What exactly is a boutique hotel?

In today’s hotel market one may well ask what exactly is a Boutique Hotel? It seems the word BOUTIQUE has been misused and marketed irresponsibly by many hotel owners and operators worldwide. Nowadays you see the word associated with 2-star Days Inn styled rooms at so-called ‘eco’ resorts where the only eco aspect to their operation is a few plastic bins for so-called separate waste disposal in the guest rooms. Both the word ‘eco’ and ’boutique’ are clearly overused and in most cases not at all relevant to the property marketing itself as being so.

So for ” boutique” some education for those in need of it.

A Boutique Hotel needs to reflect the following. Small, fashionable and independent; when lacking innovative design and stylish high quality personal operations and impeccable amenities, these small hotels are in violation of the fundamental boutique motif and are merely small. Add to what boutique should reflect in a hotel, innovative design, distinctive, individuality, flair, original, and creativity, and you can see how this word has been turned into more than rather a vague term confusing the market, and undermining those that actually achieve it.

Cool, or hip or historic, themed, marketed for business or leisure and more often than not both, the meaning is now an extension of the original boutique hotel urban properties where the key descriptive components were fashion, elegance, glamor and style. Nowadays the word transcends these earlier definitions and crosses many hotel classifications, from small to not so mall, luxury to affordable, urban to resort, chic and cool to traditional. Boutique Hotels have many sub segments.

Ignoring the attempts by chains to be boutique-ish, the W brand for example, and the Malmaison Group in the UK, boutique hotels independence has enabled owners and operators to keep at arm’s length corporate standards of the chains that more often than not hinder the creative ideas of those employees on site in supplying distinguished and personalized hospitality services to the travelers they know.  In boutique hotel operations it is much more than employees knowing each guest’s name, which in some of the so-called larger boutique hotels is an impossibility anyway.

It is in my mind more a return to traditional hotel keeping, knowing your guests and fully understanding their requirements as individual travelers and then actually delivering that service in an exceptional manner, all within an environment that has innovative design, distinctive characteristics, where individuality and flair shine through, and the whole experience to the traveler is original and creative.

Some development priorities summed up:

  • An at home feel in both size, elegance and throughout it is of a different perspective.
  • Inviting, at peace with itself, snug, social.
  • Top of the line, select and personalized. Personalized means sincere and warm.
  • Home made, hand-made, not the standard factory produced stuff. This goes not just for the set up and fit out, add to that food, beverages, paper, amenities.
  • Hello to the designer! Square foot by square foot thought through!
  • Concepts that are of quality, from design to delivery.
  • Amenities unseen near you, out of the box, from soaps, to personalized jams, cookie wraps, cocktails on arrival, smart phone, limos to the office, and the house essence.
  • And time and time, time to create, time to prepare to deliver!

For boutique hotel development planning and management that deliver on the true concept of the word, contact mark@turnerlodgingco.com.

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Condominium hotels and resorts, advice for investors (Part 1)

The term condominium hotel is best summed up by this description: The accommodation units are individually owned but they are under a management umbrella and marketed as a unified group and operated as a hotel. Add on some common area facilities such as a spa, a front desk, restaurants and bars and administrative areas, with in-room dinning, property upkeep and maintenance .

All very simple really, or is it? What makes a condo hotel unit such a complicated piece of real estate  to purchase and be owned? The following commentary is not unheard of. Not what you will hear from a real estate agent!

The most important aspect to consider is the relationship between the players, i.e., the developer and real estate agent who are hell-bent on selling the units, the rental management operator or hotel operator who is concerned the buyers are being misinformed with hugely overstated revenue projections by the developer’s sales team (revenues they will never be able to achieve), the management of the common areas (strata) who may or may not be the rental or hotel operator who is concerned that the owners are not fully aware of all the ongoing fees and cost involved in looking after the property as perhaps these fine details have not been presented in the purchase contracts (a classic response to any one who asks is “they are being worked out right now”) and the owners, the buyers who buy into it.

