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July 16, 2019 Business News No Comments Email Email

Call it the Instagram effect, or blame Airbnb, but boutique hotels are capturing the hearts – and travel habits – of a new generation of Australian travellers, with many now choosing unique and quirky hotels over homogenous international chains.

Anthony Goldman, joint Managing Director of Australia’s premier luxury travel advisors, The Goldman Group, says stand-alone, niche properties and spin-off boutique hotels created by major global brands are increasingly sought after, particularly among millennial travellers, who see them as synonymous with the personalised, unique experiential travel they see on social media.

The term “boutique hotel” was originally used in the 1980s, to describe Morgans Hotel in New York, the world’s first boutique hotel. Today, the boutique hotel concept has become more mainstream, and Goldman believes social media, influencers and the AirBnB effect are behind the rising popularity of smaller, specialised accommodation options.

“Boutique hotels are riding the wave of transformation that’s impacted the broader travel industry in recent years. Our clients are increasingly looking for smaller, local accommodation providers, personalised tours and connected, immersive experiences. In this internet age, established international brands are less appealing to many travellers, who increasingly seek inspiration from fellow travellers’ shared experiences, images and reviews,” says Goldman.

“The rising popularity of boutique hotels underlines the fact that our industry is dynamic and open to change, with the shift towards smaller properties driven by consumer preferences, and the major hotel players adapting to stay relevant,” he added.

“When Airbnb entered the market, it prompted travellers to seek unique, authentic accommodation, and that is translating into the types of hotels our clients are requesting. They’re looking for properties with personality, including interesting interior design features, and are increasingly open to staying in lively urban neighbourhoods rather than traditional CBD locations,” Goldman added.

The Australian Luxury Traveller 2019 Report [1] conducted by the Goldman Group revealed that more than one third of Australian travellers enjoy posting about their holidays online; and get holiday inspiration from their social media feeds. Notably, it’s Instagram fuelling the travel appetites of young Australians, and with the hashtag #holiday obtaining 124 million mentions on Instagram alone – it’s easy to understand why.

“We have a lot of clients message us directly on Instagram and ask to book hotels featured in our posts or ask about destinations visited by our travel advisors. We also have people share screenshots of properties and destinations that they stumbled across on Instagram and want to discover for themselves. Instagram is fuelling travel decisions, and as a travel advisor you cannot ignore the magnitude of influence this social media platform holds,” says Goldman.

According to the Goldman Group, successful boutique hotels are targeting niche travel demographics, such as wellness travellers, heritage aficionados, art fans, or lovers of quirky interior design in a bid to attract market share away from big brand hotel chains.

“By targeting specific groups and tailoring their experience according to those interests, boutique hotels can offer the personalised, bespoke service travellers are looking for. The challenge now is for larger brands to emulate the intimacy and attention to detail offered by boutique hotels, to make each visitor feel special versus one of the crowds,” said Goldman.

“In the boutique hotel sector, we’ve seen a return to genuine hospitality, where accommodation providers connect their guests with the local community and help them enjoy a personalised stay tailored to their unique interests,” added Goldman.

In order to compete with the burgeoning boutique hotel trend, a recent CBRE report found the boutique accommodation sector currently accounts for 12 per cent of Australia’s CBD hotel development pipeline[2]  with many major hotel groups having established their own boutique hotel brands or purchased existing brands to cement their standing in this increasingly lucrative market segment.

For instance, Marriott launched its Aloft brand in Australia in 2017; and will launch its Moxy brand in Melbourne’s trendy South Yarra in 2021, targeting a younger audience. To boost its presence in the boutique hotel sector, Accor Hotels recently acquired local lifestyle hotel brand Tribe; and the InterContinental chain is set to open its first ‘Indigo’ hotel next year in Brisbane. Other boutique brands created by major players include Marriott International’s ‘W’ and Sofitel’s ‘Sofitel So’.

In Sydney, boutique properties Paramount House and Little Albion Guest House are prime examples of existing buildings which have been re-imagined as boutique hotels in neighbourhoods bustling with local eateries and entertainment.

Boutique brands which have already earned loyal local followings include United Places in South Yarra; Art Series Hotels, QT, Old Clare, Spicers Retreats, Ovolo and 8Hotels.

“Looking ahead, we anticipate significant expansion in this sector in the coming decade, both through acquisition and further openings from international boutique brands looking to capitalise on this growing trend in Australia,” predicted

Goldman.

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