Boutique hotels are widely perceived as a great investment in the last couple of years. Of course, there was a time when this investment wasn’t popular as it is now, but we can see that it gained more momentum recently. At one point, it became quite challenging to make the deals, and some sorts of this investment were considered much more favorable than others.
If we take a look at some statistics, we can see that the number of boutique hotels has risen significantly in the last couple of years. Some of them say that this increase is around 250% in the last five years, which is nothing short of exceptional. So, we are looking at the $12.4 billion market size momentarily.
Of course, nobody should be surprised by the increased popularity of these since they are, let’s say, their niche, which is always a plus. Naturally, the US is not the only market you should take a look at. If you want to look outside it, then be sure to take a look at boutique hotels Mexico.
Now, we want to talk about whether it is a good move to invest in these in 2023.
What is Boutique Hotel?
When we are talking about linguistics, the simplest definition of the boutique is that this is a small and sophisticated business or establishment. When we’re talking about hotels, we are talking about a small enterprise, which is highly stylized and mostly located in some of the urban districts of the city.
However, it needs to be said that there’s no strict definition of these hotels. But at the same time, most people out there know what this means when they see one. Therefore, you can see that it is pretty complex to draft a clear definition, but everyone is already aware of what it means, and that’s why there is a market for it.
Another thing that makes these different from basic hotels is that they are not only smaller, but they also have some Instagram-worthy spots, and a lot of different décors, which is not the thing you will find in a wide array of hotels out there. That’s why they have become a niche of their own over the years.
The Market Landscape
We’ve already said that this market is getting big in the last couple of years. However, if you take a look at the approximates, you will see that it is projected to grow much more in the future. We can say that about the whole industry, not just about the sub-category of boutique hotels.
Even though the current inflation is making the market a little bit unstable, it needs to be said that it has a bright future. If you take a look at all the major cities in the world, you will see that the numbers of boutique hotels are on the rise, and being a part of this market certainly makes for a great future.
Proper Ways of Establishing the Business
Now, let’s take a look at the ways of establishing a boutique hotel.
1. Calculating the Costs
The first thing you should have in mind is that coming up with a budget is an absolute must when we are talking about establishing a boutique hotel. When you have everything on paper, then you can make proper plans and find all the materials and equipment that will be needed for this project.
The commonest misconception is that these are smaller than average hotels and that they will not require such an investment. However, we are talking about a specific niche, which means you would need to invest a lot of money until you find the style that fits the overall idea. Naturally, the highest percentage of the price is purchasing real estate.
2. Location is Essential
As we’ve said, one of the major elements in determining the costs is finding the right location. As we all know, finding the right location is not easy, especially in big cities. Therefore, you should be prepared to pay more when an option like this appears on the market, and you need to be pretty fast about it since proper locations are not available for very long.
On the other hand, one of the biggest mistakes people make when choosing locations is when they want to find only the ones that a lot of people are going through. Of course, this is not something that should be a sole factor to consider. In fact, you should be more focused on the infrastructure near the location and closeness to the airport.
During this process, you should take a look at a couple of locations out there, and narrow down your list by taking a look at the ones you feel are the most suitable for you. By having more options in front of you, and using a proper filter to narrow them down, you will have a much easier way to find the best solution.
3. Finding the Right Concept
The last step we want to talk about is finding the right concept. Naturally, there are countless of those to choose from, and you would need to think hard about them before you can decide on the proper one. See whether you want to go retro, neon, cyberpunk, or any other concept available out there.
Of course, there is no definite, one-size-fits-all, solution. Instead, you would need to spark your inner creativity and add a twist that will make your place one of a kind. Therefore, don’t be hesitant to listen to your inner creativity, and if you don’t believe you’re up to the task, then you should hire a professional to help you.
The Bottom Line
Investing in boutique hotels in 2023 is a great move. However, we would say that the benefits of this decision can be expected in the coming years, not instantly. Therefore, if you have the needed capital and you want to invest in this market, then you can rest assured that this is a positive move you can make in the future.