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How to Start a Boutique Hotel

Author: Kristen Lund Date: July 21, 2014

Small, intimate lodgings are growing in popularity. Here’s how to take part in the trend.

In 2005, during the height of the real estate boom, Chris Eggleton started planning for a boutique hotel in Park City, Utah. Three years later, he opened his first property, the Newpark Resort & Hotel. He forged ahead through the Great Recession and has since earned accolades such as TripAdvisor’s Certificate of Excellence, which recognizes the top 10 percent of businesses reviewed on the site.

According to business research company IBISWorld, the boutique hotel continues to grow. The Australian firm forecasts an annual growth rate of 6.4 percent through 2019, compared to an annual GDP growth rate of 2.7 percent. So how can an aspiring hotel owner break into the market? Here, Eggleton, general manager/owner, offers his tried-and-true tips for launching a boutique hotel:

Focus on the fundamentals. 

As tempting as it may be to pour your energy into creating a wacky theme or gimmick (Bournemouth, England, boasts its own chocolate-themed hotel), Eggleton recommends bypassing fads and focusing on the fundamentals of why people vacation, which he says is to escape normal life for a few days and be doted on. Above all, a boutique hotel must offer a relaxing experience with clean, comfortable rooms and consistently outstanding service.

Choose the perfect location. 

When guests book a room in a boutique hotel, they are seeking a unique experience. Choose a city or town with great local flavor and a rich variety of activities. Your local convention and visitors’ bureau, Eggleton says, can be a great asset in helping you promote your hotel to prospective travelers.

Know your market. 

Whether you hope to open a hotel in your hometown or halfway across the country, spend some time there as a traveler, Eggleton suggests. Stay in hotels typical of your competitors, speak with the staff and the other guests, and ask questions such as, “What’s missing here?” The personal experience will help you compete against not only other boutique hotels but big-brand hotel chains known for their aggressive marketing.

Hire the right staff. 

“It takes a different person to thrive in the boutique hospitality segment over the corporate or brand segment,” Eggleton says. “I have found the most success by not being overly impressed by the résumés that have depth in large, corporate hospitality chains and just finding the right people.” The attributes he looks for: authenticity (boutique hotels encourage their employees to interact naturally with guests rather than follow standard operating procedures), a genuine desire to serve and discernment.

Stay nimble. 

One perk of owning a boutique hotel versus a large chain: It’s easier to try new ideas, continue if they succeed and rethink your approach if they fail. For example, Eggleton does not require uniforms for most employees, other than a name tag. Rather, he provides a style guide and gives employees two seasonal cash stipends that encourage employees to purchase clothes that they are most comfortable in. “Being comfortable is part of making the guests in our hotel feel comfortable and welcomed,” he says.

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