Boutique Hotel Brands - Do They Work?

On today’s show we’re looking at some of the recently announced or completed hotel conversion projects. These projects are happening all over the country. Hotel News Now maintains an online database of all the hotel conversions that are announced across the United States. You can download the entire excel spreadsheet and look at the details of each project.

In 2019, there were a total of 47 hotel conversion projects across the US.

So far in 2020, seven hotel conversion projects have been announced across the country.

On today’s show we’re going to showcase a few of those conversions to give a flavour for the types of projects that are getting funded in today’s environment.

Some of the hotel conversions are merely a refresh of an old and tired hotel, along with rebranding the property with a stronger brand. There are a few examples where a property switched from a Quality Inn to a Ramada. The Vegas Hard Rock Hotel is now going to be a Hilton Curio Collection property.

Some went from a private label like Turnberry in Miami to the JW Marriott brand.

In one case, an Intercontinental hotel in Milwaukee Wisconsin removed the brand affiliation and chose to go the independent route.

The improvements in a hotel conversion go beyond a fresh coat of paint, rectangular floor tiles and quartz counters in the bathroom.

Today’s traveler wants the best of both worlds. They appreciate the unique experience that comes from staying in a boutique hotel. It’s far more memorable for a visitor to stay in a hotel with art deco interior, Venetian chandeliers and brass handrails on the stairs, than telling friends and family that they stayed at a nondescript Holiday Inn.

But travellers also want the security of knowing that the property will adhere to international hotel standards for comfort and amenities.

This is where the major hotel companies have been launching so many new brands. In particular, they’ve been launching brands that allow for boutique hotels to maintain the brand strength of the parent brand whether it’s Hilton or Hyatt, while embracing the unique aspects of the property.

For example, Baywood Hotels purchased the downtown 14 story Oil and Gas office building with a plan to convert the property into a 175 key Canopy by Hilton hotel. This building was built in the 1950’s and was given heritage status in recent years. The hotel plans to open in 2021 after an extensive refit which was started this month.

It’s hard to start with an old bank, or a post office and make that hotel conversion meet the specifications of a Hampton Inn. In fact, it would be silly to try. It would create confusion in the marketplace. The Hampton Inn brand would add very little value to a unique boutique property.

When you are starting with an existing building and you would like to incorporate the history or the unique characteristics of the area into the building, it needs a distinguishing name that is in keeping with the character of the neighborhood. At the same time, travellers want to know that they can expect a fridge and coffee machine in the room, that there will be a safe for their valuables, a place to charge their electronic devices, the bed will be comfortable and that they will have high speed internet service for free with their hotel loyalty program membership.

All of these things come with being associated with a major brand in one of the new boutique collection hotels.

While these boutique hotels make up a small percentage of the overall portfolio of hotels in the market, they are a growing trend.

The boutique hotels don’t demand all of the same architectural specifications that a brand like Sheraton might require. So the construction cost can be lower in a lot of cases. Those savings make for a more profitable hotel while maintaining the brand strength.