Boutique hotels focus on the experiential nature of service delivery. Factors helping to deliver upon the experience include a cap on the number of rooms, a design or cultural aspect to the property and attention to the location of the property. The subsector however, lacks a singular definition. This is in part due to structural changes undergone by the subsector since conception of the concept. The subsector evolved from comprising of independently owned properties to establishment of dedicated boutique hotel chains and more recently, involvement of large international hotel chains looking to diversify their operations. Problems facing boutique hotels encompasses increasing competition for real estate and financing opportunities, concept copying, and human resource and branding issues. Looking into the future, boutique hotels need to have a strong differentiation strategy while maintaining authenticity of the property. Operating under a members’ club structure is an ongoing trend in this subsector, along with greater attention to environmental sustainability, incorporation of technology into the property, introduction of budget boutique hotels and growth within the Asian markets.
Definition of a boutique hotel
Over the years, many scholars have attempted to create a universally agreed upon definition for boutique hotels. Unfortunately, these attempts have not been fruitful in achieving its goal. A review of literature on this topic however, reveals common dimensions among descriptions of boutique properties. Main dimensions mentioned include smaller non-chain upscale property with a focus on the exchange between guests and hotel employees. These operations provide highly personalized service in a homey and intimate environment that usually includes a unique design or cultural component. Location of the property is also integral to a hotel’s success and 2 ability to deliver a unique experience to guests (McIntosh & Siggs, 2005; Aggett, 2007; Lim & Endean, 2007; van Hartesvelt, 2006; Sarheim, 2010).
To be considered a boutique hotel, many researchers and industry professionals indicate the property may only have a maximum number of 100 rooms (Aggett, 2007; Henderson 2011; Mintel, 2011). The reason for stipulating a maximum room number is to address the ability of boutique hotels to provide personalized service, and to ensure the integrity of exchanges between guests and employees (Henderson, 2011). The argument for this statement is that it is simply not possible for larger lodging properties to deliver the same level of personalized service recognized at a boutique hotel as larger properties equates to larger staffing numbers, effectively reducing the amount of interaction between each individual guest and employee. Thus, negatively affecting how well an employee can get to know a guest. Overall, this reduces the ability of hotel staff to personalize a guest’s stay. Furthermore, the aim of major chain organizations to standardize service across properties with rigid operation policies has historically been a factor preventing them from operating boutique hotels.
Large organizations lack the flexibility and degree of employee empowerment required to deliver the highest level of personalized and intimate service recognized in a boutique hotel (Henderson, 2011). A characteristic more consistently agreed upon is the unique design or cultural aspect of a boutique hotel’s operation. Boutique hotels feature a unique product differentiating itself from others, and set the subsector apart from the rest of the lodging sector. Their source of differentiation is commonly associated with the design, artistic, cultural or historic appeal, the halo effect of celebrity patronage, and the prestige and exclusivity of a property (Lim & Endean, 2009; Sarheim, 2010). An example of a differentiation strategy employed by boutique hotels is housing hotels within converted historic or heritage buildings that tells a story specific to the 3 property. Branding also plays an important role in delivering uniqueness and differentiation.
This is especially true for the new consumer group who purchases contribute towards expressing their self-actualization goals and self-congruency (Pricewaterhouse Coopers, 2005). This image of prestige associated with many boutique hotels and their reference groups is increasingly becoming a main pull factor for guests (Hartesvelt, 2006; Pricewaterhouse Coopers, 2005). For instance, a boutique hotel known to be frequented by many writers will draw aspiring writers or consumers interested in literature to the property. Similarly, a property recognized as a “hip” or “glamorous” establishment appeals to consumers who wish to be considered trendy or affluent (Hennessey, 2000).
A design or cultural component to the boutique hotel appeals to consumers of today’s experience economy (Holverson, Holverson, Mungall & Centeno, 2010). It sets boutique hotels apart from traditional forms of lodging services by introducing individuality to the property (McIntosh & Siggs, 2005). Some hotels feature special architectural designs such as a building shaped as a boot or in the case of Hotel Fox, they commissioned 21 contemporary artists to create 61 different designs for guest rooms (Hotel Fox, 2005). In essence, a guest staying at the Hotel Fox repeatedly can be exposed to a different environment and enjoy a unique experience each stay (Lim & Endean, 2007).
