With boutique properties sparking huge interest in the Middle East, Lucy Taylor considers the challenges of maintaining unique appeal in such a dynamic market.
Boutique hotels are by no means easy to define, with a multitude of different ideas floating around about what they should comprise.
Traditional boutique criteria include strictures on the maximum number of rooms allowed, design and architecture characteristics and service - but everyone has their own opinions on the subject.
Whether or not there are set parameters for this state of ‘boutique', one thing is clear: for such properties in the Middle East, the market is set to be a great success.
It is the tone of a boutique property that defines its clientele, and key factors in setting that tone are location and architecture, as Stephen di Renza, proprietor of Riad Numero 9 in Morocco, explains.
"My very first impression of [Fez in Morocco] was one of timelessness and great calm juxtaposed with the frantic activity of the souk. Instinctively I believed people like me, i.e. busy Euro-urban dwellers, would find the lure of an intact, medieval site that was a short flight away extremely attractive," says di Renza.
"Our target clientele is definitely niche: someone urban, sophisticated, looking for an unspoilt location that is not overdeveloped and who is interested in deepening their knowledge of other cultures."
The Riad Numero 9 property itself boasts an extremely impressive Fassi bourgeois structure, which has been carefully restored to its original splendor.
"We also offer all the amenities that sophisticated travellers expect," di Renza adds. "Our goal is to create an intimate, authentic cultural experience without sacrificing comfort.
The cultural aspect seems to be a common draw amongst boutique properties, as demonstrated by the stunning Burj Al Salam hotel in Yemen.
The property is owned by UAE-based private destination company Net Group, and is the result of a 10-year project carried out by the company's executive chairman, Ali Abu Monassar.
The location is a focal point of the property, as Ali Abu Monassar's son, Net Group Abu Dhabi and Al Ain general manager Anwar A Z Abu Monassar, explains.
"We designed and created the concept of Burj Al Salam in Yemen as we see the country as the mother-place of the Arab culture," he says.
Monassar believes that it is essential for boutique hotels to offer an insight into local culture and custom.
"Yemen has an amazing range of attractions to offer. All Arabs consider Yemen as the birthplace of our civilisation and the same society reflects our origins. We want the property to reflect that too," Monassar says.
Habib Khan, general manager of Orient Guest House in the Bastakiyah area of Dubai, is similarly in favour of maintaining and reflecting local culture and tradition, and believes that is what makes a boutique hotel special.
"Staying here is a unique experience; all the rooms are different because they were converted from an old Arabic house. We still have the courtyard, the flat roof terrace - there's very much that feeling of tradition," he explains.
At the other end of the boutique scale, and reliant on sporting tradition rather than any kind of cultural heritage, is The Montgomerie, Dubai, owned by Emaar Hospitality Group.
The property is characterised by its 265-acre championship golf course designed by top golfer Colin Montgomerie, but also features 21 contemporary-design guest rooms.
But again The Montgomerie has a distinctly niche target market: as Emaar Hospitality Group (EHG) chief executive Marc Dardenne explains, it was developed specifically to meet the growing demand for world-class golfing in Dubai.
Another Dubai property verging on the boutique is La Maison d'Hôtes, an elegant guest house in Dubai, which opened early last year and is now run by co-founders and fellow managing directors Claude Berquier and Julie Renaudie.
The property comprises 22 guest rooms, a conference room, two swimming pools, a gym and an authentic French restaurant. Renaudie explains: "We are in fact a guest house, not a boutique hotel as such, but people are not familiar with the idea of guest houses here in Dubai, so we often get put into the boutique category.
"Our focus is very much on atmosphere. The spirit here is really about personalised service and creating a relaxed atmosphere".
Championing a slightly different strain of boutique hotel, the first Hotel Missoni property, a collaboration between hotel giant Rezidor and Italian designer fashion-house Missoni, is set to open in Kuwait in 2009.
