Something as simple as an exposed brick wall can make all the difference.
Patrick O’Neil, executive vice president of operations at NYLO Hotels, said smart design choices - such as exposed brick walls in a ballroom - can evoke New York City’s Meatpacking District in the heart of suburbia to separate it from the beige boxes,
“We can go after the wedding market because we’re different,” he said.
The move is just one strategy that the boutique segment is using as it carves out its niche within the hospitality industry. Bringing urban design to the suburbs, investing in local brands and experiences and developing brands within brands were part of a recent discussion about the segment sponsored by the American Hotel & Lodging Association.
Kimpton Hotels & Restaurants is the largest boutique hotel company in the United States, with 51 properties in 23 urban markets. Ron Vlasic, Kimpton regional vice president, said that as Kimpton has grown, it has developed brands within its brand. Palomar, with eight properties, is largely new builds that target the high-end business traveler. Monaco, at nine properties, features historic buildings that evoke the world traveler experience. The company also has developed four-star and three-star collections of hotels.
Vlasic said the company pushes its general managers to run their hotels as if they own them. He said it inspires an individuality that runs through everything from the service to the marketing of a property.
While Kimpton focuses on urban markets, NYLO hotels are located in the suburbs. Instead of Dallas, NYLO has hotels in Plano and Irving, Texas. Its Rhode Island property is in Warwick, near Providence. But their loft-style rooms and urban design choices bring the feel of a city to guests, without the high room rates of major cities.
“When people walk into our hotels they feel like they got a deal,” he said. “We don’t drive huge rates and we’re not in big rate markets. … [For the Texas properties] there’s nothing around us that’s even close to us in the market - you have to go to Dallas.”
NYLO hotels share some commonalities, like its signature hanging chairs, but the local properties choose their colors and materials. Each hotel has local art, which the hotel solicits through contests, and features local music from up-and-coming bands. O’Neil described them as “people who need a break - just like we do, the little guys.”
The Big Guys are also playing in the boutique space.
Boutique is the fastest-growing segment of the hospitality industry, according to Janis Cannon, vice president of global brand management, Hotel Indigo.
IHG launched Hotel Indigo in 2005 to meet the demands of “a new emergence of an experiential consumer” that had been served by independent properties but not the large hotel chains, Cannon said. The brand launched globally in 2008 and now there are nearly 40 Hotel Indigos, with nearly 70 in the pipeline.
To illustrate the growth, Cannon pointed to New York. With one Indigo in Chelsea and one under construction in Bryant Park, IHG is looking to build four more in the city, she said.
IHG brought brand standards to the boutique experience. For Indigo, that means each hotel must tell a “neighborhood story,” defining the neighborhood as a micro focus on a five-block radius, instead of the obvious things about a city like the Brooklyn Bridge or the Empire State Building in New York. It fits with Indigo’s strategy of conversion and adaptive reuse. The hotels should fit into their neighborhoods rather than build “big iconic hotels that will stand out in a neighborhood.”
Cannon also cited an evolution of its food and beverage offerings. While some hotels may strive for local products, IHG requires it, asking the F&B team to have at least one local product in four food categories: protein, produce, coffee and alcohol.
The focus has been good for business. Initially, Indigo launched in the upscale space. But Cannon said it has moved into the upper-upscale space because customers were willing to pay more.
The economic downturn did not spare the boutique segment and may even have hit it harder, since it includes young brands trying to establish themselves.
NYLO’s financial partner, Lehmen Brothers, folded during the economic collapse when it was not bailed out by the government, so NYLO’s growth has stalled. O’Neil said its new strategy is designed for cost savings - moving from new builds to rehabbing historic sites that may allow them to pursue tax credits.
NYLO also is planning a sub-brand, XP by NYLO, a limited-service branch that would compete with brands such as Hyatt Place and Aloft.
“We get people into NYLO and they love it, but the food and beverage component scares them,” O’Neil said. “It’s a little labor-intensive.”
The financial environment also put a crimp in Kimpton’s deals. Instead of growing, it is focusing on maintaining the health of its existing hotels and not pursuing a global expansion.
When the economy recovers, though, Kimpton will have its strategy ready. Vlasic said growth will happen in secondary U.S. markets such as Nas
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Beth Kormanik
Editor
Hotel Interactive, Inc.
Bio: Beth Kormanik is managing editor of Buyer Interactive and editor of Hotel Interactive. She previously covered politics, government and higher education for the Florida Times-Union in Jacksonville, Fla. While at the Times-Union she won several state and regional awards, including the 2008 Freedom of Information award from the Florida Society of News Editors and the top honor in the 2007 Florida Bar media awards for large newspapers.