First up the buyers (the owners ) review all those glossy sales packaging, great pictures, revenue projections in your face that have little or no realistic market research behind them, which may or may not resemble the actual projections the management company presented to the developer, who package it all very well of course with fine print that is basically meaningless. Your home in paradise!

Then owners end up being peeved off with the management company who have to bear the brunt of the owners’ frustrations as they gradually find out that their net revenue, after all the commissions and operating costs, in no way cover all of the ongoing costs, and that includes strata fees to cover the management and upkeep of the common areas and the like, all the general repairs and maintenance, taxes, etc. Especially so after deducting the rental operator’s fees that could be near 50% of revenue.

So as condo hotel ownership gets to be a bit of a financial let down for the owners, the pressure gets tight, everyone is trying to reduce costs and maximize revenue. So the owner decides it is about time to take a trip and have a bit of a break, and experience his second home and see what is actually going on. (See Part 2 of this most interesting topic!)

Condominium hotels and resorts, advice for investors (Part 2)

Upon arrival the front desk agent greets you in the same friendly manner as they would greet a normal guest, and a key is handed over and you make your way up to your unit.

As you enter you are immediately taken to the dark marks along the wall near the entry  door, luggage marks you guess, the dining table has large scrape marks and one leg is partially broken, there are  glasses and plates missing from the stock you originally purchased, the towels look faded and worn, the carpet hasn’t been vacuumed well, the drapes are not fitted correctly with broken attachments at the top and the bed sheets have hairs on them.

You reflect back to your last monthly statement, which details costs of 50% of revenue to the rental manager, $275 in maintenance and repair costs, the electricity and water bill, your portion of travel agents commission costs and credit card commissions, and the hotel marketing franchise fee, and then you try to figure out how much if any will be left over to pay the mortgage and property taxes. You also note last month was the high season and you couldn’t even stay in your unit so you expected your bottom line income to be one of the best months of the year.

You ask to speak with maintenance about the work not completed in your unit, and get transferred to the rental management company’s in-house maintenance department. A voice mail kindly responds with a message request, which you leave, which is not replied to.

On return from a day enjoying the sights, you decide to speak to the rental management company to complain, firstly about all the revenues which are below expectations, and then all of the repairs and maintenance issues you feel are costs that should be borne by the rental management company as the damage you have seen in the unit has to be renter and guest related and not owner related.

A conversation then occurs that focuses on the definition of what normal wear and tear is, and the owner’s responsibility in covering normal wear and tear costs, but the broken table leg is agreed to be fixed by the management company at their costs. That makes you feel good, until you remember the rental income issue was never discussed. You then make a call to someone else and are reminded that there is a lot of competition and the rental market is not growing as was originally thought, but “we are out performing the competition,” what ever that means. You decide it’s time for a night out to relax and take a meal in the hotel’s restaurant thinking any profit will be reflected in your next monthly statement until you realize on return to your unit that the hotel management company does not share any profit in other areas of the hotel other than income generated through the rental of the units.

Boy, this is getting messy you think, and off back down to the bar for a night cap! (Continued in Part 3!)

 

Boutique hotel development room design considerations

In designing and planning a boutique hotel room basic design elements take center stage at the commencement of the development process..

Jumping from the planning of the guestroom floor with the slab and design configuration options, defining the room mix is at its core based on the market study, or the basic understanding of what market the hotel is to attract.

The guestroom program defines what bay within the architectural design will be allocated to king, queen and twin bedded rooms, the variety and number of junior and king suites, service areas, and what connects to what directly. The design team, and that includes the interior designer at the outset, studies a wide range of options and room layouts paying particular attention to the optimum width of the architectural bays, and how to use them to best advantage.

