Boutique Hotels: Rethinking the Fundamentals in a New Business Environment

By Brenda Fields Founder, Fields & Company | March 06, 2010

The cost effectiveness of technology, coupled with its global reach, has contributed to the new hotel environment. With the encouraging business outlook, hotels are now, more than ever, in a position to assess the new business environment and to establish a strategic business plan which incorporates these changes and are designed to grow and adapt to changing market conditions.

Technology has brought numerous advantages to conducting business, including servicing existing customers and in reaching new markets. But as a service industry, it is important to ensure that technology is used to enhance guest satisfaction, especially in the case of free-standing boutique hotels. One key factor that differentiates boutique hotels from large or chain affiliated hotels is its personalized service.

Therefore, in order to benefit from the many applications of technology (i.e. reducing expenses, generating demand, and increasing guest satisfaction), and to simultaneously maintain the personalized services characteristic of boutique hotels, it is important for owners and managers to re-think and evaluate the following key areas:

Web Marketing:

Regardless of the size of the marketing budget, the Web has evolved into the most important component of the marketing plan. Properly developed, executed, and maintained, the Web will, at a minimum cost, effectively reach local, domestic, and international markets. It is especially important to understand the difference between the two key components, i.e. the artistry of the design and the technology, and how to integrate the two. Many times, Web sites are created by technology professionals who do not understand the nuances of marketing; and vice versa, marketing professionals who design a Web site only from a visual perspective, without consideration of how key technical components, built in, can drive demand.

An effective Web site design and effective an on-line distribution strategy require expertise. The lay person is bombarded with many ideas and is left wondering which approach to take. Therefore, if relying on expert advice, it is important to have a customized plan to accomplish specific short term goals, as well as ensure that the Web site is well positioned for future technological advances and for advancements with the search engines, in order to minimize financial risks.

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Eco-Friendly Practices: Corporate Social Responsibility

The hotel industry has undertaken a long-term effort to build more responsible and socially conscious businesses. What began with small efforts to reduce waste - such as paperless checkouts and refillable soap dispensers - has evolved into an international movement toward implementing sustainable development practices. In addition to establishing themselves as good corporate citizens, adopting eco-friendly practices is sound business for hotels. According to a recent report from Deloitte, 95% of business travelers believe the hotel industry should be undertaking “green” initiatives, and Millennials are twice as likely to support brands with strong management of environmental and social issues. Given these conclusions, hotels are continuing to innovate in the areas of environmental sustainability. For example, one leading hotel chain has designed special elevators that collect kinetic energy from the moving lift and in the process, they have reduced their energy consumption by 50%  over conventional elevators. Also, they installed an advanced air conditioning system which employs a magnetic mechanical system that makes them more energy efficient. Other hotels are installing Intelligent Building Systems which monitor and control temperatures in rooms, common areas and swimming pools, as well as ventilation and cold water systems. Some hotels are installing Electric Vehicle charging stations, planting rooftop gardens, implementing stringent recycling programs, and insisting on the use of biodegradable materials. Another trend is the creation of Green Teams within a hotel's operation that are tasked to implement earth-friendly practices and manage budgets for green projects. Some hotels have even gone so far as to curtail or eliminate room service, believing that keeping the kitchen open 24/7 isn't terribly sustainable. The May issue of the Hotel Business Review will document what some hotels are doing to integrate sustainable practices into their operations and how they are benefiting from them.