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Boutique Hotels-The Trendy Fashionable Hotels With A Sound Business Proposition

I am being regularly approached by investors and hoteliers to advise them on either converting an existing facility or create a green field opportunity into a fine boutique hotel. From my interaction with them, I felt that the concept of boutique hotels needs explanation to bridge the gap in its perception. I therefore thought of penning down my experiences in creation of a boutique hotel.

 

Before we go ahead, it is important for us to understand, what does a boutique hotel stand for, is it the small size, is it the facilities or the location? – Well it is a combination of all these factors and many more. The concept of boutique hotel first surfaced in America in 1984, with Steve Rubell and Ian Schrager opening their Morgans Hotel in New York. It then slowly spread to other cities like Los Angles, and Chicago, San Francisco, London and other parts of Europe. Initially these hotels were around 50 rooms or less. We shall discuss the size of a boutique hotel later on; let us first understand what they are. Well there is no single accepted definition of the term, in simple and layman’s language and as I interpret it, these properties are, non traditional, unconventional, small, trendy, chic, life style hotels with high degree of personalization in service and guest interaction and offering a unique experience.”

 

In Asia and the Middle East, the concept of Boutique hotel came in mid to late 90’s and the first hotel, it seems, was in Bangkok. Today boutique hotels are in all most all countries of the region and in most of the metros and important resort locations. Some of these are now even offering franchise of their brand to third party hotels.

 

Boutique hotels perform the same functions as the regular hotels or offer the same product to its residents, guests, customers and patrons yet they are quite different from the regular hotels in many ways. These differentiations make them unique and they are able to extract equal if not higher, per room revenue. We shall discuss these factors to understand the product and its concept better.

 

Like for a regular hotel, location and the city plays the most important role for its success. Boutique hotels require a metro city, down town or CBD location for maximizing returns. Resorts boutique hotels also require prime location. This is more so for a boutique as its clientele is from the age group of 20 to 50 years and comes from upper middle to higher income bracket. This segment of user feels most comfortable in this type of prime location. A perfect example of this is the concentration of boutique hotels in New York’s Manhattan area, London central area, Singapore CBD etc. A boutique hotel in 2-tier cities will not fail but it will generate relatively lower per room returns for the same investment.

 

In Asia, China and India however, offers a uniquely different proposition in 2-tier cities. Locations like Chandigarh, Jallandhar, Jaipur, Ahmadabad, Lucknow, Pune, Coimbatore etc, in India and Guangzhou, Shantou, Nanjing in China to name a few, are seeing the emergence of new boutique hotels. The rationale being that a boutique product need not necessarily be a five star or a deluxe property all that is required is to make the hotel hip and chick in look and feel and add a touch of technology in the guest rooms. These elements position the property in the up scale segment enabling it to extract a price premium. The budget chains launched a few years back are offering attractive terms for management and marketing services to expand rapidly. In fact the independent hotels and the chains, both compliment each other.

 

Normally, a hotel is accepted as a boutique product if it has 3 to 150 rooms inventory. However some in the industry feel that the size of the property should not be over 100 rooms. This was generally the understanding till now; but with the entry of most of the international chains in this segment, the size factor has got diluted to a large extent. The entry of chains was prompted by the fact that a boutique hotel generates higher returns than the chain hotel, as their over heads and marketing expenses are relatively lower. Now we see chains like the Hilton, Starwood, Kempinski, Four Seasons, Le Meridian, Mandarin Oriental to name a few who have ventured into this segment in the Asian and Middle East markets. This is in addition to the regional chains like the Amanresorts, Oberoi, Dusit, and Banyan Tree and in India the Ista and Park group. The recently launched Armani hotel is Dubai has opened new opportunities to life style brands to diversify into hotels and enhance the brand equity and brand recall value. The concentration of Boutique hotels in the Middle East is in Dubai, Abu Dhabi, Cairo, Beirut, and Istanbul.

