Unique to Boutique

How Independent Hotel Owners Leverage Adaptability to Adopt Profitable Transformation, an Overview of the Boutique Hotel Investment Conference 

The Boutique Lifestyle Leadership Association (BLLA) held its 11th annual Boutique Hotel Investment Conference on June 7 and 8 in the heart of New York City at Florence Gould Hall. The conference brought together passionate participants to collaborate on shaping the future of the independent boutique hotel landscape. Distinguished leaders from around the world gathered to explore various topics that independent hospitality businesses face today as well as contemplate the growing interest from investors. From “F&B as a Recipe for Success” to discussing “The largest sales transaction since the Pandemic” with The Pomeranc Brothers, and “A Casual Conversation on Funding, Innovation & Startups,” the wide range of themes encapsulated the spirit of hospitality. Over two days, the event fostered an open and candid dialogue among prominent industry representatives, igniting the spark for transformative progress within the boutique sector.

Ariela Kiradjian, Partner & COO of BLLA and Co-Founder of StayBoutique, set the tone with her opening speech, emphasizing the Association’s commitment to advancing the boutique sector of the hospitality industry into the future. “[BLLA] liberates what it means to be a hotelier and advances the boutique sector of the hospitality industry into the future. We are here to gather and refuel our industry as we navigate the next phase of contemporary travel.”

Technology

Technology emerged as a significant topic at this year’s conference. In a “Casual Conversation on Funding, Innovation & Startups,” the founder of MEWS, Richard Valtr, and the Managing Director of Thayer Ventures, Chris Hemmeter, explored the distinctive edge that boutique operations possess. As travel markets continuously adapt to shifting cultural trends and international policies, modern travelers’ preferences have evolved, and the hospitality industry responds with innovative experiences. Hemmeter, shedding light on his investment strategies, emphasized the advantages that independent hotels have over large chains when integrating technology into their operations. “Small-scale hotel properties have the ability to test, develop, experiment, and learn,” he explained. Competing large chains often lack the same capacity for “agility, flexibility, and creativity” when implementing new technology and automation into hotel operating systems.

COVID-19 Pandemic and Adaptability

The COVID-19 pandemic highlighted the crucial importance of swift adaptability. It underscored the necessity for businesses to reevaluate and adjust their operational strategies. Reflecting on the lessons learned from the pandemic, investors are now recognizing the imperative of prioritizing flexibility when crafting their business models.

The pandemic’s severity caught suppliers off guard; however, Hemmeter elaborated on how the rebound of leisure travel, coupled with emerging trends in business travel, has unveiled a newfound willingness among suppliers and operators to explore and implement new technologies at every phase of the travel experience. Hemmeter noted a heightened customer comfort level with automation, signaling exciting opportunities ahead.

“The types of things that get me really excited, for example, are a summary of reports; we’re calling it ‘texting the GM.’ Valtr conveyed his enthusiasm for AI’s potential, envisioning an AI-driven system that would deliver daily analyst reports to property managers, providing immediate daily insights and benchmarks.

Hemmeter, building on this theme, painted an exciting vision of generative AI builders intersecting with visual media within a metaverse framework, fostering a vast array of applications across various industries. “What’s super exciting for us is that as these platforms begin to intersect, you can imagine generative AI builders using images and video operating in a metaverse space. You have an almost unlimited number of use cases. [For example,] if you were training someone on the front of the house, they could literally be behind a set of goggles and experience something you couldn’t even invent and learn to go through all those things. The potential applications across industries as these [programs] begin to intersect are very exciting.”

Panel Discussion: A Candid Talk on Technology

The panel conversation “A Candid Talk on Technology” echoed optimistic sentiments and highlighted emerging technology in hotel operations. Representatives from Pace Revenue, Roomza, Corporate Spending Innovations, Techtonic Hospitality, and DIRECTV discussed consumer engagement, the benefits and drawbacks of modern technology, as well as the influence on the contemporary phase of the “boutique lifestyle.”

