President,
Smith Travel Research
Wilde pedigree),to achieve fame and fortune on America's West unique atmosphere:It goes on,inevitably,to cover the boutique
Coast at LA's Mondrian,and in New York's definitive first statement, hotel as'micro-city_as fantasy environment_.as a lifestyle._as
lvlorgans(est.1984,prop.I Schrager).Life imitating art,hospitality the ultimate merge(sic)of design and fashion'More helpfully,Mark
imitating rock and roll. Lomanno,the President of Smith Travel Research,produces valuable
American commentators find it easier to define the boutique economic analysis of the market sector defined as follows:
hotel and classify it as a market sector than do its British exponents. 'On December 31 2000,there were 163 properties containing
Olga Polito(profiled later in this issue)accepts that her Hotel more than 38,000 rooms in the STR database that met the
Iresanton might be described as such but doubts whether the somewhat rough definition of boutique hotels.Included in our
boutique's most quoted progenitor actually creates boutique hotels. sample were W Hotels,Kimpton Hotels,Ian Schrager Hotels,and any
'Schrager's not really boutique.Individual,different,but not independent properties with an adr more than$150 and 150 to 400
boutique as far as I'm concerned.Boutique means small,quite small rooms.Since a particular group of hotels can only be identified in
room irky in a cotta y'Would she describe,along with our database by size,price level,location,and chain affiliation or
some commentators,Hotel du Vin as a boutique?'No.I'd call it a independent ownership,a better definition of boutique hotels can be
good chain:Its founder,Robin Ilutson,is not so sure either.'I don't derived from the information on the internet:
know what it(boutique)means,actually.I don't know what we call
ourselves but boutique is closer than most things,though it's not • Appeal to leisure and business travellers,particularly women.
brilliant(There is a suspicion that Hutson had a better description of • Although sonic are small(Blake's Hotel has only 51 units),
this hotel sector in his original company name,hut more of that several have more than 400 rooms.Most are between 150 and
anon.) 200 rooms.
So if soi-disant boutique hoteliers find the description less than • All stress homelike atmosphere,highly personalised service,
optimal,why use it?For three reasons.Because it provides some and distinctive style with generous amenities including easy
common currency and thus permits debate.Second,because it is access to the internet
widely used in the US,the world's biggest hospitality market.Third, • For the more sophisticated traveller,they are the"right"place
because,as a result,market data has been collated and analysed on to stay:
the basis of a defined US hotel market sector.
On the basis of this definition,I ornanno calculates that boutique
hotels in the US have significantly outperformed other luxury hotels
The US track record on all dimensions except supply over the five years to end-2000.
(See fable 1).Most important,on yield(what the industry calls
Arclulecture NUFV(better busincus through design..:)predictably RevPAR)the boutique hotel index climbed from 233 in 1995 to 281
defines the boutique hotel from a design standpoint:'Boutique hotel in 2000,whilst the yield index for other luxury-priced hotels grew
has become shorthand for a hotel with a high-concept design and only from 181 to 185.Over the same period,boutique hotels'dollar
br.aM I,••:IA r.'Irn , 35
r
share rose more than 18 per cent in relation to all luxury-priced
hotels.
No wonder that last year Milton opened its first'lifestyle'hotel at
the Trafalgar and Le Meridien announced global plaits to open 5,000
'Art and tech'bedrooms,each with electronically controlled beds
and plasma televisions.They are playing catch-up with Starwood
Hotels'W mini-chain,whose success is at the heart of Smith Travel
%Ai Research numbers.Whether or not the other major chains will truly
understand the key to success in the boutique hotel sector is a moot
point.Somehow,W has leapt the cultural chasm which separates its
- informal,atmosphere and lobby bmf from its gmnde dame parent,
the Westin chain.Can the others?
If they,too,understand that this sector's growth is about attitude,
and if,therefore,they embrace culturol change,then perhaps they
can succeed.(they might be well advised to spin off separate,
virtually independent divisions to achieve their goals,however.)
Is the boutique a designer
phenomenon?
The risk chains face is in equating the boutique hotel with the
designer hotel.Leading-edge design is often a characteristic of this
(W at 39th Street and Park Avenue,pictured) new and healthy hotel baby,but it is not by any means the whole
I like the vibe. This feels more story.Lumping'design'and'boutique'together misses the point.This
sector actually reflects all the fragmentation tendencies of
like a real bar' consumer markets especially those for premium-priced goods-
(On W and other imitators) the world over.The reason for the sector's growth is the reason for
its fragmentation:individuality.This individuality-of guest.of
'It drives me crazy that I've come up proprietor,of site,of staff,of hotel atmosphere-is reflected in
with this idea and people are trying design,but it may well not be driven by design.
