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Boutique hotels started the second quarter of 2020 with significant revenue-per-available-room (RevPAR) declines like the overall hotel industry, according to The Highland Group’s “Boutique Hotel Report 2021.” However, many boutiques began reporting strong RevPAR improvements in the latter part of the year as they began to decelerate average rate discounts.

“This yield management strategy, most widely seen in the upper upscale/luxury class of independent boutique and soft brand collections, positions these boutique hotels in a stronger position to recapture rate in the recovery years,” says Kim Bardoul, partner at The Highland Group.

Upper-upscale and luxury independent boutique and soft-brand collections experienced less of a RevPAR loss in 2020,  as  rate  discounting  decelerated  in  the  last  half  of  the  year, according to the report.  Supply  losses  were notably  more  for  both  class  groupings  of  independent  boutique  hotels,  which  are  largely individually owned and located in densely populated urban areas that were significantly affected by the COVID‐19 pandemic. 

No boutique hotel segment reported more than a slight decline in RevPAR index in 2020 compared to 2019. Upper-upscale and luxury independent boutique and soft-brand collections of the same class, as well as upper-midscale and upscale soft-brand collections reported 10 to 18 percent RevPAR index gains in 2020 compared to their 2017 to 2019 average.

Photo: StockSnap from Pixabay

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