Jason Pinto, COO of Pace Revenue, urged the audience to embrace technology’s potential as a catalyst for positive change. “I really advise everyone in the audience to think about technology as an enabler. It helps us get better at the job we’re doing, which is to delight guests. It will take away the busy work and drive better performance. Ultimately, I think it will link back to the objectives that you’re trying to achieve,” he explained.

Sustainability

The conference spotlighted the investment advantages of small-scale operational adaptability beyond the realm of technology. Independent brands’ flexibility in restructuring positions them for success in the face of global change. Climate change’s transformative impact on business profitability and survival loomed large.

Insights from the CitizenM sustainability report highlight the urgency of action to address climate-related risks and opportunities, crucial for maintaining stakeholders’ trust.

“Climate change is one of the biggest threats our world is facing. As our planet heats up, we expect to see severe weather events more frequently, which could result in damage and financial loss. The effects are potentially devastating to people’s lives and the economy. There is an urgency to take action to limit these events. Transparency regarding climate-related risks and opportunities will be critical to maintaining the trust of stakeholders and will enable investors to better understand the implications of climate change on businesses.” – from the CitizenM sustainability report

Amidst the struggle of larger corporations to adeptly navigate rapid shifts, independent hotels stand in a unique position to adopt sustainable practices. Such practices not only align with an organization’s ethical objectives but also yield substantial economic dividends.

In a conversation between Marissa Ballan, Vice President, Global Investment Management at citizenM Hotels, and Benedetta Cassinelli, CEO & Co-Founder of Considerate Group, titled “Investing with an Environmental Conscience,” the two discussed strategies they see at the forefront of creating a positive impact within the industry and the profitability of investing in sustainability for boutique hotels.

Cassinelli illuminated the multifaceted nature of stakeholders in the hospitality sector, emphasizing the divergent interests of brands, operators, lenders, and equity owners in terms of value creation and returns on investment. “With sustainability, what is really important is that you align the interests of all these different stakeholders and make them understand why ESG is important to each of them; what the values and benefits that investing in sustainability will bring them,” she said.

Ballan highlighted CitizenM’s distinctive advantage as both a brand and operator and real estate developer. “So we understand our portfolio can really implement change more quickly than many other players in the space,” she explained, underscoring the unique position independent brands have when making decisions. “Real estate in general is responsible for 30-40% of global emissions. As owners of real estate, [investing in sustainability] really is just the right thing to do.”

Moreover, these investments transcend ethical considerations, offering both short-term and long-term value creation while mitigating risks for hotel owners. “Overall, if you reduce your energy consumption, you’re going to reduce your energy cost long-term,” affirmed Ballan. As global real-estate regulations grow more stringent, both leaders highlighted investment in sustainable design as an essential measure for risk mitigation and safeguarding future investments.

In the short term, Cassinelli explained how implementing data monitoring systems, such as waste streams and resource consumption monitoring, can yield immediate value for a property. “Capital return on these often low-cost investments is realized within a matter of months or even weeks.”

“I see sustainability very much aligned with profitability. Ultimately, sustainability entails the implementation of sound business practices. When executed effectively, it enhances operational margins and boosts profitability,” emphasized Cassinelli.

Even legendary boutique hotel owners recognize the value of investing in sustainability. In “The Visionaries: A Casual Conversation” with Raul Leal, CEO of SH Hotels & Resorts, and Andrew Zobler, Founder & CEO of Sydell Group, Leal discussed 1 Hotel’s commitment to restructuring hotel operations toward achieving net-zero status, alongside implementing a drawdown and emissions plan.

The 2023 Hotel Investment Conference underscored the significance of boutique hotels in shaping the future of the hospitality industry. As the realm of travel continues to evolve, the boutique sector stands at the forefront, presenting unmatched opportunities for innovation, personalized services, and sustainable practices that resonate with the modern traveler. With steadfast commitment and an unwavering spirit, boutique hotels persist in shaping the future of the hospitality industry, establishing novel standards of excellence, and igniting entrepreneurial inspiration worldwide.