Top 10 Reasons Why You Should Develop a Boutique Independent Hotel

BY SAMUEL TROTTER 

Trying to decide whether or not to go independent or with a brand?  Here are the top 10 reasons why you should reconsider that tired old brand and make your mark on the world….

1. Franchise fees: An independent property won’t be paying franchise fees. How much does this cost? According to the HVS 2013 Franchise Fee Guide, up to 17.2% of room revenue. Not profits, room revenues. This is big money. How much business will the brand actually bring? In fact, Marriott’s own “boutique” hotel is outperforming all of its other brands on RevPAR except the Ritz Carlton (Source: HVS – Marriott Brands Performance Update).  
2. Use of technology: Now there is a better line of communication between you and your guest thanks to vanishing travel agents, online search engines and websites dedicated to helping consumers find their next place to stay. The mass marketing of brands may not be necessary for your property. Tripadvisor.com is the largest travel website with over *40 million unique visitors per month. You property willbe found. *Source: comScore Media Metrix, Worldwide, August 2010
3. Incentives are equalizing: With Stash Rewards, consumers are no longer tied to one brand to accrue points.
4. Old or historic properties: They lend themselves better to boutique hotels where uniqueness is celebrated, odd floor layouts embraced. Adhering to a brand’s standard here could be costly and difficult in itself.
5. Targeted niche markets: Boutique Hotels are reflective of today’s celebration of individuality.
6. E-commerce: Online travel agencies such as Orbitz and Expedia have replaced travel agents, your website can replace them. Our group has been able to reduce our reliance on online travel agencies to as little as 15%, having the property take in as much as 85% of the total business in house. This greatly reduces expenses and adds directly to the bottom line.
7. Higher rates: In many markets boutique concepts are able to command better rates than branded properties with similar amenities and room sizes simply because the consumers they cater to want to “experience something different.” Real Estate Weekly’s article, Boutique Hotels Reaching New Height writes, “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 is why the big brands are all developing boutique brands. Source: The Rush to Boutique by Jane Levere of The New York Times
8. Boutiques are growing by as much as 10% in the next 10-15 years. They will go from making up 3% to up to 6% of all hotels in the United States. Source: The Rush toBoutique by Jane Levere of The New York Times
9. Happier neighbors: In our experience, boutique hotels have been better embraced by their neighborhoods than their branded counterparts. They tend to blend in with the community, offer high quality dining and bring up local real estate values.  
10. Proud ownership: Boutique hotels are a reflection of their owners. Nothing can replace making your own mark.