On Monday I posted about the news that IHG is acquiring Kimpton Hotels for $430 million. Yep, the world’s largest hotel chain is taking over the world’s first boutique hotel chain.
To me this was a really logical move, even though admittedly most Kimpton loyalists will be unhappy about it. As I explained, this probably isn’t good news for those that were loyal to Kimpton, though for people like me, it’s great news. I can be at least semi-loyal to IHG Rewards Club given how big their portfolio is, but I can’t really stay at Kimpton properties enough to be loyal to them, given their lack of a footprint… as much as I’d like to be. So for my personal travel patterns I’m happy about this takeover, even without taking into account the potential ramifications of this on loyalty programs.
Skift has a thought provoking article about how boutique hotels have “evolved” and come full circle, and questions what constitutes a boutique hotel nowadays.
The basis of the story is that boutique hotels have emerged because younger travelers don’t want a cookie cutter hotel experience:
The factors spurring this trend are manifold, beginning with rapidly changing demand from a younger, more well-educated and well-traveled consumer who actively avoids any type of generic travel experience. Only two decades ago, hotel brands marketed themselves based on product consistency, especially attractive to consumers traveling abroad in a rapidly globalizing marketplace with so many new emerging destinations.
Since then, brand consistency has shifted from a positive business driver to a toxic mark of shame, quickly.
Why don’t they want a cookie cutter experience? Largely because of the impact of social media, and how unique experiences play out better there:
Social media exposure has been a big reason behind the rise of so many suddenly trendy destinations from Vietnam and Morocco five years ago to Iceland and Bhutan today. The same is true for the rise of cult-like “tribes” slavishly loyal to lifestyle hospitality brands ranging from Ace to Airbnb.
How many people today make travel purchase decisions based on how their experience will play out on social among their personal and professional networks?
Yet really things are coming full circle, because boutique hotels are becoming more and more consistent as well, which is really making them just like the mega-chains they want to differentiate themselves from:
Because, W Singapore doesn’t really feel like an entirely different experience than W South Beach. You pretty much know what to expect at each property. In fact, the new W Bogota that opened this week is newsworthy because it’s in Bogota, not because it’s a W. The same thing could be said about a Kimpton in D.C. or San Francisco, or a ME in Cancun or Madrid, just as much as an InterContinental or Marriott in Prague or New York.
Meaning, these boutique brands that are so popular today are evolving into a reincarnation of the Hiltons and Hyatts from previous generations. Since the parent hotel groups are public companies, consistency is still all-important to their bottom line. All we’re talking about here is just a shift in room count and design.
In fairness to Kimpton, I do think they’re different and have stayed at least somewhat true to their “boutique” roots. That’s because the hotels really aren’t built like Andaz or W properties where they’re supposed to be consistent, but rather each property is unique while delivering at least some sort of consistent experience.
And I that’s what has made Kimpton so attractive to be acquired. They’re actually different. A large hotel chain probably couldn’t start as good of a portfolio from scratch. So if they can keep the core of what Kimpton does, I think this could work out quite well.
One interesting assertation is that boutique hotels are “spiritually bankrupt:”
“It’s no longer a stylistic benchmark or authority in experiential authenticity,” he said. “I would suggest that boutique hotels as they’re known in the asset class capacity have become spiritually bankrupt.”
Summing up, Brosh explained that “boutique” to him equates with independent hotels, versus properties developed by large brands, committees and traditional place-making techniques designed to increase returns for stakeholders.
I don’t think that boutique hotels are “spiritually bankrupt” necessarily, though I also don’t think that it’s right to suggest that chains like Andaz, W, etc., are actually “boutique.”
What do you guys think — are Andaz, W, etc., fundamentally attempts by the “big” brands to compete in the boutique market? And for that matter, can a hotel that belongs to a big chain be boutique?
(Tip of the hat to Dennis)