The upward trend to downsizing

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La Maison d’Hotes in Jumeirah, Dubai, offers many of the services of the bigger hotels, such as meeting facilities, airport transfers and in-room internet, with only a fraction of the rooms.

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The Residence and Spa at One&Only Royal Mirage is representative of growing trend to a “resort within resorts”.

Reading the news headlines generated by the Middle East hotel industry, sometimes it is difficult to imagine exactly where all the new developments are physically going to fit in.

With property after property springing up around the region - often luxurious five-star resorts with more than 300 rooms - travellers are becoming spoilt for choice in terms of hotel accommodation.

According to a study published in the Cornell Hotel and Restaurant Administration Quarterly, focus groups of business travellers found that many viewed hotel attributes "as merely matters of convenience or good value, rather than true luxury".

The focus groups concluded that luxury is "in the eye of the beholder" - a concept which presents hotels with enormous difficulties to tailor their product to a full spectrum of guest requirements and perceptions.

This is perhaps where the trend towards boutique hotels as a service model to deliver luxury achieves its greatest strength: economies of scale leave it better equipped to cater to individual tastes.

Therefore while large hotels are offering bigger and better incentives for guests, a growing number of smaller boutique hotels are entering the market offering more personalised services as a point of differentiation.

And, importantly for hoteliers of these smaller boutiques, it appears the market for boutique hotels in the region is largely untapped.

Trend towards small

Leading Hotels of the World (LHW) senior vice president of marketing Marshall Calder said there was growing demand for smaller hotels in the Gulf region.

"While there is certainly a strong market for the mega-resorts and seven-star developments, in contrast there is also an increasing demand for the levels of personal attention and intimacy you can only experience at a small hotel," he said.

"The Emirates Al Maha Desert Resort and Spa, for example, exemplifies the type of hotel that can only deliver a very particular experience because of its size and the very nature of its facilities.

"The Chedi in Muscat, and the Banyan Tree in Bahrain also offer unique experiences possible only at smaller scale properties.

"Even in the context of a large-scale resort, there are smaller ‘resorts within resorts' like the Residence and Spa at One&Only Royal Mirage to cater to the guest seeking the more intimate luxury experience."

LHW Middle East director of sales Michael Lutze said the company had realised this guest trend was slowly emerging when it introduced its Leading Small Hotels of the World entity in 1999.

Last year, of the more than 600 hotels that inquired about membership to LHW, nearly half were small hotels with 100 or fewer rooms, he said.

"There is a big differentiation these days between a good hotel and the best hotels; and it is service," Lutze said.

"If you consider a smaller property, there is a smaller team, people recognise you, and people know your name. It's a much more personalised experience, and therefore it's a more luxurious experience.

"People seem to be more happy to pay for that luxury."

Lutze said this was not a complaint about the service at larger hotels, but rather an observation about the operational constraints they had to conduct business within.

"Different people want different things, but most want good service and personalised service," he said.

"Once people actually stay in these smaller places they realise what a difference it really makes. The next time they travel, they go out and actively look for it - this is why more and more of these hotels are being built and being booked.

"There are also those people that don't want to be hassled, they don't want to be asked how their food was as they walk through the lobby, so it's not a plus for everyone," he continued. "But the trend [towards smaller facilities with more luxurious service] is noticeable."

Smaller hotels could capitalise on different locations, Lutze said.

"In some of these luxury destinations, to have a 600-room hotel on a little island would defeat the objective," he said.

A (small) case study

Opening in February this year, La Maison d'Hôtes is a 22-room boutique hotel in Jumeirah, Dubai. Managing director Julie Renaudie said although she and business partner Claude Berquier faced numerous issues while setting the hotel up, the "spirit" of the hotel remained critically important throughout the project.

"What was difficult was explaining to the administration in Dubai what we were trying to do," she said.

"No-one knew exactly what it could be, nobody understood what it could be."

