Boutique Hotels

Boutique Hotels Are Disappearing - Business Insider

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Boutique Hotels Are Disappearing

Excerpt from Business Insider

Major hospitality chains are buying up independent boutique hotels, and it's creating a new challenge that's at odds with the main reason people travel in the first place

  • Independently run hotels are on the decline, Julie Weed wrote for the New York Times.
  • Boutique hotels are joining or becoming affiliates of large hotel chains to benefit from bigger marketing and operational budgets, Weed reported.
  • Marriott International, Accor and IHG are among the major hospitality chains purchasing collections of boutique hotels and assembling what are known as "soft brands," according to Weed.
  • Boutique hotels acquired by hotel chains now face a new challenge: how to meet travelers' desire for memorable stays while also fitting into the broader brand portfolio.

Boutique hotels are disappearing

That, as Julie Weed reported for the New York Times, is because they're being snapped up by large hotel chains such as Accor, IGH and Marriott International. According to hotel data company STR, less than 40% of US hotels are independently owned and operated today. That's down from 60% of hotels three decades ago, Weed wrote. 

One reason for this trend is that operating independently is often more expensive for hotels than operating as part of chain — especially when it comes to partnering with online booking agencies such as Expedia, according to Weed. "Hotels generally pay a 15 to 30 percent commission when a traveler uses the online booking agency to reserve a room," she wrote. "But larger companies like Marriott use their market power to negotiate lower booking rates."

What do modern travelers want?

For hotel chains, the draw of acquiring boutique hotels includes gaining access to a new set of customers.

Ting Phonsanam, cofounder of Momentum Hospitality Management, which helps independent hotels develop their brands, told Weed that hotel chains are expanding their collections of boutique hotels to cater to travelers looking for "unique, boutique or historic" accommodations.

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