USA, Los Angeles, California. December 09, 2022

With the recent announcement of Hyatt purchasing Dream Hotels, this is the exact moment to reflect on big chains buying out smaller boutique brands. It may be a good move for the owner of the Dream brand, who has spent many years building up the brand value while keeping ownership of the assets at bay [as each property is owned by others, with just a few exceptions]. Hyatt is also gaining a lifestyle group of properties to add to its portfolio. While this may be a good move for both, independent hotels and small brands are most likely to reject offers to join a larger group if they are already successful in their markets.

Big chains/brands certainly have their spot in the history of the hospitality industry, while boutique hotels have been around for decades. Independent boutique hotels have been able to retain their importance amidst a big field, as evidenced in this short video by the hotel owners at the 2022 Boutique Hotel Owners Conference by BLLA. They are, in many cases, the crux of what makes a hotel so desirable to the traveling public. The major brands created their soft brands specifically to try and replicate the ethos of these properties as the traveling public began to prefer a different experience around 2010 or so. If not for inspiration from the boutiques, the interest in owning and operating a hotel would die down, which is exactly the opposite of what is happening today.

BLLA and its supporters are standing up to unify the world's independent boutique hotels and businesses, and the movement gains momentum every year over the past 13 years. The spirit of smaller hotels and brands standing up to big corporations to stake their place sends a message of unity and resilience. The story is still being written, and BLLA is proud to be at the forefront of this movement. Unity is possible, not everywhere, but certainly in hospitality. We resonate with today's choice of Time Magazine's Person of the Year in some way. It strikes a chord that all things are possible.

Below, we take a look at what it means to be a boutique property, historically and today. Though big brand buy-outs often undermine the power of independent leadership, BLLA members demonstrate the resilience of boutique values and showcase the ingenuity in creating authentic hospitality experiences.

A Brief History of Boutique Hotels

Skift released an article in 2017 detailing the history of boutique hotels. Here, the Kimpton Hotel brand is credited as one of the first boutique property groups in the United States, inspired by the homey authenticity of small hotels in Western Europe. The group expanded after realizing there was a gap in what hotels were offering at the time. Steve Pinetti (who worked at Kimpton since the beginning) talked about how Bill Kimpton, founder, remarked, "I loved staying in little hotels where mom and the kids are at 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. I remember drawing on a grid, a circle in the top left corner, saying, here's our market today. We've got luxury hotels that are small and very expensive. Over here, we've got conventional hotels that are very big and impersonal. Down at the bottom, we've got tour and travel hotels, which are not so great, and they're a little bit nasty." So clearly, there was a wide-open gap in the hotel market (where boutique hotels come into play).

After finding their niche, where luxury is affordable, small-scale, and experience-focused, these entrepreneurs disrupted the industry by building a successful boutique hotel in downtown San Francisco. Apart from dropping key numbers from big hotels ranging somewhere in the 1,000s to a new concept of 220 rooms or less, the hoteliers also made the bold decision to build an extravagant dining experience and merge accommodation and food and beverage. What a concept!

"Creating our concept and calling it a boutique hotel with a chef-inspired restaurant was equally disruptive, and the proof of that, you look at it today," Pinetti told Skift.

In 2015, IHG bought out Kimpton Hotels, turning this once-historic hotel group into an offset of the corporate brand. This is happening time and time again. "Big companies lure in all these independent hotels by saying ‘we're going to be hands-off and we're going to let you do what you do, but that's just not the case in most instances," explained Ariela Kiradjian in a recent panel discussion.

The Case for Boutique

Much of today's mainstream hospitality culture comes from small-scale properties. Incorporating coworking spaces, music and art venues, and F&B services began in independent properties. Big hotel chains catch on to the successful techniques of smaller businesses and attempt to redesign their strategies to fit a larger market. They borrow endless inspiration from the success of boutique operations or simply buy them out (we're being gentle here). However, the case for boutique brands is stronger than ever in today's market. Community connection, adaptability and resilience, and creativity are a few of the areas that make boutique hotels transcend other hospitality experiences today.

Another good example of inspiration was published recently in HOTELS Magazine's ‘ Romancing the Independent ', where the publication bestowed their annual LEGEND Award to Andrea Kracht, owner of the fabled independent luxury boutique hotel, Baur Au Lac, in Zurich. Jeff Weinstein, Editor-in-Chief, remarked, "In today's often too-corporate hotel environment, I reveled in the opportunity to talk to a classic, legendary sixth-generation hotelier who is smart enough to understand that you sometimes just leave well enough alone."

