Lifestyle 'Select Service' Brands: Oxymoron or Groundbreaking Concept?
By Steven Marx Managing Principal, Lifestyle Hospitality | October 28, 2008
Full Service, Luxury, Limited Service, First Class, Select Service, Focused Service, Extended Stay, etc, etc.
The industry, as well as the hotel rating agencies and internet intermediaries, have managed to create a sufficient number of "classes" of hotels to not only confuse their guests, but the hotel companies themselves. And depending on to whom you talk, everyone has a different interpretation of what each of these classes mean. Then you add in 4-star, 4-diamond vs 3-star/diamond; we toss those ratings around when describing properties, not even referring to their "official" rating by Mobil and AAA. How many of us have fought with Priceline.com about their classification of our hotels, which directly affect a significant amount of potential revenue?
And then we come to boutique hotels; the confusion around what classifies a boutique hotel makes the issue with "conventional" hotels look like a walk in the park. Those of us in the boutique/lifestyle end of the business have been struggling with this challenge every since the term became popular in the early 1980's. What's most aggravating is that despite the growing popularity and numbers of boutique hotels around the country, and the world, hardly any of the rating agencies and intermediaries have created a separate class for them. Even worse, a boutique hotel could be beautiful, upscale small hotel, with excellent service levels and food and beverage operations; but because it may have been created from an older building, with inherent limitations on room size and configurations, not-quite-totally modernized HVAC (but comfortable enough for most guests), and other issues, the property could end up becoming rated as a "3-diamond" hotel, or its equivalent. Thus, a boutique hotel could arguably provide an experience that would be competitive with a Ritz Carlton, or certainly an "official" 4-diamond Westin, and yet be rated below those properties, just because their product and physical attributes don't fit into the boxes that the agencies/intermediaries have created for classification purposes.
Not only does this issue seriously impact potential revenue through creating in some cases arbitrary ceilings on relative ADR's against their local competitors; through unfair and even inaccurate guest pre-conceptions about the product; but even more importantly, by not offering a boutique designation, many guests who seek boutique hotels wherever they stay cannot find them, unless they know of a specific boutique hotel in which they've stated, or identify them through word of mouth, adverting, or Public Relations.
Another problem is that Smith Travel as of yet does not have an official classification for boutique hotels. This is not so much problematical in picking a competitive set in a city in which a boutique company operates; as the local management team will know the hotels in their backyard, and can select the true boutiques for their comp sets if appropriate. The challenge is not being able to run custom reports on the performance of selected boutique hotels as a group, nor to be able to index your own company's performance against boutique hotels at large, either regionally or nationally.
This situation, of course, has somewhat less impact on what are now recognized boutique/lifestyle brands. However, even the largest soft-branded boutique hotel company, Kimpton, without the name recognition with the general public that brands like W have, theoretically is at a disadvantage. W overcomes potential ratings issue with its Starwood affiliation and highly successful marketing program; W guests don't really care what the properties' ratings are.