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The New York Times | June 3, 2008

BOUTIQUE BANDWAGON

By Susan Stellin

Technically speaking, the word “boutique” has not been a good fit for the hotel industry ever since companies started pairing it with the word “brand.”

“The original concept of boutique — you could argue whether it started with Bill Kimpton or Ian Schrager — they found buildings to convert to hotels that wouldn’t meet brand hotel standards,” said Bjorn Hanson, a lodging analyst with PricewaterhouseCoopers.

A couple of decades later, the boutique concept has become so successful that despite some backlash against the term, hoteliers of all sizes and price ranges are rushing to develop boutique brands.

Also referred to as lifestyle or design hotels, the new brands represent a movement away from the sameness that has long characterized hotel chains in favor of properties meant for a specific location or demographic.

The main reason for the boutique boom is financial.

“With the exception of 2001 to 2003, boutique hotels have outperformed both in occupancy and average daily rate their competitive peers,” Mr. Hanson said. “It started out as a segment of its own — boutique — and now we see boutique brands at different price points and different service levels.”

Although Mr. Schrager is generally credited with starting the trend with the opening of Morgans Hotel in Manhattan in 1984, followed by other hotels like the Royalton and the Delano, the idea of a boutique brand really took off when the major chains got in.

Starwood’s W brand, known for fashionable bars that attract locals as well as guests, now has 23 locations worldwide, one opening recently in Istanbul. W’s success set off the creation of lifestyle brands aimed at more mainstream travelers: patrons of JetBlue and Target looking for stylish yet affordable accommodations outside urban hot spots.

These include InterContinental’s Hotel Indigo, which opened in Atlanta in 2004 and now has 14 hotels; Hyatt’s Hyatt Place chain, which started in Lombard, Ill., in 2006 and now has more than 100 locations; and Starwood’s Aloft brand, scheduled to open its first hotel in Lexington, Mass., in July.

Although the early wave of boutique hotels turned off many business travelers because of their impractical guestrooms and spotty service, recent entries to the market are trying to offer better service and business-friendly amenities along with a lively social atmosphere.

“Your traditional banker — he is no longer a traditional banker on his leisure time,” said Jason Pomeranc, co-owner of the Thompson Hotel Group. “The baby boom generation and younger has sort of looked at it as their time away from home is to be enjoyed.”

That perspective is echoed by Michael Achenbaum, president of the Gansevoort Hotel Group, which owns the Hotel Gansevoort in the meatpacking district in Manhattan and recently opened Gansevoort South in Miami.

“I want guests to think, ‘I got five-star service, but it was a fun version of five-star service,’ ” Mr. Achenbaum said. That means providing ample meeting space, free Internet access and staff that is responsive whether a guest needs dinner reservations or a computer cable, he said. It also means offering signature touches like a rooftop pool and wow factors like the 50-foot shark tank in the lobby in Miami.

Not to be left behind at the high end of the market, several big hotel companies are starting luxury boutique brands. Hyatt introduced its Andaz brand in London last November, and has announced plans for other properties in New York, Los Angeles and Austin, Tex.

Thomas F. O’Toole, Hyatt’s chief marketing officer, described Andaz as Hyatt’s “most researched new brand ever.” He said it aims to offer “highly responsive, highly attentive service with the cutting-edge style and individuality that characterizes boutique hotels.”

After sitting on the sidelines of the boutique trend, even Marriott is finally getting in, partnering with Mr. Schrager to develop a brand called Edition, which may exceed 100 hotels.

The goal is to combine Marriott’s operational expertise with Mr. Schrager’s instincts for creating unique properties that capture the spirit of the times, most recently demonstrated in Mr. Schrager’s renovation of the Gramercy Park Hotel, working with the artist Julian Schnabel.

“We’ll take this visual provocativeness and originality of approach and combine it with great service,” Mr. Schrager said, acknowledging the criticism of his early hotels — though attributing it more to a lack of resources than any deliberate intention.

Although he lamented what he sees as the formulization of the boutique concept in the middle range of the market, he did not shy away from the term or the trend that he started.

“I think that what we started is the future of the industry,” Mr. Schrager said. “If you have something unique and distinctive, people will beat the doors down to come to it.”

Or as Mr. Hanson of PricewaterhouseCoopers put it, “To the extent that there is a hotel that seems really right for you, you will pay a premium.”