Boutique hotels take a foothold

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Aproven and tested concept in Europe, the boutique hotel continues to evolve.

In fact, in Dubai it is still in its infancy. “The hotels I have seen here are very nice with great service but they’re not the family boutique type,” says Anna Gemrud Morner, General Manager of Stora Hotellet — Umeå Sjömanshus & U&Me — New Hotel Culture in Sweden.

“Boutique hotels should be very small in a historic setting within a destination, with a small team of well-paid passionate employees to interact with the guests on a more personalised level.

People feel they are worthy of experiencing a lifestyle which is different.”

In her first visit to the UAE during the recent Hotel Show, her impression was that the boutique hotel market is underserved in the country.

While in Europe the boutique concept conjures images of quaint historic buildings, the UAE simply doesn’t have the luxury of 1800s buildings, according to Martin Kuebler, CEO of Iconsulthotels. However, there are hoteliers that take advantage vintage residences in places such as Bastakiya, where Emirati-inspired XVA Art Hotel takes pride of place. With its 13 individually styled rooms set in a historic wind-tower and courtyard building, XVA Art Hotel has already received international recognition as a must-stay hotel in Dubai.

“It has a unique, intimate soul which connects you to the service and local culture, giving guests a sense of belonging,” says Moses Barnabas, General Manager of XVA Art Hotel, which is home to the XVA Gallery.

“Around 95 per cent of our visitors understand art; they are mainly Europeans and Americans, as well as a few Indian and GCC guests.

Branded boutique chains have taken a huge market share over the years. That’s one of the biggest challenges for individual operators.

Each brand has its own niche to cater for, but for the concept’s survival we have to invest in technology and keep that personal touch.”

One to One Hotels & Resorts operates two properties in the UAE fitting the boutique concept: The Village, an urban sanctuary of 127 rooms in Abu Dhabi, and Ain Al Faida in Al Ain, which has 27 rooms and 57 villas.

Philippe Harb, COO of the small hotel group, reckons there is reason to believe boutique equals success.

“Boutique is less about brand but more about personality, vibrant and exciting,” says Harb. “The fact that large hotel chains are bringing their boutique and lifestyle brands here, means there is a market for it.”

Boutique hotels could achieve higher revenue per available room (RevPAR) than their three- and fourstar counterparts, satisfying the yield and faster return on investment requirements of investors, says Harb.

“It makes sense. People like boutique concepts like they do luxury, although they aren’t necessarily related.” Stephen Gee, Hotel Development Director at Zaya Hospitality, concurs pointing to the virtually saturated market of large properties. “Owners and operators are looking for a diversified and sustained income over a period of time, a perpetual asset development,” explains Gee. “Urban boutique hotels in a mixeduse model can do that, focusing on design, lifestyle, music, food and beverage.”

The Hues Boutique Hotel at Deira’s Corniche and 72 Hotel by Hues fit into the design niche, coming in a vibrant contemporary architecture and offering affordable luxury.

“We don’t have a historic story but are new and unique, focusing on design and creating an atmosphere where our clients step into the hotel [feeling] like family visiting friends, a key difference to a chain hotel,” says Khaled Saab, General Manager of Hues Hotels and Resorts.

With clients from Europe, Latin America and the Commonwealth of Independent States, he reckons that as long as hotels could navigate a multigenerational balance, the potential for future success is huge.

“Boutique hotels are the extension of luxury and upscale hotels in terms of design and service,” says Saab.

“The challenges are high fixed costs and variable income fluctuations in occupancy and room rates, yet providing excellent service and low prices — a tough equation to balance.”

According to Rabih Feghali, Director of Business Development at Roya International, the biggest challenge is to convince an owner to build an 80-room boutique hotel on a plot with space for a 20-floor building.

However, the likes of Emaar could lead the way, integrating concepts like Vida into its masterplan.

“Conversions [of existing properties] such as a group of villas into a boutique hotel could also work,” says Feghali. “The concept is driven by emotions.

Those that succeed are backed by an owner with passion. Creating for the sake of creating doesn’t work that well.”


Source: Nicole Walter, Special to Property Weekly PW


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