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Deluxe hotels try to raise their hip quotient

September 04, 2007 | Hospitality Industry

These days, a successful luxury hotel needs a lot more than designer bed linens and a white-gloved doorman to stand out from the crowd. Boutique hotels are stealing a march on big innkeepers, whose more traditional properties can look bland by comparison.

Over the past three years, boutique hotels’ per-room revenue growth in the U.S. has averaged about 11% annually, about one-third above the industry average, says Smith Travel Research of Hendersonville, Tenn.

That helps explain why M�ridien and other big chains are scrambling to develop their own distinctive styles. Marriott International recently inked a deal with boutique hotel pioneer Ian Schrager to develop 100 hip new properties. Hyatt and Intercontinental are rolling out boutique-style chains, too. Starwood, which already runs the successful boutique-inspired W chain, is launching others. “Anybody that has a four-star brand is looking in this direction,” says Tom McConnell, senior managing director at Cushman & Wakefield Inc.’s hospitality group.

At M�ridien, the task has fallen to Ziegler, 40, a native Austrian who was Toyota Motor Corp.’s brand honcho in Europe. The chain has had a rocky history: Founded by Air France in the 1970s, it passed through a series of four owners in the decade before Starwood bought it in 2005. By taking advantage of Starwood’s centralized reservations and back-office services, Le M�ridien says it boosted per-room revenues 12.2% last year, above the average for all boutique hotels.

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