Hotel Missoni executive vice president brands and project leader Gordon McKinnon says the choice of situation was less about location and more about the Missoni brand. "Our general growth strategy within a defined group of locations is fairly opportunistic, so certainly to begin with we didn't think it was necessary to apply a city heirarchy to our development, so for example we didn't consider it necessary to do Dubai before Kuwait," he explains.
The tone is about the brand. It will focus on all the factors that typify Missoni's Italian style: fashion, food, family, fine art and so on."
Boutique properties are, by their very nature, unique. As a result, many hoteliers in this industry say they do not feel particularly threatened, either by the slow but sure increase in the number of boutique properties in the region or the new properties spawned by big-name chains.
Riad Numero 9's di Renza says: "I suppose our competitors are the few local five-star hotels, in so far as their comfort criteria are similar, although of course there's no comparing the intimacy that a small structure like ours can offer. I'd also add that there are more and more Riad [traditional-style Moroccan] hotels in Fez, which are targeting the same niche but the reality is there are still not enough to satisfy demand".
EHG's Marc Dardenne points out that The Montgomerie, Dubai has an individuality unlike any other hospitality project. "It is a component of a championship golf course. [It] does not compete with the traditional hotel chains; it complements the sector by offering a distinguished portfolio of guest facilities, driven particularly by the client's passion for golf and personalised service."
According to Net Group's Monassar, the true competition is closer to home: "We have a philosophy at the Burj Al Salam: we respect others and check the market but, to lead and to improve, your first competitor is always yourself".
But however healthy competition may be the key issue is still to fill rooms, as La Maison d'Hôtes' Renaudie points out. "You always have direct competition, no matter how different you are to other properties. You can't close your eyes to that in the hotel business; we still need to fill rooms.
"However today we are lucky because there's such a demand for rooms here in Dubai," she adds.
Ready to expand
There is no doubt that the region's boutique properties are steadily garnering more interest from visitors to the Middle East. As Riad Numero 9's di Renza explains, today's traveller is looking for a "personal" experience. "Smaller, specialised hotels are better equipped to answer their needs," adds di Renza.
But there is still some way to go for the boutique sector, as Net Group's Monassar explains: "The MENA region needs to develop the concept of boutique hotels further. Usually, as shown in other parts of the world which enjoyed a development in the tourism sector earlier than our region, the concept of boutique hotels came later and basically evolved from the need to offer a different experience".
Global consulting and services organisation HVS Global Hospitality Services, which offers services such as asset management, hotel management, and convention, sports and entertainment facilities consulting to the hospitality industry, has recently set up an office in the region.
HVS associate director Middle East Hala Matar Choufany is realistic about the current strength of the region's boutiques.
"The boutique hotel market is still underdeveloped in the Middle East," she says. "Right now there is a limited number of boutique hotels here, although several developments are in the pipeline in most of the key Middle Eastern cities. Most of these will be new developments, except in older cities such as Damascus and Beirut.
"It must be noted that in emerging countries the developers tend to first develop commercial five-star properties, luxury properties, mid-scale and limited service hotels and then finally boutique hotels to reflect the increase in land prices," continues Choufany. "In addition, once larger chains are well represented in a market, there is a tendency to find alternatives to differentiate the product.
"With the growing economies of most countries in the region and the number of hotels under development, there is a growing need for differentiation. As a result, boutique hotels could eventually achieve better performance than mainstream hotels."
Traditionally, boutique hotels are unique properties operated by individuals or companies with a small collection. However the success of numerous boutique projects has prompted global hotel companies to appropriate the term and establish their own ‘boutique brands', so as to cash in on this attractive new segment of travellers.
One example of this branded boutique phenomenon is Armani Hotels and Resorts, established in 2005 by Giorgio Armani and Emaar Properties, which will develop, own and operate an exclusive collection of boutique hotels across the globe.
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.
Broad market appeal
Whatever the challenges, it's easy to see why a hotel group would be interested in getting a slice of the boutique pie: the market is looking increasingly healthy in the Middle East.
