Boutique Hotels Continue to Gain Momentum in 2019

ATLANTA—Boutique hotels are gaining momentum going into 2019.

Boutique projects represented 17.8% of the rooms in the development pipeline as of June 2018, according to an article, authored by Robert Mandelbaum, director of research information services at CBRE.  Last year, boutique hotels comprised 3.2% of the total U.S. lodging supply in 2017.

There are several reasons why boutique hotels are popular among developers: They offer unique, localized experiences favored by today’s travelers; give developers opportunities to be creative with facilities and services offered; and achieve premium levels of occupancy and ADR.

Through the first six months of the 2018, RevPAR levels were up nearly 5% from the first half of 2017.

Looking towards 2019, all six boutique categories—legacy brands/upper-priced; legacy brands/lower-priced/soft brands; referral groups; boutique-lifestyle brands/luxury; and boutique-lifestyle brands/upper-upscale—are once again forecast to achieve gains in RevPAR. That being said, like the U.S. lodging industry as a whole, the pace of RevPAR growth will slow down. Boutique-lifestyle brands/luxury properties are projected to enjoy a RevPAR gain of 3.1% in 2019. RevPAR growth for the remaining five categories is expected to be less than 2%.