With fewer rooms to look after, boutique hotels offer king-size service
In mid-December Jacques Fortier, manager of Opus Montreal, heard from a man who had reserved a room for his fifth wedding anniversary. He wanted to do something special for his wife. So Fortier took care of dinner reservations, and while the couple was dining, he had staff decorate the room and drop off a bottle of champagne. Funny enough, the man’s wife had also called asking for something special for her husband. Fortier thought their mutual consideration was so charming he gave them a gift basket, courtesy of Opus.
“What’s great about boutique hotels is we’re empowered to do this,” says Fortier. “Working for chain hotels…it’s not that you can’t do it, but it’s always complicated.”
Large chains dominate Canada’s hotel industry, but the popularity of boutique properties is far from waning. It’s not that there’s been a surge of new builds — in addition to the 77-room Hazelton Hotel in Toronto, the 185-room Matrix Hotel in Edmonton, and the 80-room Oswego Hotel in Victoria, B.C., all built in 2007 — most of the activity has been in acquisitions and expansions. In Montreal alone, Le Place d’Armes Hotels and Suites added 39 new rooms and 48 suites in a $21-million expansion in 2005, while last summer Trilogy Properties Corp. bought the Hotel Godin and reopened it as the 136-room Opus Montreal, and the Hôtel Nelligan completed an $8-million renovation and expansion, upping the number of rooms from 34 to 44, the number of suites from 27 to 59, and adding two penthouses. The Murray Premises Hotel in St. John’s, Nfld., also had a makeover, adding 19 rooms in July ’06.
Like the Canadian dollar, boutique hotels are thriving. “They’re doing very well compared to the broader market,” says David Larone, director of PKF hospitality in Toronto. “If you look at the core of Montreal, Toronto and Vancouver, they’re running at occupancy levels of anywhere from 68 to 70 per cent. RevPAR is 10 to 20 per cent above the market, and ADR is between 30 and 50 per cent above the average rate.”
Eight years ago Leading Hotels of the World (LHW) created a separate membership for properties with fewer than 100 rooms called Leading Small Hotels of the World, addressing the fact that guests staying at smaller hotels have different needs. But LHW avoids using the word boutique.
“The term boutique hotel is thrown around and I don’t always know what people are talking about,” says Marshall Calder, LHW’s senior vice-president of Marketing. “A lot of them are what I call ‘cheap-chic,’ — a three-star hotel with a thin patina of luxury wrapped around it.” Calder says there’s a gap between what some boutiques claim to offer, and what they actually deliver, which he dubs “antici-pointment. The service isn’t as professional, the staff isn’t well-trained…we all know some of these hotels hire actors who look great in their black uniforms and blond hair.”
In Canada, only the Hazelton and the 59-room Hotel Le St-James in Montreal meet enough of the 1,500 or so standard points required to be a Leading Small Hotel of the World. But every hotel that calls itself a boutique — there’s no accepted industry-wide definition, and many Canadian boutique hotels have more than 100 rooms — emphasizes unique, stylish designs and indulgent amenities. Their highly personalized and superior service is also vital for customer retention. And if RevPAR is any indication, guests are buying in.
In larger hotels, service can suffer, says Larone. “I challenge my staff…when you walk into a big hotel see how long it takes an employee to engage you. In a lot of properties it just doesn’t happen.” With fewer marketing dollars to work with, it’s even more important for small hotels to blow guests away on their first visit — to ensure repeat business, but also to generate a new customer base through word-of-mouth testimonials.
“Before a guest steps into our hotel we’ll do everything we can to find out why they’re staying with us, and what they’ll need while they’re here,” says Andrew Van Buskirk, director of Operations at the 111-room Pantages Suites Hotel and Spa in Toronto. The Pantages is one of two properties owned by Skyline Boutique Hotels (the other is the city’s 95-room Cosmopolitan Hotel). That could mean googling a VIP guest, to discover she smokes obscure European cigarettes and ensuring there are a few packs in her room when she arrives.
Frédéric Jenni, general manager of Toronto’s 118-room Hotel Le Germain, says you must train your team to listen to guests and feel out their needs. There are comment cards in every room, which guests often fill out, but it’s also about anticipating guests wants before they’re even aware of them. Last year Le Germain built a rooftop putting green. “No one asked us to, but we have a lot of clients who are really into golf,” Jenni says. Guests were thrilled.
Boutique hotels also have a unique approach to training, devised to raise the level of service. At Opus Montreal, Fortier role-plays common situations with his staff to fine-tune their service skills, and he’s a big believer in team work. “If I need to park a car because my valet is stuck, I’ll do it. All my department heads will help. [In chain hotels] you weren’t allowed — even if the guest had to wait 20 or 30 minutes for his car.”
Getting to know guests — often on a first-name basis — is another priority. Knowing their likes and dislikes further individualizes the guest’s experience on each subsequent visit. Dean Morrow, general manager at Matrix, says, “You have to have the right kind of dialogue that says ‘Hey, I’m interested in you,’ and the right kind of technology that can store the data.”
Perhaps the biggest challenge boutique hotels face is getting customers in the door. Besides having small marketing budgets — “Chain-wide marketing and ads in EnRoute are not happening,” says Barb Murphy, sales associate for Murray Premises — there are other barriers. Travel agents tend to work only with chain hotels, Murphy says. “If you’re booking a guest from Houston to Aberdeen to St. John’s, he can stay in a Fairmont in all three cities. Booking him at the Murray Premises is more work for you as a travel arranger.” And many small properties can’t afford the reservations systems or loyalty programs large hotels use.
Boutique hotels must be creative to drive new business. Murphy visits potential clients in person and says, “I’m Barbara, this is our story.” Murray Premises also pays travel agents a commission when they book guests into the hotel. One of Le Germain’s strategies is to partner with other companies for mutual cross-selling. “Fly with Porter airlines and you’ll end up hearing about Le Germain and vice versa,” Jenni says.
In Calder’s words, the market for small hotels is as bright as ever. Larone agrees, stating boutique hotels built in the past 10 years entered the market at a good time because there wasn’t a lot of supply. But in the next four or five years there will be an influx of new-builds in Canada’s major urban centres, many of them five-star properties such as the Four Seasons and Shangri-La. Larone also estimates 1,500 new rooms in Montreal, with approximately 200 of those in boutiques. Toronto could get another 2,000 rooms, with about 350 of those in boutiques.
Since boutique hotels court the same clients as luxury full-service hotels — primarily leisure travellers, celebrities and corporate groups — how will this inflow affect business? According to Larone, naysayers think the five-star hotels will attract the coveted upper-echelon business away from existing properties, leaving boutiques to fight each other for the remaining customers by dropping rates. But Larone believes the outcome will depend on how operators react.
“Is there any real reason for it to be negative? There shouldn’t be. Some properties will be true five-star product, and bring rate leadership to this market. The rest of the hotels will be pulled along.”