A recent Vogue article touched on the power of this style of travel. "As more of us identify with the term traveler rather than tourist, we seek deeper travel experiences when visiting a new city. Boutique hotels are inherently more intimate due to their smaller size and provide the sorts of local charms that branded hotels lack, articulated through a more curated hospitality directive. Design is a big focus, and they lean on a city's history and specialties to help guide their approach. Boutique hotels also possess a community element-whether through more personalized guest experiences or by using spaces and dining environments to help blend local communities with hotel guests, giving you an even deeper sense of place." Below, we have collected moments from BLLA attendees and speakers at this year's Boutique Hotel Owners Conference that demonstrate the luxury, the power, and the emotional intention behind ‘boutique' in 2022.

The list of qualities that make boutique hospitality extraordinary is endless. The Boutique Lifestyle Leaders Association builds a platform for these creative endeavors to thrive and for driven entrepreneurs to expand their network and global influence. Through collaborative spaces, provocative conversations, and well-deserved acknowledgments, the events hosted by the organization examine the value of upholding non-conforming practices. "It's important to remember why a hotel exists. And then, more importantly, why a boutique hotel exists. It's out of necessity; it's out of need." Jayson Seidman, Founder and Managing Partner of Sandstone and BLLA Board Member, noted at BLLA's conference. "There's a massive world of hospitality assets that exist, and we all need to stick to our fundamentals of why we're all here." The conference, held in late October, showcased an impressive spirit of wisdom and leadership. BLLA Conference Discusses the Future of People in Boutique Hospitality.

Connection

Back in 2018, Frances Kiradjan shared with Forbes, "part of boutique hotels' appeal lies in the ability and freedom for their operators to pursue the "live-like-a-local" ethos espoused by vacation rentals like Airbnb by tailoring the hotel's design, amenities, and services to its geographic location." What Big-Chain Buyouts Mean For The Future Of Boutique Hotels. Similar sentiments were shared across the 2 days at this year's conference. Owners Natalie Binder and Chet Pipkin discussed hosting free community events at their properties, CampV and Desolation Hotel. Jayson Seidman spoke on hosting artist programs at his property in New Orleans. His residency program invites local creatives to use the space to showcase their work, and Seidman's investment in the community reflects a deep commitment to creating positive experiences for both local residents and guests.

"Hotels underestimate the power they have in the community and how they can really lift up local artisans. You're not just a hotel; you are also this platform for people to jump off of," shared Ariela Kiradjian.

Barbara Malone, co-owner of the 110-year-old Hotel Sorrento in Seattle, understands the importance of maintaining this perspective. She says the key to success for the independent hotel she owns with her husband has been to "stay true to the hotel's DNA as a community builder," offering music and literary events and serving their core customers, including families coming to the area for medical treatment. At the same time, she said, it's important to stay nimble and take advantage of new opportunities, like the current expansion of Seattle's convention center just a few blocks away.

These efforts nurture a positive relationship between a property and local communities, but they also offer guests the chance to interact with the location on a deeper level. By uplifting community voices, hoteliers facilitate an intimate conversation between visitor and place while providing a service to both groups.

Adaptive and Resilient

Speaking of taking advantage of new opportunities, independently operated properties have a unique position regarding adapting to unpredictable changes. This flexibility proved vital in the past few years. BLLA's 2021 article, The Hospitality Industry's Impressive Ambition and Creative Ingenuity, closely examines how hoteliers shifted operations and functions to accommodate the fast-changing needs of pandemic hospitality. A massive trend we saw coming out of the pandemic was the emergence of coworking spaces changing hotel design. The concept completely redefined communal spaces and shifted the industry's strategies for marketing to younger, working audiences which continues today.

Though large corporations have since adopted similar designs, boutique properties can leverage the strategy in a way others cannot. Because boutique properties don't need to sell to a distinct market but instead promote a lifestyle that any traveler can appreciate, a broad range of guests enjoy these amenities. When asked whether leisure or business properties were more at risk for a buy-out, Frances Kiradjian explained, "I think that's an old tale as to why someone would distinguish themselves so narrowly in the boutique space. If you're a convention hotel, that's a different story. Business travelers are requesting boutique hotels more than they ever have before. I recall meeting with a corporate travel agent from a large corporate travel agency and discussing their law clients who are keen on switching to boutiques for the past several years. A trend that is certainly gaining steam."

