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A Look at Boutique, Soft-Brand Hotel Supply and Performance

Soft-Brand Supply Has Grown 19% in the Past Decade
The Hewing Hotel in Minneapolis, Minnesota, is considered a boutique independent property. Elysian Development Group owns the hotel and Aparium Hotel Group manages it. (Aparium Hotel Group)
The Hewing Hotel in Minneapolis, Minnesota, is considered a boutique independent property. Elysian Development Group owns the hotel and Aparium Hotel Group manages it. (Aparium Hotel Group)

Independent boutique hotel supply and soft-brand hotel supply has grown in the past decade, and hotels in these segments have weathered the pandemic better than branded hotels in some cases.

According to The Highland Group’s Boutique Hotel Report 2021, independent boutique hotel supply has grown 5% in the past 10 years while soft-brand collection supply has increased 19%.

The interactive chart below shows a few examples of independent boutique hotels and soft-branded properties in the U.S. Click on each image for more information.

Independent Boutiques

The Highland Group defines independent boutique hotels as design-centric unique properties that are not affiliated with a major national franchise but can be grouped under the same ownership. Examples include Dream Hotel Group and Graduate Hotels.

At the end of 2020, there were 850 independent boutique hotels in the U.S. with 93,238 rooms.

In terms of distribution, the most boutique hotel rooms were found in the upper-upscale and luxury class segments at 37% and 34%, respectively. Independent boutique hotel rooms make up 19% of the upscale class and 10% of the midscale class.

Soft Brands

At year-end 2020, soft brands comprised 455 hotels with 69,528 rooms in the U.S. The upper-upscale class segment has the largest distribution of soft-brand rooms with 58% of inventory while the upscale class makes up 23%. The average size of a new-build, soft-brand hotel is 138 rooms.

Marriott International’s Autograph Collection is the largest soft brand with 22,472 rooms.

Performance During the Pandemic

Compared to branded hotels in the industry, independent boutique hotels and soft brands fared somewhat better throughout the COVID-19 pandemic, according to The Highland Group’s Boutique Hotel Report 2021.

Like other hotels in the U.S., boutique hotels closed in March and April of 2020 at the onset of the pandemic, but some chain scales of boutique properties’ room supply improved more quickly from June and throughout the year.

Some boutique hotels started retiring rate discounts in the latter part of 2020, allowing them to improve revenue per available room.

While 2020 performance metrics were down across the board compared to 2019 numbers, boutique hotels reported a steeper occupancy decline (-51.3%) than all other hotel types (-49.8%) in the industry. However, boutique hotels saw declines in average daily rate of 17.4%, which outperformed comparable hotels that reported rate fell 22.6% year over year.

Boutique hotels also saw less of a loss in RevPAR. Boutiques saw a decline of 59.8% while comparable hotels saw a decrease of 61.1%.