During the past five years, young and affluent customers have been primary targets of boutique hotel operators.
New York, NY (PRWEB) January 31, 2015
Boutique hotels that focused on providing luxury accommodations with an emphasis on design, individualization and quality of service have performed strongly over the past five years. The Boutique Hotels industry has outperformed the broader Hotels and Motels industry during the period, growing at an average annual rate of 5.6% over the five years to 2015, thanks to consumers increasingly demanding accommodations with unique offerings. “As consumers have increased their spending, domestic and international travel rates have increased,” according to IBISWorld Industry Analyst Andrew Alvarez. Bolstered travel rates have facilitated impressive industry growth. The industry is expected to perform strongly in 2015, as more boutique hotels are slated to open in large cities, such as New York, San Francisco and Chicago. Industry revenue is projected to increase 4.6% in 2015, making the industry worth $6.3 billion.
Over the last couple of decades, travelers have grown increasingly wary of staying in cookie-cutter hotels geared toward a mass audience. Travelers have begun migrating toward new and more intimate types of hotels, especially in urban locations. These hotels, which typically have between 10 and 100 rooms, are geared toward a target market of well-to-do 20 to 55 year olds and offer unique design themes and architecture. “Industry boutiques often center their hotel on a brand-name chef's restaurant, as well as a trendy bar or lounge, which provides boutique hotels with both a sizeable revenue stream and instant brand recognition,” says Alvarez. The large majority of boutique hotels are independent operators, but chains such as Starwood Hotels and Resorts Worldwide and the Wyndham Hotel Group are playing an increasingly large role in the industry because of the sizeable profit margins that boutique hotels offer.
Over the next five years, IBISWorld forecasts that the industry will expand rapidly as demand for the boutique concept increases substantially. Over the five years to 2020, revenue is projected to increase. Merger and acquisition activity is set to continue, as large chains continue to increase their market share by purchasing small boutique chains or develop their own boutique brands.
For more information, visit IBISWorld’s Boutique Hotels in the US industry report page.
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IBISWorld industry Report Key Topics
This industry includes intimate, luxurious and upscale hotel environments that feature unique architecture and design. They are also known as lifestyle hotels, villas and wellness hotels. The establishments in this industry may offer food and beverage services as well as having restaurants, spas and salons on the premises. This industry does not include chain hotels, though it does include boutique brands owned by larger hotel groups.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
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Barriers to Entry
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