The first issue faced by the pair was finding suitable buildings. Although original plans were for a 10-bedroom guest house, Renaudie said there were no available buildings with the correct number of rooms - including bathrooms for each bedroom.

Their solution was to secure two buildings, each with seven bedrooms, which were then joined by a third building at a later date.

"All of a sudden we had 22 bedrooms, and our project has doubled," Renaudie said.

A second issue was in organising finance, and with banks refusing to back the project they decided to finance it themselves.

Relying on Berquier's experience running guesthouses in France for seven years, Renaudie said the hotel had not had any difficulties organising suppliers.

But finding staff who were flexible enough to cope with the demands of jobs in smaller hotel developments was extremely difficult.

"It's not like a big hotel, where you have staff for one particular task," Renaudie said. "You need to have flexible people, and people who are familiar with face to face service."

While not in direct competition with the large luxury resorts popular in Dubai, La Maison d'Hôtes is in a position to offer some of the services that LHW's Lutze saw an increasing trend towards.

"You feel like you are at home, not in a hotel room," Renaudie said.

"Each room is individually decorated. We are always here, we can call them [guests] by their name, identify their habits if they come back.

"If you have more than 20 bedrooms then it gets difficult - we are only human. But we are at a stage now where we can spend 10 minutes each day talking with guests."

While conceding the experience was not for everyone, with some preferring the anonymity of bigger hotels and chains, Renaudie said the "family spirit" was always available.

"Businessmen can come to Dubai and spend a week and not meet anyone other than the people they were meant to meet for business," she said.

"Here they go to the pool, they meet the same people [who were there yesterday], and they can eat at the dinner table with everyone else."

Dinners had developed into wide-ranging discussions based on different guests staying at the hotel, Renaudie said.

"We have a lot of people who are coming to Dubai often, and they say they miss this kind of spirit here," she said.

"It's so anonymous here, everything goes up so fast. You need to come back and find something the same."

While La Maison d'Hôtes offers similar services to some of the larger hotels - including satellite television, laundry, minibus airport transfers, business meeting rooms and internet in most bedrooms - Renaudie said the market for their hotel was completely different to the market targeted by larger hotel chains.

"There's no competition at all, we couldn't think for a minute to compete with the big hotels," she said.

But Renaudie was keen to see a larger range of boutique hotels available in the United Arab Emirates.

"I hope there will be a lot of guest houses in Dubai, it needs to grow," she said. "You have a lot of people who can't afford these five-, six- and seven-star hotels. We need something different to offer them.

"You need to have a very different palette available. I hope there will be a lot of them [boutique hotels] in Dubai in the future. I am sure there is some space for everyone," she said.

Changing face of Dubai

A push to develop more boutique hotels had also been recognised at a government level within Dubai, according to the Department of Tourism and Commerce Marketing.

Media relations executive Mohammed Abdul Mannan said the current system of licensing and registrations did not have a category for boutique hotels - but that was planned to be changed by the end of this year.

"As of now we don't categorise boutique hotels. The present policy we have the ratings of one to five star for hotels, and apartments are [placed] in a standard or deluxe category," he said.

"The new licenses we are doing now will have new categories, including boutique hotels.

"That will make the hotel industry more properly regulated in that way, and tour operators will have better ways to market their rooms."

The industry would be consulted before any changes, Mannan said.

Dubai would also look at international examples of hotel licensing before developing their new license structure, he said.

"Everyone looks at Dubai now," he said. "If you do it in a way that does not have many issues or problems, it will become a model for others."

Increasing the amount of hotel options available in Dubai would also benefit the emirate's long term future as a tourism hub for the region.

"If you don't want to stay in chain hotels, if you would prefer to stay in boutique hotels, then we have to offer that," he said.

"The visitors will have plenty of choice in terms of selecting their hotel accommodation in Dubai.

"And the industry will work out whether there will be a market for boutique hotels - once it comes into effect it will develop the niche markets," Mannan concluded.

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