Boutique Hotels and the Demand for Historic Properties

By John Tess President & CEO, Heritage Consulting Group | July 15, 2018

Boutique hotels have gone from a small niche idea to a major part of the hotel market in the span of a few decades. What started perhaps as a curiosity has grown to over 125 different companies calling themselves boutique hotel operators as of 2017, including boutique sub-brands of many major players in the industry. 

Not surprising, where the term "boutique hotel" came from is a matter of historical discussion. The first hotels of this type were created in the early 1980's at a time when the urban hotel industry was marked by large central city properties and an emphasis on standardization.  Integral to the development dynamics was the growth of historic preservation, the returned interest in historic downtowns and the creative opportunities to adapt old buildings to new uses, often using federal and state incentives.

Regardless of the "first," the idea behind it was the same. If large hotels of the era were big and generic like a department store, then this new type of hotel would be small and unique, like a boutique apparel store. Ian Schrager, founder of Morgans Hotel Group, once characterized the concept: "We were a boutique. We had a specific attitude. We had something to say. We had real focus. It wasn't about size. It was about narrowness of focus."

Where Did Boutique Hotels Come From?

In 2017, Deanna Ting, Senior Hospitality Editor at Skift.com, interviewed a number of industry leaders on the beginnings of the boutique hotel movement.  In the United States, this product  can be traced back to two specific hotels both opening in the early 1980's. 

On the west coast, Bill Kimpton opened the Bedford Hotel in San Francisco in 1981. Before starting in the hotel industry, Kimpton had been an investment banker. In his travels throughout Western Europe, "he loved staying in little hotels where mom and the kids are at the check-in and there's dad in the kitchen, flipping up a storm, and everybody is giving you a hug and you feel like you were at home" says Steve Pinetti, Co-Founder and Senior Vice President of Kimpton Hotels & Restaurants.  In 1980 Kimpton and Pinetti sat down together to see if they could create a viable product based on what Kimpton was seeing in Europe. After some quick back of the napkin analysis, they landed on the sweet spot in the market that Kimpton Hotels, and other boutique hoteliers, have been successful with ever since. Again, according to Pinetti: "the sweet spot was to be as nice as a luxury hotel, but not as expensive, and to be much, much smaller than a convention hotel that only caters to individual businessmen and women, with maybe only a couple of small meeting rooms. Then certainly much nicer than a tour and travel hotel." Finally, instead of an outlet or coffee shop in the hotel, they decided to have a freestanding, chef-inspired restaurant as an added attraction.

To execute the idea, Kimpton acquired the Art Deco 1929 Maurice Hotel at 761 Post Street in San Francisco.  Located a few blocks west of Union Square, like many classic early 20th century hotels – once large but now small – the Maurice had fallen into disrepair and had been adapted into apartments.  Kimpton recognized the opportunity and charm to create the Hotel Bedford.  With 144 rooms, the Bedford featured historic character balanced with a bold, then contemporary style in blues and lavender.  The hotel also included "The Wedgewood Lounge", serving local brews and displaying fine china from the collection of Lord Wedgewood.  Balancing with style was financial practicality, keeping per-room construction costs at one-third of new construction.  Within five years, Kimpton opened five addition "boutique" hotels in San Francisco while branching out to the cities by the end of the decade.  Today the Kimpton Group Hotels and Restaurants is part of the IHG family and operate 66 hotels with 12,500 rooms in 35 cities.

/ SLIDES
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Mobile Technology: The Future is Now

Mobile Technology continues to advance at a relentless pace and the hotel industry continues to adapt. Hotel guests have shown a strong preference for mobile self-service - from checking-in/out at a hotel kiosk, to ordering room service, making dinner reservations, booking spa treatments, and managing laundry/dry cleaning services. And they also enjoy the convenience of paying for these services with smart phone mobile payments. In addition, some hotels have adopted a “concierge in your pocket” concept. Through a proprietary hotel app, guests can access useful information such as local entertainment venues, tourist attractions, event calendars, and medical facilities and services. In-room entertainment continues to be a key factor, as guests insist on the capacity to plug in their own mobile devices to customize their entertainment choices. Mobile technology also allows for greater marketing opportunities. For example, many hotels have adopted the use of “push notifications” - sending promotions, discounts and special event messages to guests based on their property location, purchase history, profiles, etc. Near field communication (NFC) technology is also being utilized to support applications such as opening room doors, earning loyalty points, renting a bike, accessing a rental car, and more. Finally, some hotels have adopted more futuristic technology. Robots are in use that have the ability to move between floors to deliver room service requests for all kinds of items - food, beverages, towels, toothbrushes, chargers and snacks. And infrared scanners are being used by housekeeping staff that can detect body heat within a room, alerting staff that the room is occupied and they should come back at a later time. The January Hotel Business Review will report on what some hotels are doing to maximize their opportunities in this exciting mobile technology space.