|by Rick Swig - 1998
New development is a natural event in strong markets with high demand.
The hotel business today seems to be edging into that cycle with strong
performance in both urban and resort locations. The new cycle will
include the development of both franchise branded hotels of all sizes,
shapes, and products, plus there will also be a place for the new development
or redevelopment of boutique independent products.
Although recent development has been focused on branded products, there
has been a high degree of success for the small and independent boutique
hotel or resort. There continues to be a consumer segment that demands
a special and differentiated product to suit their individual needs.
This article provides an overview of the elements for success and/or survival
of a boutique hotel or resort.
The basic mantra of developing a successful boutique hotel or resort
Boutique hotels and resort must fill a special need or provide a unique
environment to successfully attract customers away from traditional and
more familiar brands.
“Is there a niche? .....Can it be filled?”
Unique attributes and environments aside, the success of boutique hotels
begin with the same fundamentals that lead to the success of other hospitality
Probably the keys to establishing whether to build or buy a boutique hotel
or resort include:
Clearly defined marketing and effective distribution/reservations coverage.
Asking “why” a hotel or resort should exist in the first place might
consider the following:
The ability to ask “why” the hotel or resort should exist in the first
The determination of what market or customer needs are satisfied by its
Then comes the query, what good is a hotel or resort if no one needs it,
or put more diplomatically, does the hotel or resort fill a need for a
specific customer or market segment?
Does the hotel or resort or its location offer any unique or special attributes?
Is the hotel or resort able to support the delivery of the product as promised,
whether those are oriented to the corporate or leisure traveler and have
a service orientation towards business or recreation.
Is the location accessible or convenient to targeted customer markets?
(For example, for resort markets the question would relate to adequate
air lift or other access into the destination, or as Peter Yesawich promotes,
is it within 3 1/2 hour travel time from high density markets?).
Is the destination attractive during multiple or extended seasons to allow
high occupancies throughout or in most of the year, if not every day of
If a significant market segment, constituency, or customer base is resolved,
then more specific needs for those targets must be determined based on
their special interests, such as:
Is the hotel or resort oriented towards an underserved constituency in
the competitive marketplace? This constituency might be cultural,
social, or spiritually based, as opposed to the traditionally defined groupings
such as business, leisure, group, or family.
Does it fill a need for customers with special interests or requirements?
Once again the relationship to this question may be non-traditional and
require “out of the box” thinking towards more intellectual or demographic
Is there an appeal to customers seeking an “alternative” to the traditional
norm? Given the alternative products as presented by Ian Schrager
hotels in New York, Miami, and Los Angeles or the Hard Rock Hotel in Las
Vegas, there are customers looking for something different.
An existing or potential boutique hotel or resort owner must consider their
own basic “needs” as well. This is a mixed bag of considerations
Recreational activities, i.e. adventure or not, physical or passive
Business products, i.e. not only computer ports in guest room telephones
but dedicated ISDN lines or easy Internet access opportunities.
Social preferences, (what is the peer group or crony factor?) Many
customers are concerned with fashion and the “right” place to stay.
Environmental surroundings, which would include the attitude of the
hotel(customers and staff), or possibly spiritual considerations for personal
enrichment as well as physical factors for just plain enjoyment.
The “special” experience. The ability for a customer to feel a unique
A quality product, which is directly associated with price/value and general
Marketing an independent boutique hotel or resort can be difficult,
as there are generally severe restrictions of financial and other resources.
The lowest common denominator of marketing a boutique hotel or resort is
really “sending a message” to those who are interested or should be.
The real basic issue here is story development, which relate back to the
special nature of the experience, location, or environment.
The unique, clear, and easily related story must then be delivered through
effective and affordable channels, which would lean heavily on allied special
interest groups or markets with a heavy peerage factor.
The capacity to identify their hotel or resorts competitive advantage or
true differentiating characteristics that will allow the location to be
visible to a market with multiple options
The ability to define a market or customer base with “needs”, which match
the product opportunities offered by the hotel or resort
The assurance that there is enough of a market or customer base with “needs”
to create enough demand for the survival of the hotel or resort
The potential to deliver on customer expectations
And if all of the above can be achieved, then what about the opportunity
of making money and returning adequately on the investment of time and
Outside of direct mail or direct sales or impacts on affinity group
travel planners or peer groups, the most effective and powerful medium
is the press. In effect boutique hotel or resorts and the press have
something deeply in common.....they are both trying to attract consumer
attention by displaying special interest products.....the greater the special
interest, the great potential for attention from an intrigued body of customers.
Once the message is sent, capturing the response becomes the priority.
Today, a boutique hotel or resort operator must anticipate customer buying
habits - both traditional and non-traditional - and manage their distribution
activities well, whether this means:
When all is said and done, success in the boutique hotel or resort business
comes down to some clear conclusions:
Answering the telephone
Yielding E-Mail from the Internet
Utilizing the distribution channels of affinity groups, such as marketing
associations, representation firms, or visitor bureaus.
From a developer or owner’s standpoint there is an ultimate gut check...the
risk and willingness to be different and reap extra value from a marketplace
with changing needs, preferences, and fashions. A bold concept for
Defining the hotel or resort’s purpose and niche
Developing a quality product targeted to an underserved customer base
Conveying a clearly defined and interesting message to the target segment
And assuring that once all of the above is done that too much development
money has not been spent and a product can be delivered to actually allow