Hotel experts have all sorts of definitions for boutique hotels. “Not cookie cutter,” one said. “Chic,” said another. “100 rooms or less,” said a third.
But whatever the definition, big hotel chains and smaller boutique brands are planning to open many more of them in cities across the United States and overseas over the next few years.
Here is a sampling of the boutique or, as some refer to them, lifestyle hotels that are in the works. In December, Ian Schrager, an originator of the boutique concept, announced two new brands, as yet unnamed. These follow the collaboration he began three years ago with Marriott International to create the Edition boutique hotel brand. In September, Richard Branson’s Virgin Group, which includes the high-end Virgin Limited Edition hotels, announced Virgin Hotels, a new four-star hotel brand that will focus initially on the North American market.
More recently, the Wyndham Hotel Group signed an agreement with Chatwal Hotels and Resorts to franchise and manage Chatwal’s Night and Dream boutique brands, and Sonesta International Hotels announced its own brand, Kept. There is Modo, from the former chief executive of Nylo Hotels; and new boutique spinoffs by Sofitel and Swire Hotels. And John Pritzker, a member of the family that started Hyatt Hotels, who now owns a controlling interest in Joie de Vivre, a California boutique brand, plans to double the brand’s 34 hotels and open them across the country.
Although industry experts estimate boutique hotels today represent at most 3 percent of all hotels in the United States, they expect this number to grow significantly. Bjorn Hanson, dean of the Preston Robert Tisch Center for Hospitality, Tourism and Sports Management at New York University, said almost a third of all hotels opening in Manhattan this year would be boutique hotels, and as much as 10 percent in other major urban markets. He estimated that they could account for 6 percent of all hotels in the United States, and as much as 10 percent in the largest urban markets, in 10 to 15 years.
One reason for this growth, said Henry H. Harteveldt, travel analyst for Forrester Research, is a reaction by travelers against large hotels that are much the same, no matter the location.
“Everybody pays attention to design,” Mr. Harteveldt said. “People like things a little bit different, offbeat. And they make someone who may have a rather mundane life feel hip.”
The plethora of new brands is also a reflection of economic conditions and the state of the real estate market.
Boutique hotel owners do not have to comply with the brand standards — which, for example, can specify the size and features of guest rooms — normally required by giant hotel companies like Marriott, Starwood and Intercontinental. Thus, developers can more easily convert an existing structure like an office building into a hotel.
In addition, John J. DePaul, executive vice president of development of Sonesta International, said he expected more opportunities for new boutique hotels as existing hotel owners, still struggling in a slow economy, defaulted with their lenders. “As defaults continue to swell,” he said, “it will be less expensive to convert existing hotels to boutique hotels than building brand new ones.”
Boutique hotels can also charge relatively high room rates, making them attractive to owners, Mr. Hanson said. Travelers, he said, were often willing to pay more to stay in a boutique hotel and “experience something different.”
Although revenue per available room at boutique and lifestyle hotels fell by about 30 percent from the third quarter of 2008 through the first quarter of 2010, compared with a 20 percent drop for all hotels in the United States, it bounced back by about 10 percent last year, exceeding the 6 percent rise for all hotels, Mr. Hanson said. And he estimated that revenue per available room for these hotels would jump another 12 percent this year.
Offerings from the new boutique brands will vary, and many are still in planning stages.
Mr. Schrager said the less expensive of his new brands would offer “affordable luxury and cheap chic” and the more expensive one “modern luxury.” The only new boutique project he has announced is the renovation of the former Ambassador East Hotel in Chicago, which will reopen in September as part of his less expensive brand.
Mr. Schrager, who is considering opening his new boutique hotels in major business travel destinations like Chicago, New York, Miami, Los Angeles and London, said he could “take more chances, more risk” with them than he did with the Edition hotels that are managed by Marriott.
“Good design is not enough any more,” he added, especially since business travelers “will not tolerate bad service. They require functionality.”
How well these new hotels will do remains to be seen.
They face a number of incumbents, which, besides Edition, include Starwood’s W brand; Andaz, from Hyatt; Indigo, from Intercontinental; Ascend, from Choice Hotels; Kimpton’s Triton, Monaco and Palomar brands; and smaller brands like Thompson, Balazs, Morgans, Nylo, Ace and Gansevoort.