New Delhi, Aug 05: Times are-a-changing and the latest entrant in accommodation business is the boutique hotel, offering rooms with personality. The industry, on a downturn for the past year, is recognising the revenue model of boutique hotels. They are the solution to falling occupancies and revenues. Though the concept is relatively new in India, boutique hotels, for example in the US, contribute one per cent to the number of rooms, but have a high three per cent share of revenues.
By definition, boutique hotels tend not to exceed 150 rooms and are styled in a contemporary manner with each area of the hotel having a distinct look or style. They differ from branded hotels, which offer a uniform look and feel across their chains.
An increasing number of travellers are now preferring properties that are noticeably different from branded hotels. Boutique hotels generally target customers who are in the age bracket of early 20s to mid 50s with mid-to-upper-incomes. Room rates in such hotels tend to be in a higher bracket than chain hotels of the same category.
Such hotels can survive and succeed without such costly amenities as restaurants and meeting spaces as they can bring significant additional profitability to hotel room revenue with their style.
According to Le Royal Meridien general manager Julian Groom, boutique hotels offer unusual and distinctive design elements, attention to luxurious comfort, an intimate touch and personalised services. “By knowing our customer personally, we use the small size to our advantage. The size doesn’t allow loitering travellers, giving the guest the feeling of being in a home away from home,” he said.

An Indian Hotels Company Ltd (IHCL) official commented that the concept of boutique hotels had a lot to offer in terms of revenue models. With the location playing an important role in the success of such hotels, the official added, “the concept of a boutique hotel in India, though in our opinion, will be restricted to cities. Corporates tired of living in clinical environment, appreciate the personalisation that boutique hotels offer. They believe that it offers value for money,” he said.

Once established, boutique hotels also tend to have a higher percentage of repeat business compared to the industry in general, which may reflect a smaller degree of volatility when going through difficult economic times.
Such hotels usually find success in cities with vibrant economies and high-end residential areas, but bland, characterless hotel inventories. “The concept of boutique hotels in India, in my opinion, will be restricted to the business travellers. I don’t see the concept catching on in the leisure and luxury segments,” said the IHCL official.
Brands in the international market of boutique hotels are Encore (Marriott group) and W (Shereton group). Players in the Indian market also include Carlson Hotels Worldwide and Park Hospitality.