Hotel revenues have fallen sharply since last October and shares in hotel groups in Europe fell by more than 30 percent in 2008 as investors anticipated pressure on earnings this year.

Nonetheless global giants from InterContinental -- the world's largest hotel group -- to Marriott and Starwood are launching boutique brands in Europe, with others set to follow as they face the biggest industry downturn in a generation.

Consulting firm PricewaterhouseCoopers in December forecast U.S. demand for hotels in 2009 would fall by 2 percent which, when coupled with an increase in supply, would reduce occupancy levels to 58.6 percent -- their lowest since 1971.

Against that backdrop boutique hotels - individual and usually luxurious outlets - offer big chains a chance to boost one of the industry's key measures: revenue per available room (RevPAR), which PwC saw sliding 5.8 percent in this year, after last year's estimated 0.8 percent decline.

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