Soft brands and the boutique hotel market.

Generally, boutique hotels are smaller properties that focus their attention on the customer experience, with an emphasis on local culture, unique design and upscale accommodations. In a time where every experience is photographed, hashtagged, and shared across multiple social media platforms, hoteliers are continuously searching for ways to make their property stand out.

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In contrast to the boutique model, major hotel brands often try to maintain a standard across all of their individual flags. While this traditional approach concept ensures that customers know what to expect regarding each brand’s amenities, it also decreases the individuality of a specific destination. To combat this, major hotel brands are turning to soft brands as a way to bridge that gap.

Major brands see the boutique hotel industry as an untapped market for potential growth and are looking to soft brands as an avenue to gain more of that market share. Soft brands are independently-owned properties that operate like and have comparable aesthetics and amenities to boutique hotels, but have the support of a major hotel brand. This model gives owners the flexibility of an independent hotel, but grants them access to the marketing, sales and loyalty programs of major brands.

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Business intelligence research firm IBISWorld figures that since 2009, the boutique hotel industry has seen an approximate 6 percent growth, with no sign of declining. In fact, IBISWorld claims growth in the boutique hotel market will continue its ascent through 2019, and an analysis of the dominant players in the hotel industry can explain this shift. In 2010, Marriott launched a line of independently-owned and operated hotels under the Autograph Collection. Since that time, the Autograph Collection has expanded to include nearly 100 properties worldwide. And Marriott isn’t the only one catching on to the trend. Andaz was launched in 2007 by Hyatt, Hilton launched Canopy in 2014, and the successful boutique hotel brand Kimpton Hotels was acquired by IHG in 2014 for $430 million. Regardless of whether a boutique hotel line is acquired or launched by a major brand, one of the key benefits (as stated previously) is the support and resources provided by the larger brand.

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In a recent article from International Business Times, Sean Murphy, Editor of Jetsetter, said, “Boutique hotels have a specific mindset – they’re not mass produced. But everyone can’t stay at a boutique hotel because of room capacity, and also because not everyone has the luxury to afford boutique hotel prices. That’s where big brands can carve out a space.” Regular customers of independently-owned boutique hotels might think the trend of major hotel brands jumping into the boutique market water’s down the concept’s authenticity, but the soft brand approach seems to be an effective compromise. A significant perk of the soft brand approach is the loyalty programs. With the support of a major hotel brand, soft brand hotels can utilize the loyalty programs of that flag. For a company like Marriott, this means its 85 million loyalty program members can now redeem their points at an Autograph Collection boutique hotel. The soft brand model is means for major hotel brands to appeal to customers that might have gone elsewhere for a similar experience. Whether or not this model is sustainable is yet to be seen, but regardless of whether it’s a soft brand backed by a major player, or an independently-owned boutique hotel with a loyal following, it seems boutique hotels are here to stay.

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