Another characteristic of boutique hotels mentioned in literature is the location of the property. Boutique hotel locations are classified into city and resort destinations. City destinations are chosen for the “trendiness” of the area, whereas resort locations are exotic, small and intimate (van Keulen, Viriot & Koh, 2002); however, generally, most properties are in urban or city centers (Lin & Endean, 2007). Location provides the context for which the unique experience of staying at a boutique hotel occurs by contributing to the ambience at the property. 4 Lastly, HVS consulting group compiled a list of terms that does and does not describe boutique hotels. The research identified additional concepts such as trendy, hip and cool, inspiring and aspirational to be part of what makes up a boutique hotel and its related experiences there. Some terms identified as not being correlated to boutique hotels include old fashioned, conformist, allinclusive, bland and mainstream (Balekjian & Sarheim, 2011). An emotional connection between guests and the property is also mentioned throughout literature related to defining a boutique hotel, indicative of its importance to boutique operations (McIntosh & Siggs, 2005; van Hartesvelt, 2006).
Segments of boutique hotels
Based on the common characteristic definitive of a boutique hotel, the Boutique and Lifestyle Lodging Association defines boutique hotels as “an intimate, usually luxurious or quirky environment and upscale hotel environments for a very particular clientele (Boutique and Lifestyle Lodging Assocation, n.d.)”. Based on this very broad definition, they were able to identify twenty classifications of boutique hotels. Some of these categories are highlighted below.
The BLLA considers lifestyle hotels as boutique hotels as long as they have less than 300 rooms and combines living elements with functional design (Boutique and Lifestyle Lodging Association, n.d.; Mintel, 2011). They may or may not be themed properties. A review of literature on boutique hotels reveals a habit of using the terms boutique and lifestyle hotel interchangeably. Consultant groups such as Pricewaterhouse Cooper (2005) maintain both terms refer to the same type of lodging accommodation, whilst others argue there is a distinct 5 difference between the two. Mark van Hartesvelt (2006) is an advocate for the need to distinguish between the two. He maintains lifestyle hotels are marketed to mass tourists whereas boutique hotels “market to one”. He also stated, lifestyle hotels are based on creating and marketing an image, but boutique hotels sell the experience (van Hartesvelt, 2006). Design, architectural and designer hotels
Design and architectural hotels pays particular attention to the property environment. While the prior focuses on aesthetics, the latter focuses on novelty of the architectural design and design achievements. Designer properties will hire popular architects or interior designers to design these properties as Hotel Fox has done.
Luxury and Classy hotels
These properties are all about excessive indulgence. Visitors are looking for a refined lodging experience to reflect the unique lifestyle of the wealthy (Boutique and Lifestyle Lodging Association, n.d.). Large fashion houses such as Yves St. Laurent, Versace, Gucci and Armani have diversified their brands’ revenue streams into boutique hotels (Hennessey, 2000). For instance, the philosophy of design for Armani Hotels & Resorts first and foremost mentions offering the intimate and warm welcome that Armani himself will extend to his family and friends, in addition to “superior service, immaculate design and incomparable luxury (Armani Hotel and Resorts, n.d. )”.
The other classification of boutique hotels under the BLLA includes trendy or modern hotels, all-suite hotels, artistic hotels, avant-garde hotels, city hotels, classic hotels, conference hotels, contemporary hotels, corporate hotels, distinctive hotels, extraordinary hotels and funky hotels. All these classifications feature varying degrees of focus on property design and in providing an 6 experiential experience for guests (Boutitque and Lifestyle Lodging Association, n.d.). Many boutique hotel properties fall under multiple classifications. As per the examples provided, luxury properties developed by large fashion houses can be classified both under designer and luxury hotels.
The largely encompassing definition and classification system for BLLA is mainly the result of how the association’s receives funding. A source of funding for BLLA comes from selling memberships; the more memberships they are able to sign the more financial resources they are able to secure. Accordingly, they have a broad definition and numerous classifications of boutique hotels, of which, some may seem farfetched from the original boutique hotel concept, all only but to help inflate their membership numbers.
Development of boutique hotels
In the 1970’s, the development of large hotel chain operations lead to the rising popularity of standardizing lodging products and services. Standardization is the response to help management control quality, predict, and minimize mistakes and risks arising from employee error during service production (Sandoff, 2005). Under this business model, employee-guest encounters are regulated based on service blueprints (policies and procedures) developed through service engineering (Sandoff, 2005). By way of having a standardized product and service delivery, visitors were able to know exactly what kind of room and service they can expect every time they stay at a property belonging to the same hotel chain.
The concept of boutique hotels was the result of a counter movement against the standardization of lodging products and services in the 1980s. Consumers were looking for different experiences 7 from those they have become so well accustomed to from large hotel chains (Aggett; 2007; Rogerson, 2010; Sarheim, 2010). The first boutique hotel to respond to this change in consumer attitude was by Blakes in London which opened in 1978. The boutique concept quickly spread across the Atlantic to stateside with the opening of Clarion Bedford in San Francisco in 1981. Ian Schrager, recognized as an iconic boutique hotelier entered the subsector in 1984 with Morgans Hotel in New York (Mintel, 2011). The counter-movement continued to fuel growth of the boutique subsector with independent, dedicated boutique hotel chains and major chain operators (Mintel, 2011).
