Accessibility links

Economics of Small Hotels - 2002-07-28

Among the American companies hurt most by the current economic recession and the September 11 attacks are hotel firms. For example, business travel hotel visits have declined as much as 15 per cent in some cities. But the weakening of the American dollar which reached parity with the Euro this month may actually help attract international visitors to the United States.

The hotels most likely to benefit from this increased business are the so-called "boutique" hotels, a concept created by the late developer Bill Kimpton who admired the smaller, upscale hotels he saw in Europe and Asia. Kimpton Group Executive Vice President Niki Leondakis talked about the fortunes of small hotels during a recent visit to Washington, D.C. "These hallways are wider and the ceilings are taller than a normal, boutique hotel would be. So our designer really had a creative challenge in trying to make it feel warm and intimate. These oversized red chandeliers, drapes and dramatic art really pulls the space in and makes it feel more intimate. There was a huge amount of art that we had to put on the walls. "

Niki Leondakis proudly shows off the newest of the Kimpton Group's 33 owned or operated hotels: the Monaco in Washington, DC. Ms. Leondakis, one of the highest-ranking women in the American hotel industry, says the effort to bring an intimate scale to the Washington Monaco and other Kimpton Group's lodgings was a reaction by company founder Bill Kimpton to the trend of building hotels on a big scale. "Back in the early 1980s, when it was very in vogue to build these grand, marble-and-glass brass hotels with huge atriums in the lobbies, Bill had a completely different vision based on a small, warm atmosphere. In every one of our hotels, the lobbies have a fireplace so that guest can sit in what we call the 'living room' of the hotel as they would in their own homes. They can read a book, relax and watch people. Every afternoon, in all of the hotel lobbies, our management often the general manager- is pouring wine for the guests."

Ms. Leondakis says the home-like atmosphere of boutique hotels even extends to customers' pets at her company's seven, upscale Monaco hotels, including the new Washington building. "Our hotels are pet friendly. All you need to do is let us know in advance if you're bringing a pet, and we'll provide special accommodations. If you don't have a pet and are lonely as a traveler, let us know that and we'll provide a goldfish for you to keep you company in your room. There will be a little card in front of your goldfish bowl that will tell you the name of your fish. Our housekeeping department will feed the fish every day and change the water and take care of it for you. All you need to do is enjoy your friend while you're here."

The pet-friendly philosophy of the Monaco hotels is a result of the Kimpton Groups policy of accommodating customers' special requests. "It's imperative today, in this competitive environment, that you listen as a service provider, to what your customers want. We do a lot of customer 'focus groups'. We talk to our customers. We actually have for our repeat customers, a data base of guest preferences that tell us what their needs are and how they use the hotel. If they're high-speed Internet people who require connections, we will find a way to accommodate that even if we can only do it in a limited number of guest rooms."

Ms. Leondakis adds that this personal connection between hotel staff and customers helps attract business during difficult economic times.

"A lot of times, consumers particularly in times like these, are looking for a level of comfort and safety. A boutique hotel environment feels a little safer, a little more comfortable."

The economic recession in the United States high technology business hit the San Francisco Bay area especially hard where the Kimpton company has most of its hotels. The past year's decline in international bookings added to the financial concerns. But Niki Leondakis says the strengthening of European and Asian currencies and the attraction of the boutique hotel concept may help her company weather the industry's difficult times.

"In these times, it's certainly something that's dropped off significantly for us. After September 11, the international tourism has definitely been hit pretty hard. We're happy to see a little bit of an up-tick in the last few months for that kind of travel. We predict that will continue to occur not as quickly as we'd like. But we see signs of recovery and signs of international travel coming back."

Good economic times or bad, Ms. Leondakis believes boutique hotels such as the Monaco will continue to attract repeat customers. "I think there's been some confusion out there in the marketplace about what the definition of 'boutique' really is. Some of our competitors who have boutique hotels that are cutting edge, design-oriented and trendy some equate that with 'boutique.' [It happens] to be a type or style of boutique hotel, but they don't define boutique. We are much more timeless in our hotel décor. They're warm, friendly and fun. They may be colorful and whimsical, but they're not trendy."

Niki Leondakis, executive vice president of the Kimpton Group, which runs 33 smaller hotels throughout the United States, including its seven Monaco boutique hotels.