It is an easy elision,an easy error to make,confusing the role of
to make billions off of it.' design.Olga PoHui may well be right to judge Schrager's hotels as
too big to be boutiques,and Schrager himself clearly loathes the
Both from Ian Schrager,hotel proprietor(but
description'hip'which many use for boutique hotels,but the camp
not of W) followers see Schrager as the leader of the boutique movement,the
analysts base their sector definitions on his hotels,and observers
just point at the Royalton,Sanderson and Hudson,connected as
they are by Philippe Starck,and'eureka'becomes'design:
Schrager has a more interesting point to make about his hotels:'I
like the word subversive.The idea is to do something contrary,
something that violates the status quo,and as long as it is well-
executed it works.If it's not well executed,then it's just trendy:
to quantify the role of design,listen to Schrager's General
Manager at the Sanderson.He has been quoted as saying,We are in
the entertainment business',and,watching his barmen play the
exhibitionists on both sides of the counter,you take his point.
Beyond entertainment,the design plays a role in justifying high rack
rates but only so far.'I can only sell the design once.Everything
behind has to work for somebody to come back a second time.The
place needs a personality,the staff need to have a personality,the
design element can pay if you do everything else right:Some might
think Schrager hotels extreme and certainly most of the Sanderson's
guests come from media,fashion and film industries but,like the
slightly more modest St Martins Lane,they also come from more
traditional worlds like banking and pharmaceuticals.The key to the
guest profile seems to be that,like the hotel itself,the guest is an
individual and,suit or no,an individual that can spell attitude.
36 :..
if
; -.'
! f 7�
sem• A
'I build my hotels to �• � �.
put people in the !es;r •
-
spotlight, it is
all about •
.. `-,..R ■"'
exhibitionism.'
Ian Schrager,owner
Yo Sushi restaurant and the Far[astern tradition,also adopted by W,
London: the world's most 'complete' of one point of contact for the individual guest's needs.Hence the
'oasis of calm'definition applied by every other travel writer.
hotel market myhotel's General Manager,Christopher Oates,puts it thus:'This is
'mf,which to each individual means*yours'Inscrutable for some,
Beyond Schrager's hotels and within a more accessible price range but you know what he means.
come properties that seem to justify the boutique description more Andy Thrasyvoulou has made a lot of myhotel's spiritual character •
accurately:the Covent Garden in Monmouth Street,myhotel in in the past but has been(well)advised not to allow this to dominate
Bloomsbury,the Pelham in South Kensington,the Franklin in Egerton myhotel's projection.In fact,the branding techniques which he
Gardens,the Portobello in Notting Hill,and the Charlotte Street,also practices provide lessons that most of the hotel industry could
where you would expect it to be.These hotels all feel more usefully study.mystory,as he puts it,is an exemplary brandstory,
boutique-ish by virtue of their size as well as their informality and reflected yet again in myhotel's latest product development-
pricing.(Think[iSO or thereabouts per night,as opposed to at least myplace-an 80-square-metre penthouse comprising apartment and
another[100 per night in Schrager's hotels,or Conran's Great studio,where we find'a fusion of spirituality and technology:Here
Eastern or the Ongs'bequests,the Metropolitan or Halkin.)Each of you can choose to have a butler,choice of room aroma,personal
these establishments shares design flair,townhouse chic,and less chef,beauty treatments,cosmetic mini bar,fitness equipment,even
than-Establishment ambience,but they are all different,all musical instruments.(As the outstanding myhotel press people say:
individual.The typical example of this atypicality is the one that has myplace'is certain to he particularly popular with the many bands
had the most press coverage:myhotel,lower case et al. and celebrities that already frequent myhotel').Just fill in'the
This Bloomsbury hotel has defined its own niche,far away from unique rnypreferences form...so successful in making myhotel
the glitz of nearby Berners Street.this is a place which'moves at the guests feel so welcome'and you are all set for'an individually tailor-
pace which suits each individual guest',in the words of its owner, made experience that is completely in tune with your needs:
Andy Thrasyvoulou.A place that epitomises that questionable Soon,myhotel will face the challenge confronting all successful
description'lifestyle hotel'but takes it a stage further;whereas independents:how to replicate success in new sites,how to stay
other lifestyle hotels might offer areas for stress relief and individual as you multiply.Ihrasyvoulou is ready,with sites,branding
relaxation,myhotel is dedicated to this in its entirety.Hence the and an individual's passion,but the London hospitality economy
original Feng Shui expertise from William Spears(one wonders how since September 11th has caused him and his backers to take a
Conran and Partners worked their designs around that...).Hence the breather.
of am r,..TrR.•rffR, 37
r .UK examples of the US-defined boutique hotel market
The Sanderson Hotel Hotel Tresanton myhotel Bloomsbury Hotel du Vin
50 Demers Street St Mawes 11-13 Bayley Street The Sugar House
London W1 Cornwall London WC1 Narrow Lewins Mead
Owner: Ian Schrager Owner: Olga Polizzi CBE Owner: Andrew Owner: Robin Hutson,
Hotels Inc. Thrasyvoulou Gerard Basset
Designer: Olga Polizzi CBE (plus directors)
Designer: Philippe Starck Designer: Conran Design Designer: Mr Li Mrs R
(Re-)Opened: June 1998 Partnership Hutson
Opened: September 2000 Rooms: 26 Opened: March 1999
Rooms: 150 Entry price: Rooms: 76 Opened:* November 1999
Entry price: (340 In season (250 Entry price: (170 Rooms: 40
Out of season (150 Entry price: (109
• 3rd of 4 now open
Sources:Michelin Red Guide 2002; Locum Destination Consulting
rate of growth in new properties slows dovin.As you might expect it
A new financial picture is not the same picture for luxury-priced hotels overall.
