1675-3 Boutique Hotel News of Boutiques' Demise Is Greatly Exaggerated/Rick Swig/RSBA Associates/Ma... Page 1 of 4
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RSBA & Associates
Hospitality Consulting Services
400 Spear Street, Suite 106
San Francisco, CA 94105
Email:
rickswig@rsbaswig.com
Web site:
http://www.rsbaswig,com
News of Boutiques' Demise Is Greatly
Exaggerated
by Rick Swig, May 2002
The Wall Street Journal recently ran a headline, which yelled
"Quirky Accommodations are Passe As Travelers Bypass
Boutique Hotels". The thought in the article implied that
when the hotel business responds to fads, it can be
significantly risky, as expensive rebuilding and refurnishing to
the wrong theme can be a costly mistake with long term
impact. There is the assertion that short term trends in a
recession environment show a more stoic traveler moving
away from flashy boutiques and into more traditional
environments.
Will the fate of boutique hotels follow the boom and bust
pattern of the dot.com sector? Is the boutique fad a temporary
flash in the pan to go the way of go - go boots and hot pants?
What exactly is going on here?
First and foremost, it may be important to recognize that the
unique atmospheres, which have been created by the most
notable boutique creators, including Ian Schrager Hotels,
Kimpton Hotel Group, and Joie de Vivre, were not created to
be commodities, but rather alternatives to generic hotel
products. Secondly, the use of the word "boutique" may have
been stretched when applied to a several hundred room hotel.
The initial curiosity factor and the energy along with the
novelty aspect of alternative hotel products may be subsiding,
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thus yielding the need for newly fashioned hotel products to
slug it out competitively with traditional products based on
fundamental merits of location, product, service, and
marketing. Additionally, the transient customer segments,
which have been the boutique focal point, have not been as
lucrative for all hotel sectors in recent periods.
Recognizing ongoing trends in the marketplace, Starwood
moved to make a commodity out of the brand alternative
boutiques through the development of the W brand. Moving
away from cookie cutter formats to reflect customer needs in
primarily more sophisticated urban markets, W has combined
style with fundamental comforts and amenities to target an
under - served distinguishing customer base.
While the word "boutique" has shifted interpretation from
communicating small and personalized to meaning different
and unique, Starwood through W may have really just
succeeded in creating a new, mass appeal brand. As an
alternative or supplement to Sheraton and Westin, this brand
has been developed through the product adjustment to shifting
demographics rather than just going "boutique". After all, the
primary W influences of Banana Republic, Pottery Barn, or
Kenneth Cole, and others are really retailers with their roots as
boutiques, which have moved into mass appeal, commodity
retailing.
Renaissance could be considered the "boutique" alternative to
the Marriott traditional brands, but that brand's product has
not evolved with as much definition as W has. Renaissance,
as a result, is presented as an independent feeling alternative
to Marriot's other products, but no one has accused the brand
of being trendy, unique, or differentiating from other
commodity names. So maybe the new meaning of"boutique"
is unique.
"Boutique" hotel practitioners provide needy customer
segments with the lifestyle references that they desire through
an alternative to the generic establishment. These hotels may
either focus on traditional values or on contemporary cultural
trends, but their commonality is their "boutique" (either
unique or small product) perspective. These hotels provide
the entertainment or environmental value for their guests
based on design, ambience, creative services, or amenities.
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Is the "boutique" hotel segment succeeding or failing? Are
"boutique" product types competing favorably with the
traditional brands? Will "boutiques" continue to
competitively survive? The answers are, of course, "yes",
"no", and "it depends".
The "boutique" hotel segment performance should be
evaluated with the same standard for traditional and
commodity brand segment hotels, as the basic performance
issues apply to all segments. The basic fundamentals of
location, product standard and validity, marketing, plus
distribution are still the primary considerations. Delivering on
these essentials develops customer loyalty and business
stability regardless of traditional or trendy.
The Wall Street Journal article conjectured that "sleeping in a
cool place" may be giving way to sleeping with "conventional
cousins" and that "travelers respond to fads in hotels much as
they do when buying clothes." This led to the advisory that
building unconventional products might be akin to risky
business tactics. Not necessarily so.
Probably more important has been some tendency for some
unconventional hotel product operators/developers to
overlook the basic customer needs in their hotel designs (ex.
good lighting, a comfortable bed, and responsive customer
service personnel). Starwood management has realized that
"a comfortable sanctuary" is more important that a "status
symbol", while Ian Schrager has recognized that customers
"want traditional rooms". Neither direction requires
abandoning the opportunity to be different, but it does
consider the balance between functional and stylish.
As evidenced by the downturn of K-Mart and that company's
inability to evolve to the needs of their customer in the retail
sector, the same issue applies in both generic and non-
traditional hotel products. Success depends on the intrinsic
values provided by hotels to their customers. Whether an
individual boutique hotel fails or succeeds has as much to do
with that hotel's ability to convert on their strategic
competencies for a competitive edge rather than the popularity
or productivity of the industry segment as a whole.
Delivery on the product promise and expectation applies to
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branded hotels, as well. Mileage points can be an attractive
add on, but a clean, comfortable, and well located product that
emotionally connects with a customer will build loyalty and
repeat usage more affirmatively.
Are quirky accommodations passe? Only if they don't pay
attention to basic customer needs. Are customers bypassing
boutique hotels? As much as customers bypass traditionally
conceived and branded hotels, which do not deliver on
expectation. Will unique products survive? It depends on
their adherence to fundamental competitive initiatives of
location, product quality, and service standards. No surprises
here!
Contact:
RSBA & Associates
400 Spear Street, Suite 106
San Francisco, CA 94105
E:mail: rickswig@rsbaswig.com
Website: www.rsbaswig.com
Tel: (415) 541-7722
Fax: (415) 541-5333
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