1 November 2022, London Marriott Hotel County Hall
21 November 2022, Hilton London Metropole
12 December 2022, etc.venues Monument, London
What are boutique hotels offering the business travel buyer, and is it enough to win corporate cash, asks Catherine Chetwynd...
The boutique hotel sector is on a roll: Firmdale has bought Dorset Square, Blakes has re-opened with 47 new rooms and has been re-designed by Anouska Hempel, and the Cadogan Hotel has been bought by the Cadogan Estate. In addition, according to figures from STR Global, boutique hotels in London showed an average daily rate (ADR) of nearly £180 in April – double digit growth year on year.
Boutique – as defined at the Boutique Hotel Summit 2011 – is intimate, independent, individual, has a design element and most important, has high levels of personal service. And that costs.
Given the prices charged by some of these properties and the continued desire of companies to maintain a low spending profile, this success raises the question: how do they do it? “These hotels are fishing in a different pond from the bigger brands but still cannot afford to ignore the distribution channels,” says consultant to the hotel industry Melvin Gold. “The better ones will join a consortium such as Small Luxury Hotels or Classic British because it is the best way they can get onto a global distribution system (GDS) with economic efficiency. It gives them a lead to market.”
There is, however, no doubt that many of these properties do get corporate business. Threadneedles, a stone’s throw from the Stock Exchange and part of The Eton Collection, has a high percentage of corporate occupancy; and similarly, Firmdale gets the business traveller vote in hotels such as The Haymarket, The Soho and The Covent Garden.
Indeed, the format is so successful that the big hotel chains have entered the fray. Starwood’s Luxury Collection is a long-standing example and MGallery isAccor’s passport to the genre. St. Ermin’s Hotel in London’s Victoria is an MGallery hotel: “We are excited about our relationship withAccorand are hoping it is the best of both worlds,” says Jon Cummins, chief operating officer of Amerimar Enterprises, which owns the property. “It allows us to maintain our independence, keep our branding, design, and operational and service standards; with MGallery, we get all that but alsoAccor’s reservations and group sales.”
And the latest contender is Marriott’s Autograph. “We plan to have 7500 rooms in Europe by the end of 2015 and 70% of those are probably going to be city destinations,” says John Licence, continental brand activator for Autograph. “Autograph is going to be a franchise and the key thing is that the hotels will retain their individuality.” They will also bear not even a trace of a Marriott logo.
However, behind the scenes, all things Marriott will be beavering away to ensure efficient distribution. “We can bring Marriott’s sales engines and channels to help them reach a new set of customers. Marriott.com is the world’s seventh largest internet site in revenue, across all industries, and Autograph hotels will also be on the GDS with an AK code – one in five reservations over GDS is a Marriott product,” says Licence.
On a smaller scale, the Dorchester Collection is equally confident of its ability to promote newcomer 45-room 45 Park Lane. “We have our own GDS chain code and promote the hotels as one collection,” says Trevor Owen, area director of sales and marketing for the Dorchester and Coworth Park. And this is, apparently, enough. “We had very good success with Coworth Park through that. There is enough muscle to promote a new hotel in London,” he says.
Even given good distribution, boutique hotels are not an obvious corporate fit. Travel and fleet buyer for HSBC Lee Whiteing says the bank’s hotel programme is driven by price and location, although he does use Malmaison in Birmingham. “It is competitively priced,” he says.
Mobile satellite company Inmarsat has used boutique properties but there are caveats. “They cannot really take on too many corporate clients because if a tiny allocation of rooms is taken, they don’t have those rooms to offer their regular clients. It’s all down to revenue – corporate clients are going to negotiate a price and if there are people prepared to pay a higher rate, the hotel will lose that,” says Inmarsat’s corporate travel manager Caroline French.
Again, “it comes down to price and location,“ she says. “Our best experience was when we negotiated a rate and we took quite a few of their rooms, but we were probably too successful because their rates increased the following year and we didn’t use them.”
E.On UK uses a lot of non-group hotels. “We use quite a spread of accommodation and have a lot of travellers who have quite eclectic tastes in hotels,” says UK travel manager Judith Gledhill. “We have a lot of small properties on the programme and I think there is a place for them in a hotel programme. It should not just be about 3- and 4-star corporates.”
Boutique hotels are more likely to appeal to travellers who prefer a less formatted hotel stay but as long as there are companies that sanction that, they will continue to have a role in corporate life.