Budget Boutique Hotels: a new kind of boutique hotels

Introduction

The concept of boutique hotels was developed in the 1980’s as a reaction to growing standardization in the hotel industry, the result of the development of big hotel chains all over the world in the 1970’s (Chan, 2012, p.6). The boutique hotel sector is still constantly growing today but as a result of the current harsh economic times and of the “no-frills chic” trend, another type of boutique hotel is born: the budget boutique hotel (http://veilletourisme.ca).

Definition of Boutique Hotel

It is not easy to define what a boutique hotel is, since the concept was created precisely to avoid a standardized idea and promote differentiation. In general, boutique hotels have a maximum of 100 rooms, especially in order to be able to provide a personalized and excellent customer service. They usually have a unique design and are seen as alternative to usual hotels (Balekjian & Sarheim, 2011).  Quality often has a price and boutique hotels are usually part of a more upscale, luxurious segment of the lodging industry. In an article, HVS defined boutique hotels with keywords such as “Unique”, “Trendy”, “Hip&Cool”, “Design Oriented”, “Warm”, “Thematic”, “High-Tech” and “Exclusive” and the hotels that are not boutique as “Traditional”, “Impersonal”, “Conformist”, “Standardized” and “Low-Tech” (Balekjian & Sarheim, 2011). This new kind of hotels has developed a lot and the sector is still very much in vogue. Moreover, international chains have also then started to develop their own boutique hotels (for instance Starwood with its W hotels), which has resulted in a more and more competitive market. This is a great motivation factor for boutique hotels to constantly improve their offer since the objective of boutique hotels is to differentiate themselves and bring something new and unique.

Current issues that boutique hotels are facing

For some years already, numerous customers are being more careful in spending their money and this of course reflects on the accommodation industry as well. Low cost, no frills, budget, are words one is familiar with in all tourism sectors (airlines, hotels, restaurants…) in these difficult economic times. That is, the boutique hotel sector, even if still growing, become more and more exclusive and mostly attract wealthy guests who are willing and can afford to spend more to stay in such hotels.

As for the rest of the accommodation sector, an issue is also the lack of available space to construct new hotels. This is particularly important for the boutique sector since differentiation, including the landscape and the surroundings of a hotel, is characteristic (Chan, 2012, p.10).

An alternative as solution: the Budget Boutique Hotel

A new trend that has emerged in the tourism sector is the “no frills chic”. No frills being nowadays a basic offer, airlines, hotels and other touristic sectors must now find new ways to differentiate themselves and create interesting offers for the potential customers who are looking for more than just a discount. Therefore, they often add special services or advantages in order to face the concurrence and stay on the market (http://veilletourisme.ca).

Following this trend, a new type of hotel has lately emerged: the budget boutique hotel. The objective is to offer – as seen before in the definition of boutique hotels – excellent customer service and unique design or concept, along with low prices. Of course, the prices will not be as low as those found in hostels or bed&breakfast but they will stand on an affordable range, about the prices one can find in any average hotel only with the type of service one could expect from higher scale hotels. This is possible because the costs of development and construction are much lower as the rooms are smaller than in usual hotels or boutique hotels and allow more flexibility (Balekjian & Sarheim, 2011). This can also be a solution to the issue cited before regarding construction space, since it is not a problem for budget boutique hotels to have smaller rooms or space.

CitizenM Hotels: “Affordable luxury for the people”

http://www.citizenm.com/hip-budget-hotel-photos

CitizenM, one of the new budget boutique hotels, call that “affordable luxury”. Their hotels are located in Amesterdam, Glasgow and London and soon in New York and Paris. Their offer includes smaller rooms than most of the usual hotels but with a unique design and possibilities of customizing the rooms in choosing the light mood, for instance. They also offer a 24h food & beverage service, 24h assistance service, self check-in service option, free WiFi, free movies on demand, and common living spaces, to cite a few of their offers (www.citizen.com). All these add-on services allow them to differentiate themselves and be competitive. Other examples of budget boutique hotels are the low-scale W boutique hotel from Starwoods or the different hotels Yotel with their “cabins”, located in three European airports, Hotel Indigo created by Intercontinental, the 25-Hours hotels in Germany, and Qbic an original concept that allows space maximization thanks to its cubic design (http://veilletourisme.ca).

Conclusion

The boutique hotel sector has been – and is still – a powerful change in the accommodation sector in reaction of the large chain hotels tending to standardize their offer. This has been very well received by the customers who like their stay in hotels to differ, not in quality but in the hotel design and special offers. This trend has pushed hotels to find new ways to be different and competitive and has allowed a much diversified hotel offer to emerge. However following the demand for low cost services, hotels, as well as the other tourism sectors, have also had to lower their prices and offer only the minimum to meet the demand. This has worked for a time but nowadays, customer want more for the same price and the very competitive market has forced the low cost hotels to add more and more services to their offer for the same price in order to keep on attracting guests. The new trend for “no frills chic” has therefore naturally emerged and has now led to an alternative solution for hoteliers to be different and attractive in turning to budget boutique hotels. This trend is likely to thrive for a while, especially if the general economic situation does not get better.

Author: Elodie Oulevey

References

About. (n.d.). Retrieved from CitizenM: http://www.citizenm.com/

Balekjian, C., & Sarheim, L. (2011, September). Boutique hotel segment – The challenge of standing out from the crowd. Retrieved from HVS: http://www.hvs.com/Content/3171.pdf

Chan, C. (2012, March 21). Lodging subsector report: boutique hotels. Retrieved from https://dspace.lib.uoguelph.ca/xmlui/bitstream/handle/10214/3587/Lodging_subsector_report_boutique_hotels.pdf?sequence=7

Levasseur, M. (2008, June 2008). Soyez tendance, soyez no-frills chic! Retrieved from Réseau de Veille en Tourisme: http://veilletourisme.ca/2008/06/18/soyez-tendance-soyez-no-frills-chic/

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