 

Boutiques hotels are generally old hotels or building, up graded and refurbished into a boutique product. They retain the old historic charm of the building and its facade and have the interior of the hotel as an ultra modern product. This enhances the experience of living in the hotel. To achieve this, the designers use lighting and water as one of the mediums for creating an ambiance and mood. New and modern hotels are however designed as boutique right from the start. Both type of properties have their inherent strengths and weaknesses.

 

The success of a boutique product depends largely on the quality of experience it offers to the guests. This experience is the resultant feel of all your senses, i.e., what you see, what you hear, what you taste and what you feel. More explicitly, it must evoke the “Wow” factor right from the first point of exposure. This part of development of a boutique property is perhaps the most difficult one.  It entails creating a mood, an environment and an ambiance which will add uniqueness to the experience. The designer, the executor and the operator have to work together to define each and every element of the product, ensuring that it adds to the exclusivity of the property, enhances the experience and makes the product a preferred one over the competition, both boutique and regular hotels. While working on the experience enhancement objective, the team can not loose sight of other essential elements of the product. It has to be ensured that the final product is “chic” and “trendy” exuding a high life style.  Decor plays a very important role in creating ambiance and adds to the evolution of style of product and service. The hotel must become the preferred happening place in the city and the location for the local and visiting celebrities, a place where people want “to be seen around” and “to be seen with”, with local media eager to cover each celebrity visit. Visiting the hotel must be seen as a bonus as it offers an opportunity to be seen in the local print media.

 

Boutique hotels are very trendy even in technology; these are hotels with state of the art technology. City boutique hotels boost of high speed WI-Fi internet connectivity in guest rooms and designated public areas, dimmer switches in all areas including guest rooms, multi-plug sockets, LCD or Plasma flat screen TV’s with remote control, telephones with voice mail, message display and follow-me system, DVD players in rooms. The bathrooms are no less in furnishing, fittings and technology. Most bathrooms have bath tubs cum Jacuzzi as also rain shower, frost free mirrors and multi-plug shaver socket adjustable to different voltages. While all these technological features and gadgetry is installed, it is also ensured that every thing is user friendly and does not offend the user, the guest. There is no end to imagination, the seed for innovation and evolution. Development of boutique product is directly influenced by creative and practical imagination or visualization by its creators. The product development and project implementation team for a boutique hotel is generally young and youthful, who can anticipate the needs of users of this type of exclusive and up market product and address the same in creating the right profile.

 

A boutique product is not complete with out providing its guests stylish entertainment. The entertainment in these hotels includes the pleasing experience one enjoys in its restaurants and bars. The atmosphere in the restaurants is created in a way that the visit is mentally and physically entertaining and pleasing. The atmosphere, food, and style tickle not only the taste buds but also stirs the sight, the smell and the feel scenes. The overall result is enthralling and exotic. While this type of experience could also be enjoyed in the restaurants of a regular hotel or a stand alone restaurant, what make it so special in a boutique hotel is the fact that here it is the continuity of an experience flowing from the rest of the product. In addition to the restaurants, most of the boutique hotels have a chic lounge serving choicest of beverages which offer live music and night club atmosphere in the night. The hotel becomes an entertaining fun place.

 

The food in boutique hotel is trendy too; most hotels have very innovative menus. The term fusion cuisine is synonymous with boutique hotels. The selection of crockery and table ware is hip with fine bone china to reflect quality. Table setting complementing the decor, interiors and the mood. Service friendly and inviting. Since boutique hotels normally have one or two restaurants only, they rely on table tops, table setting and lighting to create different moods at different times of the day, changing the experience at the three meal times.

 

Most of the boutique hotels are planned on an agreed theme. The planning of various areas therefore becomes an extension of the theme complementing the overall design consideration. It is this aspect that makes the hotel different from others, away from conventions and traditions and makes it extraordinary. The theme of the hotel helps in deciding the brand of the hotel, conversely, one could decide on a name first and then expand the name into a theme. Without a theme flowing through out the property consistently, the hotel will not have a distinctive personality which is important for establishing its unique identity in the market and in the sub conscious minds of the guests. It is this personality and identity that induces repeat purchase by invoking a brand recall.

