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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 Méridien 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 Méridien, 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 Méridien says it boosted per-room revenues 12.2% last year, above the average for all boutique hotels.

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