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Mature markets a must for boutique hotels
  Date:6/10/2014  Tags: boutique hotel 

Boutique hotels are the best fit for markets with an established footprint of more traditional, branded supply, according to executives of several boutique portfolios.

DUBAI, United Arab EmiratesBoutique hotels are more popular than ever, but woe to the investor who establishes such a beachhead on uncharted terrain. For these stylized properties, market maturity matters, according to boutique hotel executives.


You do need a certain level of maturity in the market, said Adrian Jossa, co-founder and owner of Muse Hotels de Luxe, which counts five properties in its portfolio. That maturity extends to an established base of hotel inventory and a thriving cultural footprint from which boutique hotels can draw inspiration.


Whats key in lifestyle- and boutique-type hotels is taking the DNA of what you have in the jurisdiction and the location and transcribing that DNA into something that is locally grown, Jossa said during a panel titled The next wave at last months Arabian Hotel Investment Conference. 


For Meli Hotels International, blazing the trail with the companys more traditional chains is a prerequisite before adding any of its ME by Meli hotels, said Martin Ostermann, Melis director of development in the Middle East region.


Introducing the group with our core brand with Meli was important to set up infrastructure, he said. 


Dubai is a case in point of a market marching toward maturation, the executives agreed.


For many years, Dubai seemed totally based around large, extravagant big-brand hotels, said Gordon Campbell Gray, founder and chairman of CampbellGray Hotels, which operates the Carlisle Bay in Antigua and the Le Gray in Beirut. I thought it was no place for a niche market but I feel as though Dubai has matured; its more sophisticated; the art scenes improved. 


I really now feel Dubai is ready for a smaller boutique hotel.


Simon Coombs, president and CEO of Shaza Hotels, offered a different take, arguing a great niche hotel can complement any location, regardless of existing hotel footprint.


I would like to think of us in all markets and not just saturated markets as a first choice, he said.


Giving him some confidence, Coombs said, is the brands backing of Kempinski, which manages a portfolio of 73 5-star hotels in 31 countries. 


Mostly Middle East 

Middle Eastern destinations dominated the executives wish lists for expansion.


Were very keen on the Middle East, Campbell Gray said. He and his team are always keen on Oman and Jordan. Other opportunities include projects as far afield as the Galpagos Islands, Switzerland and Palm Beach, Florida.


With the current focus of Dubai being the tourism focus of the Middle East, it was important for us to enter that market successfully and then branch out, said Ostermann. 


Meli is discussing projects in Qatar, Jordan, Oman and Saudi Arabia, he added. 


JA Resorts & Hotels, whose seven properties include five in or near Dubai, has another three planned in the emirate, said COO David Thomson. The companys development team is also looking to the Indian Ocean, he added. 


Muse is primarily a resort play, although now were working on a very urban product, Jossa said. 


The United Arab Emirates and Qatar top his wish list, he added. 


Coombs said expansion at Shaza is less predicated on locale and more so focused on traveler trends. 


We will develop wherever our market wishes to travel, he said. That includes a new project in Oman, which is set to open later this year. 


Key takeaways

The Middle East focus reflected in the executives key panel takeaways.


Jossa made a pitch to investors whove worked exclusively with more traditional brands. 


Partnership in this region is essential in the (Middle East, North Africa) region where you have a lot of very large real estate owners or developers that have a big share of the market, he said. Were here. We want to participate in creating the DNA of the different locations. Give us the opportunity to partner with yourself. Were building the essence of cities.


Campbell Gray reiterated that message.


If youre an investor, be confident and go for the individual. Be confident enough to throw away that safety of that big brand and go with your gut instinct, he said. 


Coombs stressed the importance of a strong working relationship between owners and brand creators. 


You have to have a very clear vision of who you are building your hotels for, he said. 

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