The target market for boutique hotels are guests in the early 20’s to mid-50’s, have a mid to upper income average (Olga, 2009), majority of guests’ are male (61%) and 63% of the subsector’s business mix is from corporate travel (Pricewaterhouse Cooper, 2005). The average stay of a guest to a boutique hotel is between one to two nights (Pricewaterhouse Cooper, 2005). Today’s guests continually seek new and unique experiences different from standardized hotels in which the property itself becomes the destination location (Rogerson, 2010) and their tourism purchase patterns are becoming polarized (Pricewaterhouse Cooper, 2005), both of which favours boutique hotels as they are experience focused upscale properties. Additionally, symbolic meaning behind premium brands, such as prestige associated with boutique and lifestyle hotels (Pricewaterhouse Coopers, 2005), are used to express the visitors’ self-concept of themselves or express their self-actualization needs (Jamal & Goode, 2001). 8 Recent developments in the subsector
The recent demand for boutique hotels is credited to the growing interest of consumers in learning about the fine arts and culture (Lim & Endean, 2009). In comparison to other lodging subsectors, boutique hotels are able to deliver both aspects of design and local culture to guests; hence, successfully attracting more guests and charging higher room rates. The increasing polarization of tourists today (Pricewaterhouse Cooper, 2005) is also fuelling development in this subsector. Boutique hotels normally have at least a four star rating and operates between mid to luxury markets (Rogerson, 2010; Aggett, 2007) due to added value for guests from the nature of the lodging product and to their higher level of services and amenities.
Supply side growth for boutique hotels is fuelled by outperformance of the subsector compared to overall regional lodging sector performance (Aggett, 2007; Mintel, 2011). Comparing the performance of United Kingdom’s overall lodging sector to the region’s boutique subsector, the subsector has consistently outperform the overall sector in terms of occupancy rate, ADR and RevPAR from 2003 to 2006 (Pricewaterhouse Cooper, 2005; Pricewaterhouse Cooper, 2006). With this information, it is inferred that the boutique concept is successful at differentiating itself from other lodging products, while better addressing guest needs and creating value for them. This trend was expected to continue strong throughout 2007 and 2008 (Pricewaterhouse Cooper, 2006); however, with the recent financial crisis, the forecasts did not materialize. Deloitte noted boutique hotels yielded weaker performance and slower growth through the recessionary phase, pulling down the sector’s overall performance averages (Deloitte, 2010). The severity of the recession’s impact on the subsector is illustrated in terms of properties defaulting on their mortgage loans. In Manhattan, New York, the Dream Hotel, a luxury 9 boutique hotel was unable to make continual payments on their $100 million securitized loan. Near the Hudson River, the then still under development and construction Vu Hotel had the property taken by its construction lender when they could not meet loan payments (Prinstin, 2009).
Furthermore, the financial crisis slowed down the rate at which new boutique properties opened, as the lodging sector suffering comparably more than many other sectors in the commercial real estate industry (Mintel 2011; Prinstin, 2009). Additionally, Mintel (2011) reported chain organizations such as Morgans Hotel Group selling ownership of their properties to increase the organization’s liquidity and meet debt payments in face of financial duress. Of greater significance are the properties that were put up for sale. The group’s flagship Morgan Hotel, which introduced the boutique hotel concept to the United Sates, along with the chain’s second most prominent property, the Royalton Hotel, were placed on the market and sold for $140 million US (Mintel, 2011).
Structural change in the boutique hotel subsector
Operators of boutique hotels were mainly independent operators in the 1980’s, but faced with growing demand, dedicated boutique hotel chains emerged. Dedicated boutique hotel chains are chain hotel operators or management companies whose portfolios only contain boutique hotel properties (Mintel, 2011). Malmaison and Joie De Vivre Hospitality are examples of dedicated boutique hotel chains and are two of the larger dedicated chain operators in Europe and the United States (Mintel, 2011; Pricewaterhouse Cooper, 2005). Another example is Morgans Hotel Group, which evolved from a single property, Ian Schrager’s Morgan Hotel in New York, to a chain of six boutique properties (Mintel, 2011). 10
In 1998, the opening of the first W Hotel in New York marked the entrance of a third type of operator into the boutique hotel subsector: major chain operators (Mintel, 2011). Major chain hotels, include the key international lodging brands with diversified lodging operations to include boutique or lifestyle hotel operations. Examples include Starwood with their W Hotels and Aloft properties, Wyndham’s Dream Hotel, and IHG’s with Hotel Indigo. Without a universally agreed upon definition for boutique hotels and an increasing number of chain operators entering the subsector, there will be continual blurring of boundaries between what constitutes as a boutique hotel.
