Boutique Hotel Sector to Explode!

The boutique hotel sector is set to lead the way as the UK hotel industry lurches into recovery. New research has revealed that boutique is the fastest growing hotel segment in London and is set to double in size by 2013.

Boutique hotels have undergone a period of expansion in the past few years and have proved resilient in the current financial climate – smaller properties commanding higher revenue per room have proved attractive to operators grappling with the economic downturn.

The trend is reflected in international markets where designer and branded boutique operations like Hotel Missoni (which opened in Edinburgh in 2009) are fuelling growth. For example, The Middle East’s hotel industry is now maturing and a need for high-end boutique brands has emerged. The US has also seen a great deal of activity with the likes of Ian Schrager, the pioneer of the boutique hotel, teaming up with Marriott International in 2007.

Boutique Hotels: The Need for Differentiation

With strong competition present in most markets, the boutique hotel sector needs to work harder to differentiate their hospitality product and experience.

A new report from HVS London suggests that boutique hotels should attract new guests with stronger destination dining concepts.

“We expect to see further partnerships evolve between chefs and boutique hotels in creating truly standalone offerings drawing in outside custom,” explained HVS London associate, Cristina Balekjian. “Such restaurants have a high revenue earning potential as well as priceless publicity for the hotel.”

“It is not uncommon for food and beverage revenue to account for 40-50% of total sales. So, aside from increasing revenues, such restaurants often act as strong marketing tools, elevating the hotel’s public image. In some instances guests book rooms to ensure ease of access into these areas and more boutique properties are likely to capitalise on this.”

Flagship Restaurants

To prosper in 2013, boutique hotels in the capital need to nurture world-class F&B concepts, earn Michelin Stars and partner with critically acclaimed chefs. This approach has already proved fruitful for the likes of Bethnal Green’s Town Hall Hotel – new guests have been attracted to Viajante, a design-led restaurant developed in partnership with Chef Nuno Mendes which has already earned itself a Michelin star.

Flagship restaurants reflect the boutique hotel’s offer of exclusivity – something that should be extended for frequent guests through exclusive guest-only areas or a private members’ club.

With phenomenal growth forecast by 2013, all eyes are on the boutique hotel sector … but can it perform?

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