October 20, 2014

Small Boutique Hotels Growing

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Have you ever traveled on business and yearned for a quiet, memorable place to stay, away from the hordes of other business travelers? Or a unique vacation experience?

Small, independently-owned boutique hotels are the answer. And these days it is getting easier to find such hotels.

According to Zack Paul, General Manager of The Hibernation Station, an upscale cabin hotel in West Yellowstone, Montana, a trend is growing toward independent hotels:

“A small steady migration is taking place toward privatizing hotels. Hotels that have been part of a chain are breaking off and new ones are being put up without a franchise. These small private hotels are sought after mostly for something they offer that is different. It could be a mystical offering or just something romantic or representing the environment of the area in which they are located. The franchise hotels, on the other hand, deliver consistency no matter where you stay across the globe.”

Mr. Paul says that the costs of a franchise, including signage, can cut deep into a hotel’s profits. In popular destinations such as Hawaii, the Grand Canyon and Yellowstone Park, occupancy rates run high most of the year, and a franchise is not necessary to fill up the hotel.

The Web has been a significant factor in driving the independent hotel trend. He says, “In the past you needed the large chains’ reservations horsepower to fill the hotel. Now the Web can take the place of that engine, depending on location.”

Web-based travel services abound. But most cater to the big hotel chains, and not the small independent hotels.

One online travel service that does target small boutique hotels as its primary hotel partners is Academic Ambassadors. Academic Ambassadors is a niche-based travel service that serves the non-profit community. Interestingly, it matches up the academic and non-profit traveler with small independent hotels.

Adam Siegel, the President, is himself a fundraiser for a college. He says the non-profit traveler was an underserved demographic until he started his Web-based company over three years ago:

“Surprisingly, no one had ever aggregated my peer group for travel marketing. Fundraisers alone spend millions on hotel rooms per year. Add to that admissions counselors, museum curators, visiting lecturers, social services administrators, recruiting coaches…and you have a very large market indeed.”

Mr. Siegel goes on to describe how his Web-based service gives a boost to small independent hotels:

“The small boutique hotels, which are the model partners for this service, have limited ad/marketing budgets. They rely on word of mouth and favorable PR. What I have provided is expedited (electronically) word-of-mouth marketing for them (for free!).

They love the exclusivity of this arrangement as there are now more boutique hotels than ever with still more in the planning stages.”

He notes that most independent hotels are in popular destination locations, such as San Francisco, Miami and New York. It is impossible to find such a gem in a place like Pittsburgh. But he also thinks:

“You will start to see the filling of the gaps to avoid competition and increase notice. It does take some vision, however, to see Knoxville as the next profit center.

With the success of the boutique hotel you are also seeing the big chains get into the act. The “W” hotels, for example, reflect the funky style originated by the Kimpton Chains and others. They do this on a very large scale, however. And something is lost.”

Small hotel businesses can compete effectively against large hotel chains by offering their own uniqueness and being different from the large chains. And the Web, with travel services such as Academic Ambassadors is critical for giving small hotels the edge.

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Anita Campbell - CEO


Anita Campbell Anita Campbell is the Founder and Publisher of Small Business Trends and has been following trends in small businesses since 2003. She is the owner of BizSugar, a social media site for small businesses, and also serves as CEO of TweakYourBiz.com.

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