Over the years it has been ascertained that a width of a hotel bay and the associated net width of the interior of a guestroom in a single bay, be at a minimum 4.1m for an upscale property. This permits a major advantage in that it allows the king bed to be positioned against the bathroom wall and not as one usually finds in a standard hotel room on the side of the wall. It should be noted there is not that much advantage in a wider width unless it reaches 4.9m. Then a lounge or/and work area can be placed on the opposite wall to that of the bed, and allows for a 5-fixture bathroom.

The market definition for boutique hotel usually arrives at a consensus that 75% of the rooms should have king beds with additional keys being allocated to single or larger suites and queen queen rooms. In boutique hotels  the rooms are usually somewhat smaller than the norm given the fact many are renovations of old hotels that owners have  acquired at an attractive price and cost-effectively remodeled, the role of the design team becomes even more important in applying techniques for combining the guest activity zones within a room in a way that increases the flexibility of use.

To fit the market position as a true boutique hotel, projects need to create elements that distinguish themselves from being just a traditionally renovated room, adding flair and humor to give distinction from just a remodeled hotel room.

Nowhere in the room is the planning and design more important than in the guest bathroom;  to maximize the efficiency of design, bathrooms are positioned in pairs, together with the pairing of two guests rooms back to back.

Usually total guestroom area allocation at a minimum for an upscale property equates to about 24 square meters for the living area before space is allocated to a closet and an entry area, with a 1.8m by 2.8 meter bathroom. Total guestroom of 36 meters square at a bare minimum.

Summing up, 3 key areas need addressing, the net width of the inside walls, the length and the size and shape of the bathrooms. However it is not so much the size, it is how that size is utilized that holds the key to a well designed market-focused boutique hotel room.

Larger and more sexy bathrooms for boutique style properties are obviously more important than in a 3-star branded hotel at an airport. Guest bathrooms with compartmentalized toilet, separate shower stall with spa style shower heads, 2 sinks, and a tub are becoming more the norm and guests are sure to measure the boutique hotel experience to what  they enjoy in their homes. Obviously exceptional good use of space by the interior design team for each square foot available can overcome in the guests mind any limitation of size of the living area and the bathroom.

However the space is utilized, the bottom line is that innovation and artistic expression need to go hand in hand with practicality, designs that combine good flexible function and comfort within an established budget based on the market positioning, with technology aspects within the room that are easy to use.

For more advice in the design of  boutique hotels contact Turner Lodging Co; remember, a hotel design team is only as good as the hotelier who guides and inspires their creativity, helping them to integrate operational efficiency and day to day functionality into the design as only a hotelier could.

What hotel star rating do you need?

Do you know about hotel star ratings? Ok they are generally different from one county to the next, for good reason. In Austria a 4 star hotel needs to have a 4 course set menu available daily in the restaurant, in Hong Kong room sizes are smaller, that would have an impact on a North American standard rating. Hence no world wide hotel rating system exists.

Where do you really stand? More importantly where do you want to stand? What is your proposed market positioning to maximize ROI, how do you propose to get there?

Do you have an asset management plan that is geared to unlock value in balancing your star rating with what you need to be and no more?

Consider all of this!!

The following items are considered during the inspection process by that hotel inspector  

1. Guest Arrival Phase

Advertising/Media Professionalism; Reservations/Phone Assistance; Restaurant Location; Signage; Building Appearance; Parking; Valet Parking; Grounds; Entrance; Maitre d’ Stand; Coat Room; Initial Greeting; Cocktail Lounge (Location/Décor/Service); and Seating.

2. Guest Room and Bath

Living Space; Decor; Drapery; Linens; Technological Items (TV, Telephone, Ipad etc.); Minibar; Odor/Ventilation; Heating/Air Conditioning; Furniture; Beds; Walls; Closet/Storage/Drawers; Fixtures; Lighting; Floors; Housekeeping; Additional Amenities; turn-down Service; Bathroom Linens/Amenities/Physical Product; and Robes.

