For many in the hotel industry, it's a minimum-wage (tip-based job). For a boutique hotel, you need to hire experienced hotel workers with great customer service skills. As Mackie says about Cape Resorts, "Customers always say, 'My God, you have so much staff, how can you afford it?' And that's exactly what we want. We just say that is really what the brand is about. The whole experience is delivered by the staff and its emphasis on training, so you need to find the best." Smaller staffs should be paid more based on the level of service you're asking them to provide.
The limited overhead as a smaller hotel both help boutiques post larger profit margins than many bigger brands, according to Hotel Investment Advisors, another industry consultant. Part of the profit margin is the cost you can charge your customers, which can sometimes be double what the larger local brands are offering for similar rooms but without the personal touch. Initially you won't have the brand equity that the larger brands have built up over time, so it may take you longer to reach the point of breaking a profit.
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How to Start a Boutique Hotel: How to Market Your Boutique Hotel
An oft-overlooked aspect of opening a smaller hotel is your product distribution, or how you market yourself. Because you don't have that existing brand recognition of the larger chains, you need to get the word out there about your resort. By defining your resort as a brand of one and communicating your standards in the same way that larger resorts do, your customers will gain a level of comfort and familiarity with your resort. Telling a unique story behind the location or history of the hotel (for The Chelsea, it's nod to Atlantic City's past) can put you over the top in terms of occupancy and success.
The good thing for many start-ups is that the Internet has made this marketing aspect considerably easier. You can now put your boutique hotel on a level playing field with some of the larger branded properties thanks to the benefits of travel search engines like Expedia, Bing, Hotels.com and more as a great way to raise your brand recognition.
No matter how you break it down, it comes down to your return on investment as a boutique hotel. But with no franchise fees and the opportunity to operate with your own customer service ideas and brand characteristics, boutiques offer the chance to succeed as an independent hotel.
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