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Boutique Hotel Performance Versus Traditional Brands

January 22, 2014 By Sam Trotter 4 Comments

According to a recent article by Real Estate Weekly titled, Boutique Hotels Reaching New Height:

At the national level, boutique space reflects an occupancy premium of approximately 13%. The boutique sector also exhibits strong growth in RevPAR. In 2012, 2013, and 2014 RevPAR is trending at 6.3%, 7.4%, and 8.8%, respectively, exceeding national averages, for the sector at large, in the last two years.

The demand in growth for boutique rooms is predicted to exceed the growth for traditional hotel rooms and the growth in demand for boutique hotel rooms will continue to exceed the growth in supply through 2015 with RevPAR premiums continuing through 2017.

This does not come as a surprise to us yet we often argue with potential boutique hotel owners over the benefits of going independent.  While it feels daunting competing against the likes of Marriott and Hilton, independent hoteliers like Boutique Hospitality Management are successful everyday in major markets.  In fact, the demand for the independent hotel is only increasing.  Entrepreneurs everywhere are answering the call.  Today only 3% of the hotel market is made up of boutique hotels yet 10% of upcoming supply consists of these hotels.  Thanks mostly to the digital advances that have leveled the playing field, our guests often are making a decision between “an experience” and points.  Thinking about the practicality of the latter, we pick the experience guest everyday.  Unfortunately for brands, even that has been leveled with independent hotels banding together to create their own point system. They’ll be more likely to experience the spa, bar, restaurant, pool, golf course, etc.

More Information: Real Estate Weekly | Boutique Hotels Reaching New Height by Andrew Posil

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Filed Under: Hotel News and Announcements Tagged With: boutique hotel, brand, demand, performance, RevPAR, supply

About Sam Trotter

Samuel Trotter is Director of Development and eCommerce for Boutique Hospitality Management. Trotter also writes for hotelnewsnow.com on how technology is impacting hotels, usually from an ecommerce perspective. Trotter came to know Keith Space from his time working for The Angler's Boutique Resort in South Beach. The property was hugely successful, jump starting his career. Trotter writes and speaks on eCommerce and hotel investment and is a major player of the BHM team. Continue the conversation with Trotter on Twitter @Sammy_Miami.

Comments

  1. Hannah says

    July 22, 2014 at 5:35 am

    A really interesting post Samuel and it will interesting to see whether boutique hotel rooms will exceed the growth for traditional hotel rooms. How long before you think we will see this switch? I know that boutique hotels are becoming increasingly popular because they offer a unique interior and tailored services. Your stay becomes an experience. The prices used to be a problem but do you think boutique hotels are becoming more budget friendly?

    Reply
    • Sam Trotter says

      July 22, 2014 at 10:04 am

      Hannah, there are currently numerous budget friendly boutique hotels coming into the market. You see unique concepts turning up everywhere even in places like the Atlanta Airport where a Yotel is planned. In regards to boutique hotel rooms exceeding the demand for traditional hotel rooms, it doesn’t seem likely as financing is more widely available for traditional hotels and now small boutique hotel chains are getting bigger and turning into a more traditional model.

      Reply

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