The Rise of Boutique and Lifestyle Hotels

When wandering the internet landscape of choices in hotel properties, more and more travelers are turning to lifestyle and boutique hotels. What is behind this shift from large hotel chains to smaller and more intimate properties? What does this mean to the business models of the larger chains?

You may first be wondering what defines boutique and lifestyle hotels?

Within the hotel industry, boutique hotels are regarded as containing up to 100 rooms, while lifestyle hotels can have up to 150. In addition, since many lifestyle hotel properties are owned by larger, well-known hotel chains, they can offer the best of both worlds. While keeping the trademark touches of a boutique hotel like a small, intimate size with a modern feel, they also provide the perks of a large chain like loyalty reward programs and lower prices due to the large chain’s economies of scale. It could be said that lifestyle hotels are essentially the next generation of boutique hotels. When you begin to look at the amenities and opportunities these properties offer to visitors and then look at the price travelers are willing to pay for that experience, it is easy to see why this segment of the hotel business is turning the hospitality industry on its ear.

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How these properties target and attract the travelers that visit

Lifestyle hotels, because of their smaller size, do not need to try and appeal to every type of traveler. They instead tend to target a particular demographic need or niche, such as travelers that are tech-savvy or those that are health conscious. They strive to build individual relationships with their clients, and they focus more on the experience of the customer, rather than offering a mere product or service. The properties strive to have a substantial online presence. They focus on the ideas of rejuvenation and life enhancement, music to the ears of, for example, weary business travelers.

What sets these properties apart besides their smaller size

One of the hallmark qualities of lifestyle and boutique hotels is that they are located in local neighborhoods rather than as part of a cluster of large hotels in a specific urban or suburban area. The properties make connections with and strive to offer all the amenities, services, and unique characteristics that are contained in the neighborhoods where they are located. As compared to larger chain hotels that are often communities in and of themselves, lifestyle hotels attempt to blend into their surrounding communities seamlessly. 

How businesses like Airbnb are driving this change

If all of these features sound familiar, it is due in no small part to how the entire hospitality model has been changed by Airbnb. Airbnb is unique insomuch as no two properties are alike, they are often nestled in a local neighborhood, and they offer travelers the ability to experience all that a local neighborhood offers, much as if they were a resident of that community during the length of their stay. So it is no surprise then that major hotel chains have branched out into this market with offerings that are similar to the experience something like Airbnb offers. 

How these properties target millennials

When you start to put all the pieces that these lifestyle hotels offer you begin to see that all of these things are the staples of millennials. Properties that have a significant presence on social media, allow travelers to tailor their experience and book the entire trip on their smartphone, and then offer all of the things that appeal to millennials once they are on-site at the property.

What this all means for the hospitality industry

While there is undoubtedly still a place in the market for large hotel chains, it is fair to say the lifestyle and boutique hotel segment is the one on the rise. In fact, boutique hotels made up just 3.2% of hotel room inventory in the United States in 2017, yet they accounted for 17.8% of the projects in development in 2018. The reason for this is because the model works. Boutique and lifestyle hotels are consistently booked near capacity and at room rates that tend to be higher than more traditional chain hotels. With an ever-expanding rush to cater to this affluent and mobile group of travelers, there is no doubt that the rise in boutique and lifestyle hotels is sure to continue. 

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