Boutique Hotels: Better than Ever Before?

Boutique hotels in Atlanta are experiencing an increase in popularity among travelers, just as those in other cities. Boutiques are defined broadly as a hotel that has a unique style that is focused on its design. These lodgings, which may be operated independently or as part of an affiliation, tend to offer anywhere from 40 to 300 rooms to guests. These hotels place a large emphasis on their intimacy and are favored by tourists as an inviting way to enjoy a vacation or weekend retreat over larger, monolithic hotel chains.

Boutique hotels, whose name came from entrepreneur Steve Rubbell (co-owner of famed Studio 54 in New York City), have been in existence since the 1980s. There are downtown Atlanta boutique hotel offerings that are among the many lodgings available throughout the country. According to the 2015 Summary Report on Lifestyle Hotels, Soft Brand Collections & Boutique Hotels from the Hunter Hotel Investment Conference, the supply growth in boutique hotels for 2009-2014 was 3.1% annually. This rate of growth is nearly 300% more than the growth in supply for all U.S. hotels for the same period. Here is an in-depth look at the data underlying the popularity of boutiques as an accommodation choice.

Boutique Hotels: Better than Ever Before?

From Visually.

The Numbers Behind Boutique Hotels

Hotels in the boutique category with 145-240 rooms and those with 100-215 rooms with a spa have net operating income per available room higher than that for total U.S. full-service hotels. The amount of income for these types of hotels, $20,553 and $31,045 respectively, are 10% and 40% higher than the net income per available room of $18,562 for full-service U.S. hotels.

The 2015 Summary Report identified 659 boutique hotels in the U.S. These properties are located in 46 states and the District of Columbia, with the State of California leading with 165 such hotels. The concentration of boutique hotels in the states of New York and Florida are in the urban areas of NYC and Miami/Miami Beach (respectively) while boutique hotels in California are widely dispersed. The number of hotels represents 1% of the total number of properties, which is nearly 53,000.

Boutique Hotel Occupancy and Room Rates Compared to Other Hotel Types

One sign that boutique hotels are a popular choice with travelers is how strong their performance is as compared to other types of hotels. The average occupancy rates for boutiques in 2014 was 75.3%. This figure is 2% higher than the occupancy rate reported for those properties categorized as lifestyle hotels and 4% higher than soft brand hotels. The occupancy rate for boutiques was 17% higher than the overall rate for U.S. hotels, as reported by STR, Inc. The respective occupancy rates for lifestyle, soft brand and the overall U.S. hotel market in 2014 was 74%, 72.4% and 64.4%.

The rates charged by boutique hotels did not impact occupancy rates in 2014. The average rates for boutiques were 21% higher than those charged by soft brands and 43% for lifestyle hotels at $244.72 a room per night. The room rates charged by boutiques are more than twice that of the average rate charged by all hotels in the U.S.

Who is Building Boutique Hotels?

As mentioned previously, boutiques may be independent or part of an affiliated group of hotels. Urban hotels are designed to take advantage of the trendiness of a neighborhood. Those located in resort destinations such as Cabo San Lucas and the Bahamas blend in with their locations and may be tucked away in hidden spaces in order to adapt with their surroundings better. Earlier boutiques were built to take advantage of the eclectic nature of their environment, such as the 42 the Calls in Leeds, England, which was built in an old mill.

Many of the large brand chains are investing in existing and new boutique hotel ventures, with an eye toward their popularity and profitability. Brands such as Hilton, Loews and other multinational chains are entering the space to compete with the smaller, locally owned and controlled operations that have been at the forefront of the boutique hotel movement.

The Trend Toward Boutique Hotels

The numbers more than suggest that boutiques are increasingly popular as a choice for lodging. Whether staying in a downtown Atlanta boutique hotel or making a booking on a Caribbean island, there are many choices available that provide you with the comfort you seek and the intimacy you desire, depending on the nature of your travels.

Price does not appear to be an inhibiting factor for those choosing to stay at this type of lodging option as occupancy rates continue to outpace those for comparable types of hotels, such as lifestyle and soft brands. Experience a stay in a boutique hotel and compare your experience to that of a larger brand. The data shows that this type of lodging is growing in its appeal to those seeking a unique new way to enjoy their time away from home. Boutique hotels offer a new way to be away on vacation or for business that may be a trend that is still on the rise.

Discover for yourself what makes staying at an independent boutique hotel so special by booking your Atlanta accommodations at the Ellis Hotel. Located in the heart of downtown Atlanta’s bustling Peachtree Street, the Ellis Hotel places you moments away from the city’s top attractions. Best of all, our boutique offerings ensure that your stay gets the attention it deserves for every day of your stay. Don’t settle for second best when it comes to choosing your hotel, make sure you get the most out of your accommodations by staying at the Ellis Hotel.

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