Unique experiences remain the benchmark for success at boutique hotels
Doggie daycare, gifts of homemade granola and grocery service are examples of the kind of unique experiences that can be expected at boutique hotels, which are well-positioned in the Canadian lodging sector for that very reason. The growing popularity within the segment is of little surprise considering the facts: these small, upscale, unique hotels are often located in prime markets. And even though boutique hotel occupancy rates have dropped two points since January, the segment is still performing two points ahead of upscale properties and the industry as a whole.
“Boutique hotels finished last year at around 71 per cent with $181 average daily rate,” explains Brian Stanford, a director at PKF Consulting in Toronto, which specializes in hospitality and tourism. “Despite the fact that we saw a downward trend across almost all segments in the industry in 2008 because of a bad last quarter, boutique hotels actually managed to hold their own.”
Manoir Hovey in North Hatley, Que., is one such success story. “We’re not exactly growing in leaps and bounds in terms of sales, but it is holding,” says general manager Jason Stafford of his 41-room hotel, which is also home to a CAA Four Diamond award-winning restaurant. “In fact, it’s a little bit up over last year.”
Still, that doesn’t mean every boutique property is sitting on easy street. In Vancouver, the 77-room Loden opened to much fanfare last year, attracting marquee guests and rave reviews, but it has been an uphill climb. “We’ve had to re-examine some of our rate structure [with extended, introductory rates] particularly for the first six months, and we’ve had a lot more promotions that have been in the market longer than we anticipated,” admits Edel Forristal, general manager of the Loden. But Forristal has more than the economy with which to contend; she also has to build confidence in a new brand name while competing with Vancouver’s established hotels and the new Shangri-La Hotel Vancouver.
In Whistler B.C., David Demers understands her predicament. The owner and general manager of the Sundial Boutique Hotel re-christened the Westbrook Hotel a few years back and today it ranks number 2 in Whistler in RevPAR and boasts one of the top three average daily rates in the resort town. It took Demers and his partners 10 months, $8.5 million in renovations and an understanding that top-notch service was the icing on the cake. “You have to separate yourself somehow from the other brands, and you do that with service and product,” he says of the 49-room property.
At the Loden, aside from top-drawer service, Forristal aims to create an oasis that acts as an extension of the city she loves. “Almost every member of my team is knowledgeable and local to Vancouver, so we get what our city is about. We’re proud of it and we want to bring that in through the experience here.” Loden guests craving a taste of the city can borrow bicycles, an example of the environmental consciousness that defines the property.
“It’s something [our parent company] Kor Hotel Group has really captured but it’s also something we can teach them about,” boasts Forristal. “This is Vancouver, and you know how important the environment is to people on the West Coast.” Examples of such thinking abound at the Loden — filtered water is served in glass flasks as part of turndown service, green hotel-crested shopping bags are available in every room and Forristal has lofty goals for the oil from the kitchen’s frying pan. “One day I’m going to run my car off chef’s frites oil,” she quips with a laugh.
Many boutique owners agree that tapping into a hotel’s geographical identity is part and parcel of providing the unique experience their guests crave. At Quebec’s Manoir Hovey, maple syrup and icewine are among the gifts offered to repeat guests, while Demers’ Sundial resort was reconfigured to capitalize on “being unique to Whistler,” in colour, shape and landscape.
Such social and mental consciousness will only boost occupancy in Vancouver during the 2010 Olympic Games. “I want to make sure we represent Whistler, British Columbia and Canada, with the best expectations so everybody benefits from it,” explains Demers.
Still, no matter the landscape, guests expect all the modern-day conveniences, regardless of the occasion. “Ten years ago … we would sometimes be criticized for having TVs in our rooms, but now people are looking for a balance,” Stafford muses while discussing the importance of maintaining the 100-year-old charm of his five-star inn. “A lot of our rooms will have beautiful antiques and an Old-World character but they also have modern amenities like flat-screen TVs, whirlpool baths and fireplaces.”
At the Loden, the challenge is to incorporate technology in the rooms without creating a stuffy, business-like atmosphere. That means offering plug-in panels to accommodate BlackBerries, iPods, laptops and digital cameras, while optimizing new space made available by flat-screen TVs and utilizing energy-saving temperature controls.
But marketing is perhaps one of the biggest obstacles boutique hotel operators face. “I wish I had deep pockets … but I don’t. So, I’ve got to be cautious of what I’m doing and make sure I’m doing it right,” says Demers.
That’s the beauty of repeat service, which is something every hotel operator banks on. Just six months out of the gate, the Loden has already hosted one particular guest on more than 20 occasions, while at the Hovey, a regular booked 35 visits per year after being treated to a tour of a new suite. It’s a business victory that comes from one of the boutique industry’s most powerful advertising tools, word-of-mouth. “[It’s] 70 per cent of our business,” says Stafford. “We send personalized e-mails, providing news on the property, whether it’s that we’ve hired a new restaurant manager or we’re offering an Easter package.”
Demers understands the evolving travel sector and the importance of engaging clients through the Internet, even though it’s a source that not all boutique hotels can utilize effectively; just ask Brian Leon, managing director of Franchise Growth and Administration at Choice Hotels Canada Inc. Choice is partnering with independent hoteliers as part of its new Ascend Collection of upscale hotels, which includes boutique properties. “Some of these other affiliation programs, they can offer certain services to their members, but they don’t have the depth of resources in terms of sophisticated booking engines that Choice does,” Leon explains.
The program has been well-received in the States where it launched last year, and Choice is looking to bring it to Canada. “Many properties don’t want to become part of a franchise system because they don’t want to lose their identity, but with times being tougher, people are looking for solutions,” Leon suggests. “Hotel owners are, more than ever, looking for ways they can boost their revenue.”
That said, PKF’s Stanford doesn’t think boutique owners should be disheartened. “As long as supply and demand stays within balance in that segment, it should continue to perform at a higher occupancy and a higher rate and, as a result, a higher level of profitability.”
