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Published: Tuesday, 4/12/2011

Hotel growth to boom

Boutique brands to open across nation

NEW YORK TIMES
Guests at Ink 48 walk into the front desk and lobby.  The brand has many definitions, but design, says travel analyst Henry H. Harteveldt, is at the forefront. 'People like things a little bit different, offbeat.' Also, owners don't have to comply with brand standards. Guests at Ink 48 walk into the front desk and lobby. The brand has many definitions, but design, says travel analyst Henry H. Harteveldt, is at the forefront. 'People like things a little bit different, offbeat.' Also, owners don't have to comply with brand standards.
NEW YORK TIMES Enlarge

Hotel experts have all sorts of definitions for boutique hotels. "Not cookie cutter," one said. "Chic," said another. "One hundred rooms or less," a third said.

Ink 48 in New York operates a rooftop bar. A boutique hotel, Ink 48 is just one brand travelers have embraced. Ink 48 in New York operates a rooftop bar. A boutique hotel, Ink 48 is just one brand travelers have embraced.
NEW YORK TIMES Enlarge

Whatever the definition, big hotel chains and smaller boutique brands plan to open many more in cities across the United States and overseas the next few years.

Here is a sampling of the boutique -- or lifestyle hotels, as some refer to them -- that are in the works. In December, Ian Schrager, an originator of the boutique concept, announced two boutique brands, as yet unnamed. These follow the collaboration he began three years ago with Marriott International to create the Edition boutique hotel brand. In September, Richard Branson's Virgin Group, which includes the high-end Virgin Limited Edition hotels, announced Virgin Hotels, a four-star lifestyle hotel brand that at first will focus on the North American market.

More recently, the Wyndham Hotel Group signed an agreement with Chatwal Hotels and Resorts to franchise and manage Chatwal's Night and Dream boutique brands, and Sonesta International Hotels announced its own brand, Kept. Plus there are Modo, from the former chief executive of Nylo Hotels, and new boutique spinoffs by Sofitel and Swire Hotels. And John Pritzker, a member of the family that started Hyatt Hotels, who owns a controlling interest in Joie de Vivre, a California boutique brand, plans to double its 34 hotels and open them nationwide.

Although industry experts estimate boutique and lifestyle hotels today represent at most 3 percent of all hotels in the United States, they expect this number to grow significantly.

Bjorn Hanson, dean of the Preston Robert Tisch Center for Hospitality, Tourism, and Sports Management at New York University, said almost a third of all hotels opening in Manhattan this year would be boutique or lifestyle hotels, and as much as 10 percent in other major urban markets. He estimated they could account for 6 percent of all hotels in the nation, and exceed 10 percent in the largest urban markets, in 10 to 15 years.

One reason for this growth, said Henry H. Harteveldt, travel analyst for Forrester Research, is a reaction by travelers against large hotels that are much the same, no matter the location.

"Everybody pays attention to design," Mr. Harteveldt said. "People like things a little bit different, offbeat. And they make someone who may have a rather mundane life feel hip."

The plethora of new brands is a reflection of economic conditions and the state of the real estate market.

Boutique and lifestyle hotel owners do not have to comply with the brand standards -- which, for example, can specify the size and features of guest rooms -- normally required by giant hotel companies such as Marriott, Starwood, and Intercontinental.

Although revenue per available room at boutique hotels fell by about 30 percent from the third quarter of 2008 through the first quarter of 2010, compared with a 20 percent drop for all hotels in the United States, it bounced back by about 10 percent last year, exceeding the 6 percent rise for all hotels, Mr. Hanson said. And he estimated that revenue per available room for boutique hotels would jump another 12 percent this year.



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