The most recent version of the story, albeit mostly paraphrased, goes like this: the late Steve Rubell and partner Ian Schrager in 1984 were gearing up for the opening the first Morgans Hotel in New York City. As interest was drumming for the opening of the hotel, Rubell was being interviewed by local press and the reporter began asking questions about the hotel, wanting Rubell to describe it or compare it to a similar hotel in the area. Rubell couldn’t find the right words to describe what the first Morgans Hotel would represent but instead was able to paint a picture for the inquisitive journalist.
“You can go clothes shopping at Macy’s or you can go clothes shopping at one of these small boutiques in New York City,” Rubell reportedly said. “This hotel is going to be like the boutique of hotels.”
From there the term “boutique hotel” was born … and from that point forward it would be described differently by every single person you come in contact with even to this day.
As the concept of U.S. hotels providing a unique, personalized experience became more popular, the concept of the boutique hotel became more mainstream, and therefore by definition less representative of a true boutique. Today, boutique hotels can have anywhere from eight rooms to 600 rooms and, believe it or not, can even come with blueprints that specify how much real estate will be required, how big the rooms will be, what amenities will be included and even what colors will be used in the lobby.
Hearing hoteliers attempt to define it Thursday at the Lifestyle/Boutique Hotel Investors Conference in Miami was interesting, to say the least.
Richard Kessler of the Kessler Collection: “Boutique is four-star plus and should be small, they should feel unique, they should have history. Lifestyle hotels are built to capture popular trends and also living styles.”
Tim Miller of Edition: “People had a hard time saying a 400- or 600-room hotel could be a boutique hotel so lifestyle was born, although it was never about the size but more about unique, catered experiences.”
Good attempts, but still highly inconsistent.
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So what has happened, because of financial constraints and the need for strong marketing and reservation systems, is that tackling a truly boutique hotel project has become nearly impossible and instead the industry is slowly replacing them with fee-based collections and an oxymoron of a term if I’ve ever heard one—branded boutiques.
Now don’t take that the wrong way—I personally love brands like Hotel Indigo, NYLO, Edition, Andaz and the like. The move away from cookie-cutter boxes to differently designed, high-energy hotels with customized experiences and hyper-personal service was fantastic and right on target. But those aren’t boutique hotels. They might not be Macy’s, but they’re no more the one-off shop on the Upper West Side than they are an Urban Outfitters.
Richard Millard, CEO of Trust Hospitality and Desires Hotels, put it best. Relating hotels to the independent restaurant concept, he said independent chefs with spirit and uniqueness have no capital to start a restaurant.
“The people who give a damn about restaurants don’t have credit or money,” he said. “The people who have credit and money end up creating a Capital Grill for your hotel.”
And that’s what it all comes down to, right? The movement toward branded boutiques and collections of boutique hotels backed by a brand—such as Autograph and The Ascend Collection—comes down to investors wanting the same things they want from branded hotels: performance and returns.
“As the industry is progressing you can be part of a brand that represents a new way of doing things,” Miller said. “At the end of the day, it’s all about the bottom line.”
Kessler, who’s eight previously independent hotels joined Marriott International’s Autograph Collection in January of last year, told me his hotels pay half the franchise fees of a typical brand and have also been able to cut in half commissions with third-party distributors.
“There is money sitting on the sidelines, but they’re looking for returns,” he said. “The relationship with Autograph has helped with the perception that there is marketing support behind what you’re doing.”
But the evolution of the boutique hotel, in my opinion, has not come without some concessions.
“The minute you try and brand boutique hotels, you put a cap on the rate and you make all the lobbies the same,” Millard said.
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