Questions such as whether or not a lifestyle hotel can be too large to be considered a boutique property, or if the mass tourist can become the normal boutique guest will continue to be asked, and where there is money to be made, these questions will be addressed. Already today, large lifestyle hotel brands can provide the similar level of intimate guest service with the help of technology. Guests can walk into any property belonging to a chain hotel organization and staff at the property will know their name, preferences and other personal information thanks to a computer database; even if the guest have never been to that particular property or met any of the employees at that specific property before. Issues facing the boutique hotel subsector
A critical factor recognized hindering continual growth of the subsector is the lack of available sites (Pricewaterhouse Cooper, 2005). As aforementioned, the location of a boutique hotel is part of the product, service and experience delivered to a guest at a boutique hotel. Culturally vibrant areas, buildings with heritage or historical value, and exotic resort destinations will become increasingly scarce as the demand for this limited resources increases every day. Competition for 11 land is not limited to just boutique hotel developers but to the rest of the commercial real estate market and other industries too.
Availability of funding to develop new properties is a barrier to growth according to boutique hotel operators (Pricewaterhouse Cooper, 2005). With the economy still dealing with the aftermath of a real estate bubble burst and recession, obtaining financing is much more difficult than it was a few year prior.
Concept copying is another factor impacting growth of the subsector (Pricewaterhouse Cooper, 2005). As with many service based products, a differentiation strategy is integral to setting an organization apart, attracting guests and remaining profitable in the long run (Taylor, 1996). This is especially true of boutique hotels whose ultimate goal is to go against standards and be different. For example, Kimpton Group opened the first rock n’ roll and wine themed hotel property, propelling them into a highly recognized boutique chain brand, whereas others entered into partnerships with fashion houses.
However, physical differentiation strategies are easily replicable by competitors and with more and more boutique hotels opening up annually, competition between properties will only increase in intensity. To a lesser extent than the factors previously mentioned, human resource poses as another obstacle to continual growth (Pricewaterhouse Coopers, 2005). Boutique hotel operators indicated encountering difficulty finding employees who fit their organization and job position. Boutique hotel employees need to be highly service oriented to deliver the exquisite boutique level of personal and intimate service experience. As a result, retaining employees at the organization is fundamental to the success of a boutique hotel due to the emphasis around the guest-employee relation. With a high turnover rate, it is much more difficult to deliver on the 12 boutique hotel service expectation, as the process of becoming acquaintances with the guest must start anew every time a new employee is hired. In the long run, this will deter guests from returning to a property if they can find another with a more stable group of employees.
Lastly, similar to other tourism products and services, revenue levels of boutique hotels are closely linked to the global economic environment. Through the 08 and 09 financial crisis, some boutique hotels discounted their prices in order to compete for revenue against the rest of the lodging sector. The price wars prompted some boutique hotels to sell room on popular travel bargain websites in addition to in-house discounting strategies. In hindsight, it is now known that association with bargain websites have undermined the reputation of some boutique brands (Henderson, 2011).
Future trends and projections for the boutique hotel subsector The top trends for the boutique hotel subsector were identified earlier this year in the Boutique Hotel Summit in Europe (Boutique and Lifestyle Lodging Association, 2010). Developing a unique experience at a property will be the continual focus for boutique hotels. This is particularly relevant to major chains entering the subsector. These organizations have to break away from the mindset of delivering consistency in each and every one of their properties. Instead, they must devise methods of making each property under the same brand unique in terms of experience, through tangible or intangible methods. In the past, some chains have capitalized on the property’s location partnered with celebrity chefs to showcase the local culture, heritage and specialities, delivering different and authentic experiences specific to each individual property under a single brand. 13
Chain boutique hotels also need to be mindful when choosing locations for new properties. Guests are looking to interact with the hotel and the environment in which it is in, not the brand the property operates under (Boutique and Lifestyle Lodging Association, 2010). Authenticity is another trend that must be maintained at all boutique hotels (Boutique and Lifestyle Lodging Association, 2010). In other words, the property must fit in with the destination in which it is located. For converted heritage and interesting buildings, the integrity of the building should be kept intact with minimal changes to the structural appearance of the building such that the story of the property is maintained. The incorporation of members’ clubs is also expected to become more popular in the future, especially in global cities such as New York and London, England (Boutique and Lifestyle Lodging Association, 2010).
