On the Road Again

by Michael Schneider Email this blog to a colleague

B eing that boutique DESIGN is the authority on the boutique niche, I had to check out the first annual Lifestyle/Boutique Hotel Investors Conference. Held at the Fontainebleau in Miami Oct. 12 to 14, the better-than-expected attendance paid an optimistic tribute to what is already a hot trend in hospitality.

There was plenty of discussion about what exactly a boutique/lifestyle hotel is. It is original, it is experiential, it is timeless design and it's not necessarily small anymore. F&B is a critical component in a boutique.

The reasons for investing in boutique hotels are that there is potential for a higher rate of return, good diversification, and of course, to feed your big ego (they're fun to own and also be a guest!) Maybe the most important reason is: boutiques are niche properties that don't have to deal with brand rules (except in the case of branded boutiques).

The naysayers complained about "Architectural Fantasy" where there is a disconnect between the owner and developer with regards to the indigenous environment.

Almost everyone spoke of alternative local and regional lending sources. One tactic that Kimpton has taken advantage of is the historic tax credit which has amounted to 20 to 30% of development costs. Inevitably, conversions and consolidation will continue in this segment as properties struggle to stay alive.

Perhaps the most poignant talk was the keynote by Cheryl Rowley, Principal of Cheryl Rowley Design. She spoke of the “emotional design” approach of boutique properties, taking her earned credit for Kimpton's slogan “Every hotel tells a story.” She went on to say, “Fortune favors the bold.” Cheryl explained why boutique hotels are doing better than the rest: they have enhanced loyalty from their customers and they have a lower cost to own and operate. She referenced Tom Watson saying, “Good design is good business. Good design doesn't have to cost a lot of money but it does have to be smart.”

“Boutique design contributes to the education of the consumer. Boutique design has always been about innovation. Boutique design connects to our senses and good design sets your property apart.”

I couldn't have said it better myself!