What Does The Future Hold for Boutique Hotels?
PHOTO: Mike DeFrino and Joel Eisemann talk about the partnership between Kimpton and IHG. (Photo by Ryan Rudnansky)
The boutique hotel movement, which began its rise stateside in the 1980s, has not only proven it's staying power, it's show tremendous leaps in popularity over the ensuing decades.
Now, the boutique hotel is mainstream. While that proves the boutique hotel concept is relevant on a grand scale, it has presented boutique hoteliers with a host of new challenges.
For one, how does a concept based on intimacy serve a growing number of guests while still maintaining that personalized service?
Secondly, a growth in occupancy naturally means boutique hoteliers must start think about expanding if they want to capitalize on the boom. But how does a boutique hotel company do that without sacrificing what made it so special in the first place?
In short, how does the boutique hotel change to meet the needs of today and tomorrow while, well, not changing too much? The guest experience has always been a defining characteristic of boutique hotels. But it’s one thing to cater to a niche audience—it’s quite another to cater to the general population.
At the third annual Boutique & Lifestyle Lodging Association Boutique Hotel Investment Conference in New York City on June 3, boutique hoteliers agreed on one thing in particular: That unique feeling of a boutique hotel has to be preserved moving forward or it strips the boutique of its appeal that drove it in the first place.
This can be difficult, given rising costs and an increase in guests to serve.
The partnership between global hospitality brand InterContinental Hotels Group (IHG) and popular boutique brand Kimpton Hotels & Restaurants is a major story in this regard.
You only had to look at the concern expressed across the country on social media platforms following IHG’s acquisition of Kimpton in December to understand just how important it is to guests for boutique hotels to remain who they inherently are. There was widespread reaction, with many worried that a major company like IHG would ruin Kimpton’s reputation of excellent personalized service and intimacy.
Mike DeFrino, CEO of Kimpton Hotels & Restaurants, and Joel Eisemann, chief development officer of the Americas for IHG, both spoke side by side at the BLLA Boutique Hotel Investment Conference in NYC to address these concerns head on.
During the session, DeFrino assured attendees that Kimpton properties will still be led by Kimpton’s design and culinary teams, employees will still be Kimpton employees and both parties want to “keep the Kimpton spirit alive.”
He stressed that integration teams were set up from the beginning to help the partnership run smoothly, and that the partnership is truly a two-way deal: IHG acquires a highly successful and historic boutique brand, and Kimpton benefits from IHG’s reach and wide-ranging programs.
Eisemann echoed these sentiments, noting that Kimpton received offers from various other companies and there was a reason why Kimpton ultimately chose IHG.
Eisemann said that Kimpton really looked into the “style” of IHG, as well as the company’s relationships with its guests and employees. DeFrino also spoke with boutique hoteliers within the Kimpton family to get feedback on the potential acquisition before the deal was made.
At least for now, Kimpton Karma, Kimpton’s acclaimed loyalty program, remains. During the conference, Eisemann said the hope in the future is to “tap into” IHG’s loyalty program, IHG Rewards Club, and “use it as an engine for Kimpton Karma.”
Eisemann stressed that IHG has recognized the “overwhelming feedback” to keep Kimpton the same, and feels the partnership is “a great fit.”
With IHG’s help, Kimpton is looking at future locations in Mexico City, London, Hong Kong and Bangkok, with a focus on Asia and Europe.
Of course, that’s easier said than done.
Constantine Dimas, SVP and CBO of The OE Collection (a division of Loews Hotels), said during the conference that one of the biggest challenges when expanding—particularly when it comes to boutique and lifestyle hotels—is distributing in different markets effectively because every market has its own “secret sauce.” That is, even when it comes to a specialized concept like the boutique hotel, guests’ desires can differ around the globe. The boutique hotel guest generally has similar interests, but it’s important to note these are also entirely different cultures we’re talking about, too.
In terms of where boutique brands are expanding, it’s not just about major tourist destinations such as Hong Kong or London.
Jason Pomeranc, CEO of The Pomeranc Group, noted that boutique brands are experiencing great demand from guests in secondary and tertiary markets such as Portland, Oregon, and Austin, Texas these days.
So, what can guests expect from boutique hotels in the future?
Well, for one, that personalized service has not been forgotten, judging by comments made by hoteliers at the conference.
Specifically, there are a number of intriguing offerings guests should look out for.
Red Lion Hotels, for example, is building its boutique properties based on “the Pacific Northwest lifestyle,” aiming to create “an authentic feel” for the “millennial mindset,” said Greg Mount, president and CEO of Red Lion Hotels. The chain has also introduced a new straightforward, retail-based rewards program called Hello Rewards that offers members a free night for every seven nights booked, plain and simple. Its lobbies are even changing, featuring their own cafes and French presses guests can buy and bring up to their rooms.
BD Hotels, the largest independent hotel owner and operator in New York City, is focused on being “earthy and genuine,” said Richard Born, principal of BD Hotels. It will continue to expand its pod hotels, which were originally designed for millennials but have—interestingly enough—taken off with all age groups.
As Born noted, these days, “There is no such thing as a millennial hotel product.”
And as boutique hotels look to manage costs even more, guests may start seeing more boutiques made from renovated buildings instead of brand new buildings. There’s less competition when looking at older properties, Born said, and development can be cheaper and faster.
Born said BD Hotels is “off to the races” in building a chain.
Of course, technology will be a driving force moving forward, Pomeranc said. That includes allowing for building and the development of programs to be cost-effective, as well as accommodating the growing number of mobile devices in guests’ hands.
And you may see the number of rooms being less of a defining factor for boutiques, too. For example, the traditional boutique hotel is generally characterized as a hotel that has 200 rooms or fewer. Yet, properties such as Delano Las Vegas—which has more than 1,000 rooms—are beginning to break the mold.
But ask hoteliers to summarize the boutique hotel of the future in a nice, neat little box, and, well, it wouldn't be a boutique hotel if it could be summarized in generalizations.
“You shouldn’t be able to summarize a boutique hotel quickly,” Pomeranc said. “It has many layers.”
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