To become a member of these exquisite members’ only hotels, special invites or referrals from existing members are required, wait-lists are also a norm. Although there are many loyalty programs in the tourism industry today, many focus solely on purchase behavior and lack attention towards developing identification between the consumer and organization (Morais, Dorsch & backman, 2004). The process of entering a members’ only club addresses that issue by first strengthening members’ identification to a club through the entry process, and then prompting greater levels of loyalty to the organization and repurchase behavior (Ferreira, 1997).The selling point of these memberships are intangibles such as prestige, exclusivity and privacy at the property, ultimately developing a self-contained social sphere. Membership also comes with tangible privileges such as members’ only access areas and services such as rooftop terraces, social events for networking opportunities (Balekjan & Sarheim, 2011).14
Alike to other tourism and hospitality services, boutique hotels have not escaped the pressure of becoming more environmentally conscious. As mid-level to luxury properties, it is important guests are not forced to become environmentally conscious. Subtle ways of helping guests to enforce a more environmentally friendly stay includes smaller garbage cans and larger recycling bins, or sourcing locally produced and in season ingredients for on-site food and beverage operations (Boutique and Lifestyle Lodging Association, 2010). Presence of in-room technology is a must and continual upgrades of the most up-to-date technologies will be expected from guests. Operators will have to mind the placement of technology in- room however, making sure that they are not intrusive or jarring in the room, particularly in a heritage building (Boutique and Lifestyle Lodging Association, 2010). Lifestyle hotels will continue to proliferate the boutique hotel sector along with boutique B&Bs and budget boutique hotels (Boutique and Lifestyle Lodging Association, 2010).
Budget boutique hotels will be the most prominent new up-and-coming business model for the subsector. Many operations such as Citizen M, Starwood’s Aloft Hotel and Ian Schrager’s PUSH brands have already marked the beginning of the budget boutique trend. Budget boutique hotels are attractive to developers as development costs and construction time are much less than the average boutique property. Moreover, with the intention of constructing smaller rooms, this increases the number of potential sites for boutique hotels; addressing the problem of finding suitable sites (Balekjian & Sarheim, 2011). Other characteristics of budget boutique hotels include limited on-site food and beverage services, usually only vending machines will be available, and creating and promoting common living spaces, such as the lobby, that encourages guest to guest social interactions. With his PUSH brand, Ian Schrager stated, “the idea behind the boutique, as I saw it was meant to touch people emotionally and viscerally and offer guests a15 truly unique experience (Mintel, 2011).”
He will be focusing on the attitude, approach and experience versus physical design for PUSH properties and make the brand inclusive, rather than exclusive. Service at budget boutiques will be excellent but not superfluous, unlike the current premium and luxury tiered boutique hotels (Balekjian & Sarheim, 2011; Mintel, 2011). Geographically, continual growth is expected of established markets in both Europe and United States (Balekjian & Sarheim, 2011). Fifteen new properties by chain operators were scheduled to open between 2012 and 2013 in Europe and Hotel Indigo had eight US properties in the pipelines as of 2011 (Mintel, 2011).
On the other hand, exponential growth is expected in the Asia- Pacific region. In 2002, van Keulen, Biriot and Koh also identified the potential for growth in the region, but quickly established the subsector is still underdeveloped. Through the years there has been growth in this subsector as evident by the increasing number of dedicated boutique hotel chains and management companies such as the Banyan Tree and Boutique Hotel Management Asia. Major chains have also entered the market in Asia Pacific. W Hotels currently have seventeen properties in Asia, four of which are in China (Starwood Hotel & Resorts Worldwide Inc., 2012). China is becoming a major development center for boutique hotels with development starting to occur outside of first-tier metropolises, and making way into second and third-tier cities (Lam, 2011). Further supply and demand side growth is expected in this region as per increasing income levels and forecasted international arrival numbers. 16 References
Aggett, M. (2007). What has influenced growth in the UK’s boutique hotel sector? International Journal of Contemporary Hospitality Management, 19, 2, p169-177 Armani Hotel. (n.d.). Philosophy of design. Retrieved from
Balejikan, C., Sarheim, L. (2011). Boutique hotels segment: the challenge of standing out from the crowd. HVS. Retrieved from http://www.hvs.com/Content/3171.pdf Beerli, A., Meneses, D.G., Gil, S.M. (2007). Self-congruity and destination choice. Annals of Tourism Research, 34,3, p571-587
Boutique and Lifestyle Lodging Association. (2010). Top 10 trends for the boutique hotel sector [Press release]. Retrieved from
