Australia’s boutique hotel market is booming amid increased demand for unique and personalised stays.
According to a new report by CBRE Viewpoint, “the tables have turned” on the boutique sector which had previously struggled to match the high performance of the traditional ‘big box’ offering.
CBRE’s market analysis found that boutique properties have outperformed ‘big box’ international hotels on occupancy levels, Average Daily Rate (ADR) and Revenue Per Available Room (RevPar) since the onset of the pandemic in 2020.
The study, which compared the performance of a selection of boutique hotels against a selection of luxury international hotels, found that RevPar of the boutique hotels was 50% stronger than its ‘big box’ counterparts, while occupancy rates and ADR at the boutique hotels were 21% and 27% higher, respectively.
CBRE’s Australian Head of Hotels Research, Ally McDade, attributed the major swing in traveller preferences to behavioural changes prompted by the pandemic.
“Over two years on, many of the resulting trends such as remote working and virtual conferencing, ‘staycations’, and the continued growth of social media use for destination ‘collecting and bragging’, have become imbedded in our lifestyles, shifting guests’ preferences towards a highly personalised and hybrid approach to their hotel stay experience,” she said.
“This travel evolution is being increasingly met by the rise of the boutique hotel culture with its intimate and sophisticated offering and attention to design detail.”
CBRE’s Viewpoint determined that the growth in domestic, leisure-based tourism in recent years impacted big box international hotels that have relied heavily on corporate travellers and international visitors.
“The growth of this local traveller has resulted in demand for a curated hotel offering, which is being met by Australia’s new wave of boutique hotels that blend intimacy and sophistication, and authentically resonate with the feel of the city being visited,” McDade said.
But the resurgence in international travel and ongoing recovery of corporate/MICE travel is expected to boost numbers for these traditional hotel giants.
McDade said continued growth of the boutique sector will rely on hotels’ ability to deliver a personalised offering, while taking advantage of new and emerging travel trends such as ‘bleisure’, ‘workations’, and pet-friendly travel.
“Social engagement, forward-thinking tech and an increased focus on eco-friendliness are also expected to play a role in catering to an ever-increasing demand for hyper-personalised hotel stay, which boutique hotels are well placed to deliver due to their smaller size and independent operational structure,” she added.