Independent hoteliers are leveraging the unique characteristics of boutique properties to capitalize on demand during a year challenged by the COVID-19 pandemic.
In a series of Hotel News Now articles over the past six months, hoteliers at boutique properties gave a glimpse at how they've been balancing the return of in-person experiences with safety, reexamining local partnerships, and aligning ownership and operations teams
As demand grew in the spring when vaccines in the U.S. became widely available, less hesitant travelers were exploring "social bubbles," which are hotel suites and adjoining rooms for small groups.
In a May interview with Jennifer Rose, director of sales and marketing of the boutique Rand Tower Hotel in Minneapolis, she said her hotel created a VIP-style "bubble experience" on its 26th floor catering to both business and leisure groups.
"Once the state restrictions started to ease a bit, we thought a private and secluded floor would be a perfect way for family and/or friends to begin to come back together while considering concerns and anxieties," she said.
However, providing safety doesn't mean sacrificing the hotels' key selling points, such as niche design, culture and personal connection, said Adaeze Cadet, design director and principal at HKS Architects.
“That’s something that gives boutique hotels that competitive edge,” she said.
Because of their flexible nature, she said trends spurred by the pandemic, like converting guestrooms into video conferencing studios, can be done, but there's a way to do it without ruining the integrity of its design or overreacting to “what’s been shopped around as the right response to COVID.”
Responding to the pandemic, however, did require some reexamination of offerings and partnerships to create the most value.
Rom Loman, senior vice president of operations at Ocean City, Maryland-based Real Hospitality Group, said his company, which has more than 90 hotels in its portfolio, including many independents, has thinned out its partnerships. The key was keeping ones with the most return on investment, he said.
“In a lot of cases, those didn’t meet that criteria, and we did have to skip them for 2021,” he said. “In some rare cases, it did make sense to establish a barter agreement with some of these partners. That’s few and far between, but it did allow [a couple of our hotels] to improve their cash position by doing that. I’m typically not a big fan of that, but in tough times, we look for different things to do.”
Loman suggested partnerships that provide exclusive offerings.
“If you can find partnerships that have exclusive agreements … it makes it so much easier to market. If [we] can offer to you as a guest something exclusive that nobody else can for that product or that experience, I think it gives [us] a little bit of an edge. That’s really what [we’re] looking for,” he said.
Keeping owners and operators in mind with decisions has been paramount, too.
During this summer's 2021 Boutique Hotel Investment Conference hosted by the Boutique Lifestyle Leaders Association, Ari Heckman, co-founder and CEO of Ash NYC, said his creative team can often dream of wishes that aren't operationally doable. Ash NYC's hotel division designs, develops, owns and operates hotels.
"I've always tried to get both sides to see each other's point of view, as any good conflict negotiator aims to do," he said.
Rob Blood, founder and president of boutique hotel management and development company Lark Hotels, said it can be difficult for all parties to see perspectives from each side of the business, but they are forced to work together.
"Ownership wants to keep the hotels afloat and management wants to get their fees paid, and finding the right balance there was tricky but ultimately worked out fine," he said.
"If I am doing a good job as an owner, then I have given my managers a great base level," he said, adding that "the lowest common denominator is you've got to have a great hotel," which can't exist without a great management team.
Independent hotels have not been immune to the hiring and retention challenge, though.
Pebblebrook Executive Vice President and Chief Financial Officer Ray Martz said during the 2021 Boutique Hotel Investment Conference in June that hoteliers must figure out how to do more with less, which is an area where independents hotels could excel, and adopt greater use of technology.
Hilda Delgado, chief financial officer for Viceroy Hotel Group, said to attract and retain employees, companies must provide a safe and positive environment — another area in which independent hotels can shine.