http://www.boutiquelodgingassocaition.org/shownews.cfm?nNewsID=4052181 Boutique and Lifestyle Lodging Assocation. (n.d.). Boutique terminology and definitions. Retrieved from
http://www.boutiquelodgingassociation.org/cms.cfm?nPageNo=14694&nmenuid=576 Deloitte. (2010). Europe and Middle East hotel performance RevPAR. Retrieved from http://www.deloitte.com/view/en_GX/global/0caaf6b085912210VgnVCM100000ba42f00a RCRD.htm
Ferreira, R.R. (2008). The effect of private club members’ characteristics on the identification level of members. Journal of Hospitality Leisure Marketing, 4, 3, p41-62 Henderson, J.C. (2011). Hip heritage: the boutique hotel business in Singapore. Tourism and Hospitality Research, 11, p217-223
Hennessy, S. ( October 16, 2006).Can boutique hotels be branded without losing uniqueness?. Hotel and Motel Management, p10 17
Hing, N., McCabe, V., Lewis, P., Leiper, N. (1998). Hospitality trends in the Asia- Pacific: a discussion of five key sectors. International Journal of Contemporary Hospitality Management, 10, 7, p264-271
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Lam, T. (2011, July 11). Boutique hotels in China: the second-tier rush is on. CNNGo.com. Retrieved from http://www.cnngo.com/explorations/life/chinese-cities-jump-boutique-hotelbandwagon-132177 Lim, W.M., Endean, M. (2007). Elucidating the aesthetic and operational characteristics of UK boutique hotels. International Journal of Contemporary Hospitality Management, 21, 1, p38-51
McIntosh, A.J., Siggs A. (2005). An exploration of the experiential nature of boutique accommodation. Journal of Travel Research, 44, p74-81
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Starwood Hotel & Resorts Worldwide Inc. (2012). W World: all hotels. Retrieved from http://www.starwoodhotels.com/whotels/directory/hotels/all/list.html Taylor, H. (1997). Competitive advantage in the hotel industry – success through differentiation. Journal of Vacation Marketing, 3, 2, p170-173
van Hartesvelt, M. (2006, September 15). Building a better boutique hotel: boutique hotels create a reference point, combining design and service. Lodging Hospitality
New Majestic Hotel
New Majestic Hotel Design Case Study 1
New Majestic Hotel New Majestic Hotel
New Majestic Hotel Design Case Study 2
Table of Contents
1 World Outlook: Boutique Hotels 3
2 Introducing the New Majestic Hotel 4
3 Standards: Global meets Local 6
4 The Process of Brand Building 7
5 The Design Process: Infusing Lifestyle with History 8
6 A Design Oriented Organization 10
7 The Business Model: Attracting the Discerning Traveler 11 New Majestic Hotel New Majestic Hotel Design Case Study 3
Love Room, The Library Hotel, NY
Boutique hotels generally target customers in their early 20s to mid-50s. These individuals are also likely to be in the mid-to-upper income range.
1. World Outlook: Boutique Hotels
An increasing number of travelers today want more than just a manufactured experience. While comfort and convenience are still important, they want to be “surprised” with new concepts and high-culture. Boutique hotels are coming to the rescue of these trendy travelers, bringing together art, fashion and history in their design to ensure a lasting impression. The boutique hotel concept, while relatively new to the Singapore market, was invented in the early 1980s. The first two boutique hotels, opened in 1981, were the The Blakes Hotel in South Kensington, London and the Bedford in Union Square, San Francisco. The Blakes was designed by celebrity stylist Anouska Hempel. Bedford was the first in chain of 34 boutique hotels operated by the Kimpton Group, one the eminent players in the boutique hotel industry. The definition of a boutique hotel varies considerably but the following primary characteristics can be agreed upon by the majority of hotel owners and operators: • Architecture & Design
• Target Market
(Lucienne Anhar, HVS International)
Style, distinction, warmth and intimacy are the defining characteristics of the architecture and design of boutique hotels. These features attract a niche of travelers who are looking for a unique experience. Boutique hotels do not follow a specific standard but have clearly defined themes. The Library Hotel in New York for example offers a distinct theme, from music to romance, in each of its rooms. Many hotel owners are also revitalizing older hotels, as in the case of the New Majestic Hotel. However, success still depends on the owner’s ability to combine chic elegance with historic detail.
The characteristic which boutique hotel owners feel distinguishes them from larger brand-name chains is the connection which guests are able to develop with staff. Most of these hotels ensure that staff acknowledge guests by name. This begs the question of whether there is a certain size which defines a boutique hotel. Generally it is felt that a boutique hotel should not exceed 150 rooms, although there are those such as Ian Schrager, founder and president of Ian Schrager Hotels, who believe that the term “boutique” is more reference to the approach and attitude towards the hotel design. New Majestic Hotel New Majestic Hotel Design Case Study 4
2. Introducing New Majestic Hotel
“….there was this small, small little hotel in the wrong part of Chinatown…that was for sale and I thought….there are no really kind of cool boutique…small little boutique hotels in Singapore and I could do something with that.”
