Smaller, yet storied building in a trendy neighbourhood: check. Personalized service: check. Individualized furnishings: check. Kitschy artwork: check. High-concept café: check. It’s easy to understand why guests would choose a boutique hotel, but the appeal to operators and developers is equally alluring. The success of this segment has also caught the eye of chain hotels, many of which are lifting some boutique attributes to apply to their own brands.
THE BOUTIQUE MYSTIQUE
Said to have first emerged in New York City in the 1980s with Morgans Hotel, which in turn inspired the first Canadian boutique property, Quebec City’s Hotel Germain-des-Pres, which opened in 1988, boutique hotels have built on that foundation of a non-standardized approach to design, decor and service. And it’s proven to be a successful format, as the sector continues to grow. Lately, that growth has been spurred by a shift in locale, as well as by other property developers’ overlapping interests.
David Larone, senior managing director, Valuation & Advisory at CBRE Toronto, says new boutique development has drifted from its traditional locale in the downtown core, where land and development costs have become prohibitive, to “areas that tend to be their own community, where there’s a lot more pedestrian traffic.”
In addition, condo developers, he says, have looked to the segment to help boost the value of their primary properties. “[They’re] thinking, ‘We need to add a hotel to this sector of the city where we’re developing because it’s a needed amenity and will help us sell more condos and attract more people.’”
As for regions breaking the most boutique ground, Chris Fair, president of Vancouver-based Resonance Consultancy — advisor to hotel developers and tourism destinations — says, “Montreal has seen the addition of the largest number of boutique hotels, while Vancouver has seen the least. Of course, Vancouver hasn’t seen much growth in hotel rooms of any kind, largely [due to] real-estate values, which have made residential and commercial-office development much more attractive.”
Autonomous properties, says Larone, offer some advantages over the chains. “Independent developers know they have to do a lot of work to get that business in the door. On the other hand, they’re not paying a royalty fee, a marketing fee, a reservation fee and a loyalty-program fee. On the brand side, the fees are 10- to 15-per-cent off the top. That’s something the developer [must] weigh.”
But, before developers can weigh anything, they’ll need to find financing. “Historically, that’s been one of the barriers for an independent property,” says Larone. “And lenders are getting more sophisticated in terms of underwriting these types of deals. It comes down to: Who’s the sponsor? How deep are their pockets? What’s their experience? So, if the lender gets comfortable on the operating side and if they’re comfortable with the depth of the equity pool on the deal, more of them will [finance] a boutique property.”
MIRRORING THE MODEL
Hotel companies have long established their own boutique properties, which, Fair notes, continue to fuel the segment’s growth. Examples include IHG’s Kimpton Hotels, Starwood’s W Hotels, Hyatt’s Andaz, Hilton’s Canopy and Marriott’s Autograph Collection. “This best-of-both-worlds solution helps mitigate the risk of launching and managing an independent hotel by being able to tap into…distribution power and loyalty programs while [maintaining] the character and positioning of a boutique property,” he explains.
But the big brands have also been quietly adopting some of the classic boutique attributes, such as lobby spaces for work and socializing, the loosening of standardized room decor, original art, casual dress and relaxed attitude from staff. Travel research firm Skift reports that these efforts are in response to a younger, more educated, well-travelled consumer who spurns the generic travel experience in favour of a more authentic, hyper-local, destination-specific, unique experience.
Larone says the distinguishing feature of today’s boutique hotel is “iconic,” pointing to Toronto’s Drake Hotel as an example. “Everyone knows it; it’s been an iconic meeting place for many years…it’s a community-destination property. [Same with] the Broadview (in Toronto). It’s a larger facility, [but] they’ve [hit] an absolute home run with food and beverage.”
Others, he says, have relied on the historic aspect of their properties, noting the Montreal-based Antonopoulos Group’s Place d’Armes, Nelligan and William Gray. But, regardless of the properties’ heritage, he says, “Local, experiential, lifestyle are the buzzwords these days.”
“Experiential” is certainly a widely-used word at Toronto’s The Anndore House. Holly Medwid, Marketing manager for the property and its developer, Silver Hotel Group, says, “It’s not just about making a profit; we want the guest to experience our city and what hospitality should be. We are the jump-off point of the experience: you’re going to get an amazing room in a great part of the city, we’re going to welcome you into our house and we’re going to tell you how to optimize your experience in the city.”
Medwid says it all starts with the hotel’s name: The Anndore House, with emphasis on the “House.” Indeed, the building was constructed in the 1950s as a combination hotel and apartment building and the goal remains to make this house a home. “Everything that’s gone into the decor, design and connectivity was designed so you can just relax,” she says.
To that end, each room includes a record player and records (a nod to the original owner’s daughter, a jazz singer), retro Smeg Kettles, rainforest showers and a barber shop. The open-concept eatery, Constantine, is referred to not as a restaurant, but the house kitchen which, like the bar, draws guests and neighbours. Guests can even join the staff for a morning run. And, if they want dining or sightseeing tips, “We can give you that based on what we experienced from the city, because we’re all Torontonians,” says Medwid. “Branded hotels will send you to the traditional landmarks, whereas we will [suggest a] vantage point to see the entire city.”
As for chain hotels emulating the boutique model, Medwid says, “[They] can create Instagrammable moments, but for us, it’s more than just a building, it’s an experience. Everything we do is based on the experience and the history, not on what is to spec and what’s going to look good online or look like a trendy boutique hotel. We didn’t have to follow brand standards; we could set the brand standard.”
Katherine Evans, principal at KSE Consult, which oversees Opus Vancouver, echoes the importance of the experience. In addition to distinctive style and design, she says the personalized service and attention, which she believes can only truly be achieved with fewer guests, is what sets the boutique segment apart. “Staying at a property where the front-desk [staff]knows your name, the chauffeur becomes your personal tour guide and housekeepers are your friend, is what sets our guest experience apart. Design and style is second to the guest experience. We all seek out spaces that feel like home, [as if] a friend lent you his or her flat for the weekend.”
The Opus bar and restaurant, says Evans, has been internationally recognized in the media over the hotel’s 16 years and its large-scale events, such as Indy Car Race parties, DJ performers and fashion shows, keep it current and relevant. She says a second property, Opus Versante, scheduled to open in winter 2019 at Vancouver International Airport, will be similar in core but will have a personality of its own.
Personality, intimacy, experiential, attentive — sounds like home (with hired help). And that’s the Holy Grail of hotel development. “One of the key reasons boutique hotels are becoming more popular is because of the rise of Airbnb,” says Fair. “While the experiences are vastly different, boutique hotels are also often located in character neighbourhoods, allowing guests a similar local experience, but with all the comforts and services of a hotel.”
Written by Robin Roberts