3. Public Spaces

Lobby/Public Spaces; Elevators; Hallways; Signage; Banquet/Meeting Space; Pay Phones/House Phones; Temperature; Public Restrooms; and Security.

4. Product/Services

Concierge/Guest Services Staff; Fitness Center/Equipment; Day Spa Equipment; Fitness Center Staff; Day Spa Staff; Fitness Center Services; Day Spa Services; Fitness Center/ Housekeeping; Day Spa Housekeeping; Business Center Equipment; Business Center Staff; Business Center Services; Gift Shop Staff; Gift Shop Services; Retail Outlets Staff; Retail Outlets Services; Laundry/Valet; Shoeshine; Newspaper Delivery; Pool Cleanliness/Safety; Pool Lounge Area; Tennis Court Conditions; Tennis Court Services; Golf Course Conditions; Golf Course Services; Beach Condition; Beach Services; Condition of Hiking/Running Trails; Skiing/Snowmobiling; Watersports Services; Watersports Equipment; Children’s Programs; and Transportation.

5. Departure

Check-out; Bill Accuracy; Baggage Handling; and Valet/Car Services.

6. Food and Beverage

Room Service Order Taking; Room Service Timeliness; Room Service Delivery; Room Service Product; Room Service Pick-up; Bar/Lounge; Primary Restaurant Rating  Secondary Restaurant Arrival; Secondary Restaurant Physical Property; Secondary Restaurant Service; Secondary Restaurant Culinary; Secondary Restaurant Beverage; and Secondary Restaurant Departure, etc etc etc!!.

Confused? So you should be.

What’s best for a property is no easy answer. What level of service and product standard will maximize your ROI? What investment plan do you have to make sound capital investment  plans that will position your hotel correctly and create or unlock asset value?

In need of help, the hard part, the implementation? Then contact us, we can help you consistently achieve your desired service and product standard that fits into your asset management and operations plan that will maximize your ROI.

Restaurant development and operations

So you want to develop and operate a restaurant. In a hotel, in a resort, a stand alone, where ever. Consider the following, and these are just the basics!

The restaurant business concept stage

  • Do you have a restaurant development check list?
  • What is your development cost estimate and timeline?
  • Do you know how to get your team together and who should be in it?
  • What will be your concept and unique positioning and branding and how are you to develop name awareness?
  • What kind of analysis of the competition will you focus on?
  • What future expansion is envisaged and how will you expand your brand awareness?
  • What suppliers are available with what product?
  • What menu will suit?
  • Do the initial figures work?

Business planning and operations

  • What legal structure suits you?
  • How deep will your market analysis be so you can ascertain the needs taking into account competitive offerings and pricing?
  • What will your management and support organization be? Do you know how to create your management structure and organization, skilled in operating one?
  • Have you done a feasibility study and are you capable of creating your detailed operational business plan?
  • Building, leasing, joint ownership, what is your development plan?
  • What professional and advisory support will be needed? Need expert advice with startup expenses and capitalization, and other startup costs and your financial plan?
  • How will you fund this? How will you fund growth?
  • How do you implement administrative and financial reporting that makes sense?

Issues to consider with the restaurant location and its actual site

  • Do you know why the real estate aspect matters?
  • Will you lease?
  • Are you knowledgeable enough to negotiate a lease with a fair rent?
  • Do you know all the design and architectural issues needed to be addressed and managed?
  • Are you skilled in compiling technical  agreements with service providers? What professional assistance is needed?
  • Are you skilled in restaurant space planning, kitchen area and adjustable space planning, or will you leave all of that to others?
  • Have you considered design aspects including the consistency of appearance, color, curb appeal, furniture, fixtures & equipment, intimacy, lighting, music, signage? What about parking, insurance, permit needs?