(Loh Lik Peng, Founder & Owner, New Majestic Hotel)
The New Majestic Hotel, situated in the heart of Chinatown, is an exciting blend of Singaporean culture, art and design. The concept of, “Singapore Art” while initially hard to fathom, is quickly winning over its sceptics.
Its owner and creator is Loh Lik Peng, a former lawyer turned hotelier. The
New Majestic Hotel is his second foray into the boutique hotel business after the widely acclaimed Hotel 1929, at Keong Saik Road.
The hotel features a dramatic all-white open concept lobby
with vintage Compton fan
The highly-rated Majestic Restaurant is a modern
interpretation of one Singapore’s favorite dining rooms New Majestic Hotel New Majestic Hotel Design Case Study 5
The 30 rooms in the New Majestic feature an exciting array of designs. Some have floor-toceiling mirrors; others have aquarium-like bathtubs in the middle of the room, four-poster beds suspended by poles from the ceiling or a garden terrace with an outdoor tub. 9 of Singapore’s up and coming artists were commissioned to create site-specific artwork to ensure that the entire thematic, visual experience is achieved. These artworks range from joyful pop-art pieces to upside-down anamorphic messages and fuse with the vintage furniture to create a truly unique experience.
Lik Peng also commissioned 5 prominent Singaporean designers to personalise 5 suites. These talents from the fields of interior and graphic design, fashion and film production, were given a free hand to decide how they wanted to design the suites and what kind of message they wanted to convey. Award-winning graphic designer Theseus Chan for example constructed his design out of plywood. The box-like design is intended to show that living in Singapore is similar to living within the confines of a box.
(Colin Seah, Ministry of Design) New Majestic Hotel
New Majestic Hotel Design Case Study 6
3. Standards: Global meets Local
Lik Peng’s belief is that any venture he undertakes must be set in a particular context. Although the business itself may inevitably take on some Singaporean characteristics, he feels that it is crucial that the neighbourhood and history must not be ignored. The New Majestic Hotel is intended to appeal to a niche market, who appreciate the rich history of Chinatown and who desire the high-culture experience which it has to offer. The hotel has been reviewed by several internationally-renowned travel and lifestyle magazines……. “The cavalier glamour of the 1950s is in the air at Singapore’s newest hotel, a swish refurbishment called the New Majestic. Like Hotel 1929, its more moderately priced sister property that still packs a big-style-per-buck punch, the New Majestic’s strength lies in its visual DNA.” – Wallpaper In 2006 it was listed by Condé Naste Traveller as one of the world’s most hospitable hotels. The New Majestic was one of seven winners in the Designs of the Year category in the President’s Design Award 2006.
“The New Majestic Hotel is an imaginative change-of-use of the traditional Singapore shophouse, and is an icon amongst boutique hotels. It is an excellent example of design collaboration involving the owner, multiple creatives and consultants. Owner Loh Lik Peng describes it as “a stimulating brew of local culture, design and the arts that pries apart the moulds of convention.”
New Majestic Hotel subtly captures changes in social perceptions, drawing reference from the site’s history and culture on one hand, and contemporary lifestyle on the other. Every space has been artistically designed with unique qualities and features, and is at once exciting and reassuring. The design reflects the spirit of the times, which appeals to a new breed of hotel consumers who value their individuality while seeking to network with others in a setting to write home about.” – Citation for President’s Design Award 2006 “Being a designer in Singapore is all about getting out to a larger market….As a designer I think it is important to always look in the context…the wider context . Singapore is a small market….It can have a Singaporean identity but you have to look at the wider context” New Majestic Hotel New Majestic Hotel Design Case Study 7
4. The Process of Brand Building
Lik Peng set out to build a distinct location which while being internationally appealing, still exudes local charm.
“There is a certain level of design enlightenment among the global cosmopolitan travelers who are looking for a certain kind of local yet global hospitality experience. It wasn’t a new standalone building; it was an existing pre-war shop-house which yielded a incredible site and contextual opportunities because of the idiosyncratic way spaces are made inside.”
– Colin Seah, Ministry of Design
With the stringent regulations of the Urban Redevelopment Authority, the New Majestic’s façade is preserved but with slight changes to freshen it up. This is entirely consistent with Lik Peng’s intention to build businesses which are contextually relevant. His ideas reflect that of well-known hotelier Ian Schrager: “I like the word subversive. The idea is to do something contrary, something that violates the status quo, and as long as it is well-executed it works. If it’s not well executed, then it’s just trendy.”
