Boutique Hotels Brave Business Traveler Backlash

While boutique hotels have been promoted heavily as an alternative to traditional upscale and deluxe business hotels—becoming known for their carefully cultivated hip image, their cutting-edge design and hot bar scene—they've also been faulted for focusing too narrowly on appearances and too exclusively targeting a young demographic. In fact, traditional hoteliers, while acknowledging that boutiques have drawn valuable attention to deluxe hotels overall, said this new crop of hotel too often lacks a commitment to guest service, which high-level business travelers expect and rely on.

While the boutique backlash has been growing, it has intensified in the past few months as U.S. hotel occupancy rates and room revenues have fallen in many of the same gateway cities where the boutique concept has flourished. All segments of the lodging industry have experienced declines nationwide, yet the drop has been most pronounced in the upper upscale category. In July, for example, preliminary data compiled by Smith Travel Research indicated that room revenues in this category fell 8 percent to 10 percent over the prior year, compared with 3 percent to 5 percent across all U.S. hotels. The disparity in the drop in occupancy was almost as severe.

In light of these declines, it's become more important than ever for hotels to be included in buyers' hotel programs as a way of attracting business travelers, a market segment that continues to be lucrative for hotels. Hence, competition has grown intense, which, to some degree, explains the boutique bashing.

For buyers, much of the decision for including hotels in their programs still depends on a combination of location, rate and quality. When availability of rooms was a pressing concern, buyers were more likely to add properties in a destination—small boutique hotels as well—to give them the coverage they needed. With availability suddenly less of an issue, buyers can focus more closely on such things as enhanced levels of service.

"The boutique designation has quickly become overused," said Peter Tyrie, president of the Eton Town House Group, a collection of small hotels in London. "It may have started in the United States, but has spread to international destinations. For a hotel, it's a way of marketing yourself because it comes with so many specific associations. In fact, we're almost to the point where the word 'boutique' has come to have the power of a brand in and of itself."

At their best, boutique hotels have good internal processes, plus individual flair. "Individual flair reflects the location, style of product and hotelier," said David Pantin, U.K. managing director of Rocco Forte's new RF Hotels.

Much of the fashionable appeal of boutique hotels derived from their small size, but even this is a relative value. "In Europe, we see boutique hotels as being considerably smaller—25 rooms maximum," said Alexandre Scarvelis, general manager of the Hotel Pont Royal in the Saint Germain des Pres section of Paris. "As U.S. hotels are often much larger, Americans can view a hotel with 75 rooms as a boutique."

At the opposite end of the spectrum, U.S. hotel operator Ian Schrager told Business Travel News this year that he considered his new 1,000-room Hudson Hotel in New York a boutique. "Boutique has nothing to do with size. It has to do with attitude and approach," he said (BTN, March 26).

But questions remain if a hotel of 1,000 rooms can provide truly personalized guest service on that scale. "High-end guest service simply translates into accommodating guests' every need and exceeding their expectations," said Volker Ulrich, general manager of the Pan Pacific Hotel San Francisco. "Yet, there are no standard definitions to providing high-end service since each property attracts a different clientele with varied expectations."

With their emphasis on style and fashion, what often suffers at boutique hotels is the staff-to-guest ratio. "A high level of guest service is easier to achieve with a larger number of staff," said Virginia Masser, deputy general manager of the Royal Garden Hotel in London. "In boutique hotels, staff frequently have to carry out many tasks, which they are not always fully trained to do."

Ulrich agreed staffing was crucial—in attitude as well as in number. This is in contrast to fashionable boutiques, where staff members may be dressed in Armani, but not understand the fine points of personal service.

"Anticipating guests' needs entails empowering your associates to act with good personal judgment in assessing and responding to guests' requests in a timely fashion," the Pan Pacific's Ulrich said.

The greater the number of staff members, the faster a response is likely to be. "When I think about the roles of the concierge and the butler, response time is critical in responding to requests from individual business guests," said Duncan Palmer, general manager of The Connaught, one of The Savoy Group hotels in London. A call button system introduced in guest rooms at the property this summer is intended to ensure that a staff response is quick and unobtrusive.

One challenge for traditional business hotels that emphasize guest service is ensuring it's appropriately low-key. "If you're not careful, these amenities can become overstated," said the Eton Town House Group's Tyrie. "Business people want service that's effective, but not in your face."



Hotels Prioritize Appearance

Many boutique hotels—though hardly all—are constructed from historic buildings, which may or may not have been originally built as hotels. "They want to make the statement that some progressive thought went into their planning, that they're anything but mundane," said Thierry Roch, Washington, D.C.-based executive director of Historic Hotels of America.

Ulrich, however, referred to boutique restorations generally as "rehab projects." In many cases, what starts out a faithful restoration ends up a compromised effort as developers emphasize hip veneer over historic charm.

"Contrary to the trendy boutique approach, our business guests really respond to the authentic detail that's embodied in our building going back centuries," said Adrienne Clark, director of marketing for Luttrellstown Castle, a hotel and meetings facility outside of Dublin. "At the same time, there's very personal service to allow them to be as productive here as they would back in their offices."

Ideally, a property finds the right balance between old and new elements. "There's no reason why modern touches can't be tastefully and appropriately added to a historic structure," said Brenda McDowell, area director of sales and marketing for the Renaissance London Chancery Court Hotel, which opened this summer in a former insurance company building built circa 1914 in the city's Holborn district. While traditional in tone, the hotel does include a popular bar and lounge called QC.

Boutique hotels intentionally targeting a young demographic have both advantages and disadvantages. "The risk of targeting any one group of travelers is that, within this group, people have specific ideas of the type of hotel where they like to stay," said the Hotel Pont Royal's Scarvelis.

Yet, if a hotel is successful in attracting young clients, RF Hotels' Pantin sees nothing wrong with that. "Many people like to be associated with trends," he said. Trends, however, do go out of fashion. "This is where a timeless hotel product continues to attract a wide variety of business travelers," Pantin said.

The bottom line, though, is that hotels need to know their clientele, and travel buyers their travelers' tastes and preferences.

"Trendy hotels found a market niche that works for them," said Manfred Timmel, general manager of the Ritz-Carlton New York in Battery Park, which will open next month. "In our case, we're a contemporary hotel, but that hardly means we've abandoned our traditional high service standard. To the contrary, we know our clientele and our clientele demands it."