How boutique hotels are delivering their own brand of luxury

Boutique brands allow luxury hotel chains to service secondary markets. 

June 19, 2017

Travelers searching for a luxurious hotel stay don’t have to look far in cities like New York, Chicago and San Francisco.

Hotels that include world-renowned spas and five-star restaurants are not hard to find in these primary U.S. markets – but in secondary and tertiary markets, the hunt can be a bit more challenging.

“Luxury hotels have historically been located in cities like New York and Chicago because that’s where hotel owners can charge room rates high enough to offset the hotel’s higher operating costs,” explains Lauro Ferroni, Global Head of Research at JLL’s Hotels & Hospitality Group. “Running a Ritz-Carlton or a Four Seasons in a tertiary market usually isn’t feasible from a business perspective.”

But major hotel brands such as Marriott and Hilton are still bringing luxury experiences to hotel guests in smaller cities. How? By tailoring their offerings for each market and focusing on certain amenities.

Boutique brands fit the bill

Boutique and collection brands, like Curio by Hilton or Marriott’s Autograph collection, have enabled the larger hotel companies to provide some of the luxury guests are looking for. These boutique brands aren’t bound to the same branding, design and operating guidelines as other hotels, which allows their owners to be more flexible and creative with their properties.

“Boutique hotels have the ability to customize their offerings based on the market they’re in,” says Ferroni. “Owners can make decisions that prioritize guests’ desire for upscale food, modern design or access to the outdoors.”

For example, 21c Museum Hotels boast contemporary art displays, fine dining and spacious guestrooms. With locations in cities like Bentonville, Memphis and Louisville, guests can enjoy some luxurious amenities in smaller, more accessible locations.

Luxury isn’t one-size-fits-all

There are several features that are required for a hotel to retain its luxury status. High-end design in guest rooms and common areas, spacious spas and gourmet food and beverage options are the standard, with added touches like monogrammed bathrobes or champagne upon arrival.

Lifestyle hotels are embracing luxury qualities that are important to their guests – whether it’s a swanky bar in the lobby or modern art in guestrooms. By excluding some of the more traditional luxury offerings, they’re bringing luxurious experiences at price points that work for secondary and tertiary markets.

“Though many of these hotels don’t fit the traditional luxury mold, they still provide luxurious amenities and experiences in their own unique ways,” notes Geraldine Guichardo, Americas Head of Hotels Research with JLL’s Hotels & Hospitality Group. “If a guest can enjoy dinner cooked by a prominent chef and then browse an art exhibit before bed, that experience will help them feel pampered, even if their room doesn’t have any luxury qualities or features.”

Continued growth for secondary markets

Luxury boutique hotels are popping up in non-gateway markets all over the U.S., in cities like Nashville, New Orleans and Charleston. By focusing on the luxury elements that are most important to guests and foregoing non-essentials, they’re bringing high-end experiences to new markets every day.

“We expect this trend to continue as boutique brands continue to rise in popularity, especially among younger travelers,” says Guichardo. “We expect to see many of these hotels unveil new, creative ways of delivering selected high-end experiences at more affordable prices.”