The boutique hotel industry was created in response to demand for hotels offering unique, chic and intimate environments, with top-notch service. Demand has spread as vacationers and business travelers who have fallen in love with the boutique hotel industry want to be able to stay in boutique hotels even when visiting the suburbs. The boutique hotel industry has listened and is starting to deliver.
According to Jim Anhut of InterContinental as quoted in a USA Today article, business in the suburbs has really begun to thrive in the last 10 years. “More business is being done in the suburbs, and mass retailers such as Ikea, Pottery Barn and Target helped pave the way for ‘democratization of design,’” Anhut said. This means that more people, including business travelers, are visiting the suburbs than ever before. The suburbs have suddenly become an attractive market for the boutique hotel industry. And let’s not forget another big bonus for boutique hoteliers: Land is much cheaper in the suburbs.
There are several major boutique hotel operators building in suburbs across the country, but most of them are focusing on the suburbs of the 25 largest cities, according to the USA Today article.
Aspiring boutique hotel owners can follow suit and stick to the larger cities, or they can blaze their own trail in a smaller market. Personally, if I were looking to start a boutique hotel in suburbia, I would probably avoid competing with the larger companies. Larger hotel chains have the luxury of big marketing budgets and intercompany referrals. The suburb market is still fairly new and untested, and it could become saturated if too many boutique hotels enter the same suburb. New boutique hoteliers are probably better off focusing on the suburbs of the 26 to 50 largest cities. This would allow them to both enjoy a good-sized market and avoid major competition until they can at least establish their boutique hotel brand.
Business travelers and tourists are the lifeblood of the boutique hotel industry, and investors should analyze the numbers of both of those groups in a city when seeking a market. Some suburb locations are more business-oriented or tourism-friendly—or both—than others. Curious investors and entrepreneurs should read our article for more information: Boutique Hotels: Owning, Operating and Investing.