 

We have discussed the physical aspects of the boutique hotel or its body. Let us now take up the issue of “Soul” of the hotel. The soul of the property comes from its people. People – who on one hand are its residents, guests, visitors and patrons and on the other its employees and managers who play such an important role of fueling the hotel with vibrance and bringing it to life. The staff of a boutique hotel plays a very critical role in ensuring its success. The staff has to be professional, well trained, well groomed with positive attitude towards hotel guests. People must be able to anticipate the needs and wants of the guests and never allow these to convert to demands. Their attitude towards the guests must be very positive, friendly and courteous.  They must have a sharp memory and a keen ability to remember names, in boutique product, guests are normally addressed as Mr./Miss ABC, and not as Sir/Madam, nor recalled by their room numbers. People selection and their training and grooming therefore assume great significance. Boutique hotels give great importance to the uniforms of the staff, these are normally specially designed by a known fashion designer to compliment the atmosphere and to bring out the smartness in people. All this also adds to the style of the property. The training and grooming in these hotels is an on going process. At this point I would also like to add a very important observation about the staff of a boutique hotel. It is said that a hotel would be as good as its General Manager, and the General Manager will be as good as the staff he/she works with. Therefore we can not over emphasis the importance of staff selection, training and grooming. Normally, the boutique hotels have a young staff, under the age of

35, the General Manager is the oldest, in his late 30’s. This is what makes the hotel vibrant and bubbly.

 

Very often I have used the services of a stylist to suggest those small details which go a long way to enhance the ambiance, create impact on the style and enrich visual and physical experience. Boutique hotel business in many ways, requires more inputs than creating or operating a regular hotel as here we are taking care of so many intangible and subjective elements of human behaviors that unless meticulous care and attention is given to details, the whole concept could back fire.

 

Boutique hotels today are just 26 years old. They were born in 1984. In this short period of existence they have made a mark in the industry and carved out their own niche. Their growth has been phenomenal, to the extent that Google lists boutique hotels under various segments based on their size, location and user groups. These include luxury boutique hotels, chic boutique hotels, designer boutique hotels, spa boutique hotels, romantic boutique hotels, beach boutique hotels and small boutique hotels. In countries like India there is yet another segment that has become extremely popular with the leisure traveler – The Heritage Boutique Hotels. These are old forts, palaces and havelis converted into boutique hotels. These hotels offer a product with colonial architecture, ultra modern and chic facilities and services and a unique and unmatched nostalgic experience of luxury at its best.

 

The future of boutique product is very promising as an investment and business proposition. Traveling public today knows what they want and how to get it. They are willing to pay the right price for the right product. There was a time when the marketing mantra used to be "sell what you have,” today however it has changed; you to “produce or make what sells”. The sooner we understand this changing demand dynamics; the better will be our chance to compete. It is only a matter of time that we will be stepping into boutique hotels with life style product brands like the Cartier, The Mont Blanc, The Ferrari to name a few.

You have permission to publish this article without any change what so ever electronically, in print, in your e-book, or on your web site, free of charge, as long as the author by-lines are included.

 

Ram Gupta is a professional hospitality consultant with over four decades of experience in Asia, Far East, Middle East and Europe. He has been associated with over two dozen hotel projects and a number of luxury spas. His web site can be viewed at http://www.bcgglobal.com and can be contacted at ramgupta@bcgglobal.com

 

 

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Tags: boutique, city, hotels, luxury, resorts, small, trendy

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Comment by VINEETH . T on February 14, 2012 at 16:56

Excellent

Comment by Rita Shah on February 11, 2012 at 8:14
Great well specified
Comment by Steve J. Stinson, DSM KStJ FIH on February 11, 2012 at 8:13

Très bon Monsieur,

Most sincerely yours in hospitality,

Steve:-)

Comment by Mohamed Maged on February 10, 2012 at 23:44

great job

Comment by gamal El Galant on February 10, 2012 at 23:05

very good artical

Comment by Wasula Wijegunawardane on February 10, 2012 at 18:32

Excellent article

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