Menu and beverage considerations

  • What strategies are you implementing with your menu and its menu design?
  • Know what menu engineering means going into operations?
  • Who are your vendors and why, why will you purchase from whom?
  • What hygiene and food storage  standards will be implemented?
  • Can you cost out a menu, control inventories, understand what a preparation list is, calculate the cost of goods sold, and have the skills set to lead the team and your chef?
  • Do you understand the responsibilities of owning a liquor license, other liquor license considerations, knowledgeable on wines, and all other beverages?

Marketing your restaurant operation

Do you know how to create and utilize a website, direct mail and data management? Compile monthly email newsletters, identify best advertising options, make use of special events, use media releases to best advantage, write articles, make best use of the local business network, put local networking functions together, create culinary events?

Human resources

How skilled are you in the hiring process, pre-employment screenings, compilation of  the employee manual, training manual, creating the job specification and job description for each position, your service and kitchen training and development plan,  defining your service standards, initiation of incentives, payroll control, labor and employment contacts, best practice and work scheduling?

Then you have to run it, and grow it.

Where do you begin? Restaurant development and operations are complicated, need advice? For advice that works to save you from going broke, contact Mark, at least for a chat!!

Resort asset management and rooms revenue management

For most mid and smaller sized independent resorts one does not have to invest in a revenue manager to reap the rewards of applying some simple rooms revenue management  tactics to your asset management program to improve your bottom line.

This role is a key daily component of the Manager and whoever is overseeing front office operations.

It can be a bit over the top when you get involved with revenue management experts who seems hell-bent on making this process sound more complicated than it need be.

Simply put revenue management is a process of anticipating hotel occupancy and market demand and to determine how it will affect your hotel, once you can anticipate your market demand then you can correctly positioning your rates.

Firstly put your occupancy and average room rate to one side and think of your hotels revenue income per available room, this is called Rev Par. You can calculate this taking your occupancy (70%) and multiplying it by your average room rate (S$ 100), therefore the result is 0.7*100 equals $70.

Most of us know that in general terms improving ones average room rate generates more profit than just increasing ones occupancy. The added revenue generated is not subjected to operating costs associated with improving occupancy. So we need to focus on both in tandem. This is a bit is a waste of time if ones occupancy is always so low that one never has those peak and high demand periods, but lets assume you like most hotels you have some.

Please note here that lowering ones rates in general across the board to drive occupancy tends to be a fools game, only rarely will this result in improved bottom line profit. Say you increase your rev par to $72.25 by dropping your rates from $100 to US$ 85 and by some miracle that stimulates sales to 85% occupancy. A 15% drop in price has some how generated a 21% increase in rooms demand.  Not very likely. Then you take the associated operational costs, and that includes maintenance and replacements applicable for those  additional rooms sold, and guess what, you are worse off. Then you have to figure out how to get the rates back to where they where.

Revenue management simply takes advantage of increased demand periods.Take that competitors study you have just competed which will detail all your competitors pricing and ask yourself:  are my rates correctly positioned for my market, do we offer value, are we truly competitive. With that knowledge the revenue management process you apply is simply having complete knowledge of the market demand for hotel rooms for your local area and ascertaining how that will affect you property, and with that knowing what rate strategies you can apply to improve your rev par through room rate pricing. Maximizing your yield potential. The process is to create a “base” of business through a range of rates to appeal to a wide range of potential clients.

Once this base business is booked, by whatever market mix, lower rates can then be closed for sale and higher yielding rates can apply The key to successful revenue or yield management is to review advance reservations and make rate close-out decisions as often as might be necessary; generally, three times per week.

Hotels practicing revenue management gain an insight into the ebb and flow of business, knowledge of reservations booking pace, and a true understanding of factors which impact occupancy and average rate. Nothing complicated, and although there are many different strategies one can use it just boils down to good old common sense that need not be over complicated by those experts.

Larger more complicated resort hotels have far more complex revenue management  models, where some expert asset management advice will go a long way to reap better financial returns.

Contact us for assistance in creating your resort asset management plan incorporating winning revenue management strategies that will cost you far less than the financial reward you will reap.