Riad Numero 9's di Renza comments: "Interestingly, we're getting more and more Americans and more families, whereas our clientele used to be 90% business".
The specialist focus that often goes hand-in-hand with boutique hotels, be it rooted in culture, sport or fashion, is also an extremely marketable factor, as EHG's Marc Dardenne says.
"The key trend over the past few years has been the growth in popularity of golf in the region, resulting from concerted efforts by the government and other associated organisations working to promote golf in Dubai. There is also a growing demand for boutique hotels and meeting space, which The Montgomerie, Dubai offers," he says.
Chain vs boutique?
So with everyone clamouring for genuine boutique experiences, is the industry moving away from the big-brand identikit hotels?
Maybe not. A key selling point for global hotel chain Best Western, which recently announced plans for expansion into the Middle East in conjunction with Zainal Mohebi Group (ZHG), is that it is "the world's largest hotel chain". But if the the unique experience is becoming so popular, how can the cookie-cutter approach to accommodation be a selling point?
ZMG chief executive Mohammed Mohebi explains: "I don't think it's so much about the unique [experience]; I mean when you go to a five-star hotel it's there you look for a unique experience. When you go to a three- or four-star hotel you're looking for good clean accommodation without all the thrills and frills.
You want to know you have proper hygiene, you're close to the area where you're going to do business, its safe, it's secure, it's more going back to the basics of hoteliers, and les to do with the flash and pizzazz that the five-stars and the six-stars and now the seven-stars concentrate on. So that's not our target".
However La Maison d'Hôtes' Renaudie feels it is more a question of spirit than social standing: "It's difficult to analyse the type of guest you can fit with this kind of product. Certainly big chains have an attractive aspect when people need something quickly. But I'm not sure that this is really a question of the social levels of people, it's more a question of personality.
"You have some people who don't like surprises. They have their habits and they need to be around things they recognise. Maybe that's their way of feeling at home, feeling comfortable. Then you have other people who prefer to have something different, something personal. It's a question of spirit.
Orient's Khan agrees. "Young, rich fast-car-driving guys - you would not be able to encourage them to come to a property like this," he shrugs. "But there will always be those who have travelled a lot, who have seen it all and aren't looking for the glamour of the reception desk or the height of a building.
"We are a property for those interested in an intellectual, cultural experience; those who want to be recognised, not just thought of as a room number.
So perhaps choosing boutique over brand is a state of mind, rather than a state of finances; either way, the chains do not worry boutique hoteliers.
Indeed, Net Group's Monassar welcomes their input. "Big name hotel chains are not a challenge; on the contrary, most of the time the big chains are also the oldest players of the hotel industry, therefore we value their experience," he says.
"But Burj Al Salam and all our future properties are created in places where the nature is still virgin, and those big names are not present because the same location would not have allowed their kind of properties."
So what does the future hold for this specialist market?
Riad Numero 9's di Renza believes that the chain boutique properties will also grow in appeal, forcing boutique hotels to evolve and focus even more fiercely on their particular niche.
"For me, the emergence of the boutique hotel corresponds to a consumer need for travellers to experience their destination in a more personal way. These clients are familiar with the larger hotel groups and use and appreciate them for business travel but are looking for something more intimate for a cultural break.
"Large groups understand this and are responding with resorts and spas that reflect and respect their cultural surroundings from a design point of view as well as focusing on more personalised services. As a result, boutique hotels will need to respond with more and more specialisation.
La Maison d'Hôtes' Renaudie agrees that boutique appeal boils down to being able to offer something different.
"We are aware that we have to constantly maintain and renew the services we offer, and we try to organise events for our guests and exhibitions. Just things that are a bit different from anywhere else," she explains.
Stick to what you know
Everything points to the fact that boutique hotels could become wildly successful in this region.
But to remain sucessful - and indeed profitable - they must remain dedicated to their niche speciality, and remember that they are appealing to a personality type, not a faceless wallet.
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