If your friend David tells you that he has booked a boutique hotel for his trip to Rome and you think that he is going shopping, do not miss this post where we will clarify this, sometimes, puzzling hotel-category nomenclature.
Traveler preferences evolve and so do their perceptions. In the last few years, the hospitality industry has responded to these changes by developing new accommodation products that seek to fulfill customer needs. As a result of this trend, new concepts have been coined to define each market niche more clearly::
- Boutique hotels: properties boasting a unique style, based on design, either independent or linked to a smaller-brand system
- Lifestyle hotels: franchised products aimed at reflecting current trends (or lifestyles).
- Soft-brand hotels: independent properties that provide owners and operators with the opportunity to join a renowned distribution chain, keeping their unique design, name and target.
As mentioned earlier, these three confusing terms – boutique, lifestyle and soft-brand – are a response to the ever-changing customers’ needs. Boutique hotels arose after many years of standardization in the hospitality industry in an effort to differentiate themselves from large hotel chains. In time, these large hotel chains saw the opportunity to incorporate the boutique concept and developed two corporate strategies based on differentiation: lifestyle and soft-brand. Large hotel companies used the lifestyle brand to distribute their own brand experience and culture whereas they saw soft-brands as an opportunity to benefit from the market share of previously created boutique hotels.
Boutique is a term used to describe exclusive environments, usually characterized by the presence of luxury or special traits that are specific to a very particular clientele. A boutique property is a small and intimate hotel, elegantly designed, and boasting a personal touch. It is unique and can be easily singled out from other hotel brands. Moreover, it is loyal to its tradition and provides excellent and totally tailor-made service to its guests. These properties are usually found in trendy, urban locations.
This pioneering segment boasts the fastest growth rate since its birth in the 70s. In fact, it is the segment that has generated the greatest income per available room in the last few years, gaining the trust of real estate investment in the U.S.A. This is mainly due to the flexibility offered by boutique hotels which also ends up being an advantage over traditional properties.
In order to lure customers seeking exclusivity, hotel chains have developed their own lifestyle brands incorporating many elements traditionally associated to boutique and design hotels. All the major hotel groups seem to have jumped on the bandwagon: in general, lifestyle hotels offer easier access to products traditionally associated to the “boutique” concept.
This relatively new-coming player in the hotel market is becoming quite powerful in the hospitality industry. The availability of income-generating opportunities provided by facilities such as urban bars or cafeterias, meeting rooms available to locals or small spaces for special events play in their favor. The common denominator, however, should be exclusive service. Some examples are Marriott’s Edition, Hyatt’s Andaz, Starwood’s Aloft or IHG’s Indigo.
These are highly independent, low-profile establishments that have joined a large hotel chain to benefit, for instance, from their loyalty programs. In spite of their independence, they operate under the umbrella of a renowned world brand. This is the key concept for this type of establishment: the uniqueness and customization of a small boutique hotel, combined with the marketing and financial power of some of the greatest world brands.
Although they are similar than boutique hotels, in that they keep their charm and independence, they are part of a brand that manages their distribution, sales, marketing and loyalty programs.
Some examples are Marriott’s Autograph Collection, Hilton’s Curio, Starwood’s Tribute or Best Western’s BW Premier Collection.
There is no more liberating feeling than independence: not being indebted to payers grant lone operators the autonomy required to create their own identity and define their style. This leads to the type of individuality and customization that make the Lifestyle sector really shine.
It is needless to say that independence also brings about greater risk; when facing the dilemma of becoming a soft-brand or going bankrupt, closing or being taken over by a super brand, there is no doubt what the decision will be.
The future will tell whether soft-brands will withstand the test of time or follow the path of many other past, hospitality-industry fads. Nonetheless, one thing is for sure: the magnetism of truly independent hotels continues to grow every year.