Brian De Lowe, Co-Founder & President of Proper Hospitality, shared the positive resilience of his hotel in Top Issues Owners Face Today (a panel at the conference), compared to big hotel chains. Speaking on the rise in guest numbers post-pandemic, De Lowe explained, "big corporate business travel at boring non-boutique hotels, that's not back. And I think those types of hotels are in trouble. But our business travelers are back. In our markets, our hotels are filled. [...] Small to midsize businesses are back; groups are back. People are traveling to places where they want to have leisure experiences while they're traveling for business."

"I think one of the things we learned in COVID is: we make a plan, and then we have to make a new plan," noted Maya Mallick, Owner & Creative Director at The Culver Hotel. A boutique hotel's creativity shines through the ability to accommodate every type of traveler. "Offering experiences to cater to both the leisure traveler during certain times and the corporate traveler during other times. I think that's important."

"I also think that when people travel for business, they still want an experience. They're not just traveling for work; they want to have that fun F&B (food & beverage), they want to have that cool creative workshop, and they want to be in an interesting neighborhood. Or if it's a little more remote, they want some other interesting experience that's related to the community they're in. Even if it's out in the middle of nowhere, they'll want to go to that local winery. So I think we, as owners and operators and designers, have to really think more. But the upside to that is: that's what we like to do. We like to create experiences and find interesting things for people to do while they're away from home. Whether they're there for business or for leisure." The ability to cater to a wide spectrum of travelers gives boutique hotels an upper hand in marketing and design. This has enabled them to bounce back faster and adapt to humanity's ever-changing habits.

Creativity

One of the most exciting parts of boutique hotels is their creative ingenuity in designing incredible spaces and experiences. Nick Knight, Director of Revenue & Distribution at Ash, shared an incredible space in the panel discussion - Retail, Partnerships & The Hybrid Experience. "Most of our properties have a more experience-driven model, which I tend to relate more to. So, just to touch on one example for you, at The Siren Hotel in Detroit, we have a record store that is actually a bar as well. And the concept is: there are live DJs 6-7 nights a week in their very small space with one or two people working, so a very intimate atmosphere, and then the walls are lined with records, and they're curated through a local connoisseur if you will. That tends to create that nice retail meets experience situation, and we try to recreate that in different ways. Everything from having Barber shops to more traditional retail spaces. So, we're still experimenting and learning as we grow."

"I'm always trying to just evolve with my properties, and the beauty is because my properties are mostly pretty small, under 100 keys, I have the opportunity to constantly try things out like a laboratory and just have fun with it and experiment," explained Jayson Seidman.

Boutique lifestyle brands represent much more than simple hotel accommodations or wellness retail. They are a modern embodiment of the future of hospitality. Their attention to the guest experience and the care poured into developing unique moments of deeper connection will continue to attract travelers from all walks of life to choose independent over large corporate stays. Though larger brands may attempt to emulate the feeling of a boutique experience, they cannot replace independent hospitality brands. "As hoteliers or boutique owners of small, thoughtful properties, we're protected in a way because what we create is done in a very personal way that honestly can't be replicated by a bigger hotel," said Jayson Seidman at the End of Day Reflections panel.

Nile Tuzun, Founder & Chief Creative Storyteller at Studio Nilebrand and BLLA Board Member of the Year, added, "you cannot replicate that feeling when a big brand takes over these boutique hotels. All of a sudden, that personality, that character, that soul tends to go away because they have to make money a lot quicker. I think these boutique owners are a little bit more patient, and they really do it because they love it. They're in this love affair with hotels, and that's why they're doing what they do."

The one thing that small businesses can create is a much stronger and more authentic connection with travelers. That's something a big chain cannot compete with and what people want. The personal relationship independent boutique hotels create along the way will go far in enhancing their customers' memory of their visit to a boutique hotel. [While hotels appreciate the wider audience exposure provided by OTAs and big brands, the goal is always to drive direct bookings to the hotel's own website, both for the extra revenue and, more importantly, to own the customer experience from the start.]

For 13 years, BLLA has been celebrating the success of what they call "the boutique lifestyle" in hospitality while promoting the values of these properties to both investors and travelers, as well as designing professional development activities within the sector. Through education, vendor programs offering hotels special packages, magazines and newsletters, award ceremonies, roundtable discussions, networking events like conferences and town hall meetings, and a community of supporters, the organization, led by Frances and Ariela Kiradjian, offers appreciation for entrepreneurs with an independent approach to investing, owning, and operating a hotel, travel, dining, and cultural exchange. "BLLA is primarily dedicated to creating greater economic success for independent business owners by helping them level the playing field against larger brands and chains." Support the movement by joining BLLA or reach out: [email protected]. (Article in collaboration with Margo Strifert.)

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