Boutique concerns, part 1: Autograph and Edition

Boutique concerns, part 1: Autograph and Edition

Last week I attended and contributed on a panel at the Lifestyle/Boutique Hotel Development conference, where for the better part of two days, some of the most creative minds in the business brainstormed about what “boutique” really means. With Marriott being the buzz in the boutique space right now, it is evident that schools of thought have meshed and boutique is harder to define.

At the launch of both Edition and Autograph Collection, I was keen on the step forward for Marriott. In 2006 I got into a heated discussion over cocktails with a former Marriott branding executive and fellow Spartan. He argued that branding a hotel Marriott was a sure bet; I lobbied for the independent nature of a hotel. Fast-forward to last week, and the Hotel Icon Houston was announced as the 26th hotel to join the Autograph Collection.

At the conference, Richard Kessler spoke positively of the brand. The Kessler Collection of hotels and resorts, which helped launch Autograph in 2010, is up 8.2% in RevPAR this year versus the 5.1% of the respective competitive sets. Kessler attributed much of the growth to the Marriott reservation system. However, the Autograph “brand” leans more towards being just that — a brand — rather than a reservation affiliation.  The cumulative fees, at approximately 8.5%, are closer to the double-digit fees of Waldorf=Astoria Collection and Luxury Collection than to the 1.5% of Preferred Hotel Group. Yet this isn’t my biggest concern, considering I feel in most cases there is a good return on investment at that fee structure.

In reviewing the UFOC and studying Autograph, it became evident that Marriott’s Renaissance brand was the foundation from which Autograph was built. The UFOCs practically mirror each other with a slightly greater reservation fee and miscellaneous Marriott fees applied to Renaissance. In addition to the structural similarities, it seemed Marriott was already in the game of soft-branding Renaissance (see Blackstone Chicago and Eden Rock Miami). Is Autograph really the innovation in soft-branding that captured everyone’s attention?

I believe Autograph is a plus for both Marriott and new and existing independent owners looking to reposition without losing personal identity. It’s easy to argue Marriott nailed soft-branding far better than its predecessors at Starwood (Luxury Collection), Hilton (Waldorf=Astoria, DoubleTree Collection) and now its followers at IHG (Intercontinental Alliance). Even Hyatt, who says it is not in the soft-branding business, has flirted with the idea (Hyatt 48 Lex, Hotel Victor).  

My concern is for existing owners of core-branded hotels. Are they fully protected in their AOPs from soft-brands that didn’t exist during contract negotiations? Are the new soft-branded hotels pushing them down the list of hotels on the brand website? Are they getting nailed by PIPs and locked into long-term agreements while the soft-brand owners have more flexibility? 

While Autograph is clearly the plow horse for Marriott’s growth in the boutique space, Edition has certainly endured its roadblocks. Assuming we all know the drama surrounding the Waikiki Edition, I will keep my thoughts short and sweet.

It is good to see Marriott taking it upon itself to relaunch the brand, committing to projects in London and Miami and the rumored Clock Tower acquisition in Manhattan for an Edition. But I feel Ian Schrager should have been committed to a certain number of Edition developments, even one, before he could launch Public. Receiving a multimillion-dollar “contracting fee” for the Waikiki Edition and subsequently developing Public seems awfully suspect.  

With Public online in Chicago, two in the works in Manhattan and another in London, it appears Public will hit 10 hotels in major gateways faster than Edition. Schrager will point to the fact that Public (3.5 stars) and his ultra-luxury product (a la Gramercy Park Hotel) will not compete with Edition (4.5 to 5 stars, depending who you ask). Maybe they won’t compete in rooms product, but you better believe they will compete in the F&B space, which is the backbone of the boutique hotel. Disagree? Then I challenge you to point to all of the 3.5-star hotels that have a restaurant run by a chef who has garnered three Michelin stars, as does Public Chicago with Jean-Georges’ revival of the Pump Room.

Don’t get me wrong; I will corner with Marriott and Schrager more often than not. Under the right circumstances, they have aced the model. Yet as the definition and positioning of a boutique hotel becomes more and more hazy, the “right circumstances” need to be heavily evaluated.

In part 2, I will look at the plethora of new boutique brands and point to where I see a promising future for “boutique.” (Teaser: It’s not in the Top 5 markets.)