Reuters is reporting that hotel brands in Europe are moving into a new sector: the "lifestyle" boutique hotel. This new model is in response to new demand from the Millennial market (expected to be the biggest group of hotel customers by 2020), and brands like Marriott, Hilton, Starwood and InterContinental Hotels Group are taking note.
With their massive resources, the big players are likely to steadily steal market share from independents in Europe's top five hotel markets (Italy, Germany, Spain, France, and Britain) between now and 2018, the article predicts.
InterContinental Hotels Group, which has a $1.8 billion turnover, says boutique hotels make up around 7 percent of some 1,200 hotels in its global pipeline, for example. IHG's $430 million acquisition of U.S. operator Kimpton Hotels last year made it the market leader in the boutique space when combined with Indigo and another boutique brand, EVEN. In December, IHG CEO Richard Solomons told Bloomberg that Kimpton would look to open properties in Europe.
Earlier this month, Marriott International announced plans to double the number of hotel rooms it has in Europe within five years, and is reportedly in talks to open Edition hotels in Paris, Barcelona and Madrid. Berlin and Ibiza are also possible destinations for the Edition brand. According to the New York Times, Marriott plans to open more than 100 of its Moxy lifestyle hotels around the world over the next decade in cities like Munuch, Frankfurt, Berlin, Copenhagen and London.
London is also slated to get one of the first Canopy by Hilton hotels, and the company told Reuters that it "sees space" for the brand in 20 cities in Germany alone. Paris, meanwhile, will get one of Hyatt's new Centric lifestyle hotels.
But how big can a lifestyle boutique brand get before it loses the intimate quirks that make it special? "In my mind if you get to ten hotels, it's no longer boutique," international law firm BLP's Nick Skea-Strachan, an advisor to some of the world's top hoteliers, told Reuters. "It's becoming a commoditized product."