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Fashion boutique
The first, the 160-room Armani Hotel Dubai, is set to open in the last quarter of 2008 within the world's tallest building, the Burj Dubai development.
HVS's Choufany remarks: "Over the last decade many hotel chains have launched their boutique brand and, with the exception of Starwood Hotels and Resorts, we can say that they have not yet been very successful. Indeed, the Cerutti brand from Rezidor SAS was quickly abandoned and replaced by Missoni. Bvlgari Hotels from Marriott International only count two properties and Marriott recently announced a new partnership with Ian Schrager to create the Edition brand".
Although growing demand is making the boutique market an attractive prospect for developers, hotel groups and now fashion designers, a degree of caution is clearly advisable.
Even Hotel Missoni's McKinnon admits there have been some designer disasters in the past. "Certainly historically, designer fashion hotels have failed in this area, where they thought it was all about the hardware and the superficial side of things - style over substance," he says. But McKinnon is assuredly optimistic about the first Hotel Missoni property.
"The partnership between Rezidor and Missoni is very relationship-based," he explains. "I think that's where the others have struggled. I think that's where Armani struggled, that's where Bvlgari have struggled".
The first Hotel Missoni is due to open early next year, and the group is already considering other locations in the region, reveals McKinnon.
But this optimism does not detract from the fact that handling boutique hotels, especially a chain of them, is not an easy task.
HVS's Choufany notes that although established, boutique hotels tend to have a higher percentage of repeat business compared to the industry in general, which may reflect a smaller degree of volatility when going through difficult economic times, they can be expensive and inefficient to operate, potentially leaving a relatively smaller bottom line for investors.
"The definition of the term ‘boutique hotel' is rather subjective...yet the majority of boutique hotel operators, designers and owners agree on some common characteristics such as size, design, target market and service.
Most boutique hotel specialists emphasise that boutique properties do not exceed 150 rooms, generally attract guests who are in their early 20s to mid 50s with mid-to-upper-range incomes and provide personalised service.
Hala Matar Choufany, associate director Middle East, HVS Global Hospitality Services Dubai
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