“Its really all about looking at the customer rather than the location or things like that. In a way that informs your location…but largely it’s about saying…well for example 1929 is in a red-light area of Chinatown. It’s a bit counter-intuitive….but the way I looked at it was…this is THE most interesting part of Singapore. This is a really local part…it is totally not manufactured.” – Lik Peng
“We are in the entertainment business….I can only sell a design once. Everything behind has to work for somebody to come back a second time.
The place needs a personality, the staff needs to have a personality, the design element can pay if you do everything else right.” – Ian Schrager New Majestic Hotel New Majestic Hotel Design Case Study 8 ABCD 5 The Design Process: Infusing Lifestyle with History
The New Majestic Hotel is part of a conservation project and stands on what was known as “Mistress Street”. The reconstruction of the hotel was led by DP Architects who spent 12 months refurbishing the 80-year-old hotel.
“When you come in, there is a shock effect of what the past is like…the big grand staircase is white and full of movement upwards and it shows aspiration and hope.” – Tai Lee Xiang, DP Architects The rooms, designed by Colin Seah of Ministry of Design reinvent the idea of a hotel room. The original 50 rooms were reduced to 30, each with a unique style. Collaborating with local artists and designers, what was previously a place to rest has been transformed into a distinctly local, visual adventure.
“For the New Majestic Hotel Project, the brief was hotel designs for the future. MOD conceptualized the brief with the consideration of the new generation Singaporean hotel user who see hotels as places to party. It was not a question of cultural, but the revering of the local. Addressing the way people live” – Colin Seah, Ministry of Design Much care has been taken to retain elements of the original Majestic design. Some of the guestrooms still have balconies and the original stained glass windows have been restored. However, modern comforts, such as a plasma TV, Kiehl bathroom amenities and 280 thread count bed linen are still very prevalent (Hotel Management Network, 2007).
Five Guest Designers
A much talked about part of the design has been the work of five of Singapore’s most established designers in customizing the five of the hotel’s suites.
1. Glen Goei – Film & Theatre Director – “Wayang Room” Inspired by Zhang Yimou’s, “Raise the Red Lantern”. An Asian Boudoir with crimson walls, black lacquer furnishing and red lanterns hanging from the ceiling. New Majestic Hotel New Majestic Hotel Design Case Study 9
2. Daniel Boey – Fashion Show Producer – “Pussy Parlour” Features a French chandelier, neon lights, crinkly pink linen, a brass four poster bed and
3. Wykidd Song – Fashion Designer – “Fluid”
The room is all about space, swirls and simplicity.
4. Theseus Chan – Graphic Designer – “Work”
The predominant use of plywood is meant to redefine “living in a box”. 5. Patrick Chia – Furniture Designer – “Untitled”
The extensive use of cement is meant to celebrate modern class European design. Other Local Designers
Justin Lee is behind the most controversial of the rooms which include, “Samsui Woman”, “Da Jie” and “Flag”. He sends strong social statements by using iconic images in the décor. Other local designers who were involved in the hotel design include Safaruddin Abdul Hamid, Lee Meiling, Heleston Chew, Tay Bee Aye, Miguel Chew, Kng Mian Tze and Sandra Lee. (Hotel Management Network, 2007) New Majestic Hotel
New Majestic Hotel Design Case Study 10
6. A Design Oriented Organization
“..for me in terms of how I view design…I think it’s a very integral part of how I run my business simply because if you look at my generation…its very highly mobile. I realized that…how people viewed design, how they viewed culture….was changing…there was less walls between those things and for me looking at design was really a part of communicating with people about how I wanted the project to be. Really the whole idea of design for me was very collaborative because…I wanted to involve as many creative people as possible from many, many different fields.” – Lik Peng New Majestic Hotel New Majestic Hotel Design Case Study 11
7. The Business Model: Attracting the Discerning Traveler
They main draw of the New Majestic is its focus on art and high-culture. Lik Peng has dedicated much time and effort in enlisting the services of local artists and designers to ensure that these goals are met.
“The way I go about looking at returns on investment…particularly for artwork…I go about it in two ways. I look at it as part of the overall project and I say if I put this much into it…and I think of what I should be able to sell….whether its room rates or the other little different products that we do and that’s really how I calculate. And there are some parts of it that …you can never justify in pure returns.” – Lik Peng While Lik Peng acknowledges that there is no robust way of calculating the returns he makes from investing in art, he feels it forms the intrinsic part of the project. It is his belief that these unquantifiable, emotionally appealing aspects will pull in the discerning traveler who will be willing to pay higher than average room rates.
The key factor in ensuring the sustainability of such a model is identifying the permanent and transitory elements of the art pieces and achieving a balance in terms of the cost and overall benefits received.
“… I have always thought that the people who would stay with us would appreciate the fact that we were in the wrong part of town.” – Lik Peng