As the world eagerly awaits the opening ceremony of the 2012 Olympic Games in London this Friday, the excitement surrounding the city’s boutique hotel scene has never been higher. Two new luxury boutique hotels opened just last month, and the trend will continue long after the Olympic torch is extinguished, with additional offerings in the works and scheduled to open in 2015. Beyond London and the allure of the Olympics, the famous Rosehall Estate in Sutherland, Scotland – Coco Chanel’s holiday retreat – may end its 60-year dormancy in 2014 as a boutique hotel.
We anticipate that the management agreements for this type of high profile, luxury asset will direct managers to be more guest focused and attentive, and to measure success by customer satisfaction above increased average daily rate (although these metrics should certainly be related). These hotel management agreements should express hotel owners and operators’ acknowledgement that the hotel must distinguish itself through the superior level of personalized service and individualized care it provides at all services levels, and in maintaining hiring, training and supervising programs geared toward a level of quality reflective of the boutique experience.
Each point where a hotel guest interacts with hotel staff is an opportunity for the operator to demonstrate that it possesses the requisite skill and expertise to operate in the boutique environment, and for the hotel owner to measure the operator’s performance. Savvy boutique hotel owners and operators desire a unique niche from which to achieve significant success in occupancy levels and in supporting a better-than-market average daily rate. This will not be achieved by financial engineering alone. If, as we believe, behavior is based on incentives, the boutique hotel management agreement may need to become a vehicle not just to house fine deal-driven and legal terms and concepts, but also to express patterns of behavior, particularly guest-facing behavior, that hotel owners and operators wish to institutionalize and replicate every day.
Learn more about the boutique hotel world – join me at the Boutique & Lifestyle Lodging Association’s symposium in Los Angeles this October.