In other words,this is a new sector that does not obey all the old
This is the first major downturn here in a decade,with Foot and rules.Secondary locations work and supply-driven growth is still
Mouth,US recession and international terrorism all conspiring to available.What is more,technology is allowing premium rates with
depress hospitality revenue.Yet,whereas many an overpriced less intensive service and lighter payrolls.In the context of cold
London restaurant and many a traditional,luxury hotel has been macro-economic blasts,the market may feel chillier than it did but
emptied,it is likely that the accessible,so-called boutique sector will this sector remains attractive.Beyond overall market factors,the
have weathered the storm better than others.Outside London, chief risks lie in expansion and the strain this places on
occupancy levels and revenues at Hutson's Hotels du Vm and entrepreneurs and the ethos of individuality;in renewal,because if
Polizzi s Tresanton demonstrate graphically how robust this hotel this type of hotel stands still,it loses appeal;and in the value on
type really is. offer,as some are tempted to stretch beyond their accessible,
Their performance questions the traditional bankers'view that 'volume prestige'price points.
this is a big city phenomenon.Rich Rohrbach,a senior vice president
of Credit Lyonnais,cites the usual criteria for backing ventures in
this sector:provable or defensible cash flow,strong management, In search of individuality
good location,upper price points.He adds that'a lot of times the
level of commitment and brain cells devoted to that particular asset The more that Establishment hotel chains see their market shares
is higher because it's a smaller company and they have more energy shrink,the more they will try to replicate the successes of the so-
poured into it:However,he restates traditional location logic:'You called boutique sector.And the more they will try to achieve this
might not want to do it Detroit.They're more a New York,Chicago, through design and product details,rather than true individuality,
Sari Francisco thing:How about Winchester,Tunbridge Wells,Bristol, personality and culture.
Birmingham,Leeds or St Mawes,Mr Rohrbach? As ever,the independent sector shows the way for the multiples.
Another finance man,David Twardock,president of Prudential It happens in music,film,fashion,cuisine,television,in just about
Mortgage Capital Company,raises traditional supply and demand every pursuit of leisure and culture for cash.Independence of spirit
issues.The only concern I would have is if there are too many matters,even when independence of ownership no longer holds.
brands out there,that people are driving development in order to (The ethos is still visible at Virgin Airlines,though not Virgin music;
get more product in the market place,and overdevelopment can still at Oddbins but not Bottoms Up;still there at W hotels,but
result out of that dynamic:Point taken,Mr Twardock,and such an Malmaison?)facing this issue-the culture of individuality- will be
issue of competition has indeed caused one Robin Hutson to avoid a the multiples'biggest challenge.
particular town(such as Leeds,which already had a 42 The Calls and Some observers believe it is design that drives this sector.Not so;
a Malmaison).But,macro-economically,Mark Lomanno at Smith Hotel du Vin is almost anti-design and a market leader.Others see
Travel Research has shown,via regression analysis,a good(76 per age segmentation as the key,but the attraction of this sector is as
cent)fit between supply and demand for his defined boutique much to baby boomers as Generation Xers,and its appeal to women
hotels,where demand increases as supply rises,and falls when the is probably a more crucial demographic bias in a less patriarchal
38 ar:eun.•rrr<e•in% ,
1 /
•
business world.People talk about'lifestyle'but this,like design,is earns more than him),Robin Hutson had it right when he set up The
another self-limiting,soon-to-be-dated label.The sector does have Alternative Hotel Company.Since that title is now available-thank
fashion appeal but with longer legs than any fad.(To plagiarise Cecil you,Robin-we propose that the sector previously known as the
Beaton:'Fashions change but fashion,like the poor,is always with boutique hotel market'be re-named'the alternative hotel market'
us.')Ian Schrager sounds a touch cute when he declaims,'You are and keep its doors open to individual hotels with attitude.
where you sleep',but he is stating a truth of consumer marketing.
Guests are choosing hotels where they feel right,as individuals.
the much-respected voice of the US hotel establishment,Jeff
Weinstein(Editor-in-Chief of Hotels magazine)defines the sea
change in classical terms:'It is time to take notice of what has
become a mature industry and the changing preference of
customers'
What the Americans call boutique hotels now define a prosperous
niche:1 per cent of total industry rooms,3 per cent of total industry
revenue.The sector is here to stay,longer than the term'boutique',
we suggest.The word boutique'suggests smallness and fashion too
overtly,and perhaps too much femininity to boot.This sector
represents a distinct shift away from norms,sameness,uniformity,
the mainstream.The man who coined the best term for this market
has now,kindly,stopped using it as the name of his company.In the
era of a Prime Minister who plays a Fender guitar(and whose wife
ref ik
This is 'my' which to each individual
tAl
means'yours'."
Christopher Oakes,General Manager
N
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Fib IL .
mama in
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