Small Hotels, Big Business

At an out-of-town business luncheon, it used to be advantageous to drop the name of your luxury chain hotel of choice. The Ritz and Four Seasons (FS Quote) rolled off the tongue and boosted image.

But now these names might make you sound a little dull, maybe even uninspired.

As travelers become more adventurous and discerning, the small luxury and boutique industry is indeed at their service.

Serious Service

John Sears, executive vice president of Boutique Hotels & Resorts International, an independent network of boutique hotels under one brand name, says visitors want their hotel address, like their home address, to reflect personal taste and standards.

"It is clear that the ordinary hotel trade drastically underestimated the demand for originality and character," says Sears. "The tide has radically shifted."

His group started in 2003, when the boutique hotel trend was just taking off and customers were starting to look for a more customized experience. As these boutique hotels and small hotel groups raised the luxury norm, people began to take notice. Ten years ago, "the boutique hotels were the romantics of the industry and nobody took us seriously," he says.

The biggest challenge, says Sears, has been competing with industry giants and their sales and marketing machines. So they focused on something the behemoths don't (and in many cases can't) have: exceptional service and unique style.

"We stayed with the foundation of delivering highly serviced hotels ... focusing less on the initial hype and more on results," says Sears.

Commercial luxury hotels are part of a bigger organization that is constantly watching their labor costs, while smaller boutiques look for service to the customer first and foremost -- unconventional in today's business model.

And as the adage goes, imitation is the sincerest form of flattery. "The best compliment we've had was that all the major hotels have started boutique segments and brands," says Sears.

The boutique hotel model is the pioneering concept in the hospitality industry, Sears adds, and has been growing significantly over the past decade.

To view Annika Mengisen's video take of today's segment, click here.