PARTIStrategic Operations Management CASE STUDY Boutique Hotels there is no one
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PARTIStrategic Operations Management CASE STUDY Boutique Hotels there is no one definition of a boutique however, most people think of a boutique and guests are emphasized; for example, a warm, caring attitude on the part of management and staff is encout. urrently, hotel; hotel as a small, upscale hotel with a hip environ aged, and staff members acknowledge guests by name ment where the customers feel connected to the staff. Also, boutique hotels are known to provide a higher The beauty of the boutique segment is that it provides a wide range of opportunity for devel- opers. Unlike the name implies, boutique prop erties no longer have to be small to fit into the category; they can have hundreds of rooms. What hotels do need to have to enter into the expanding segment is panache, some roster of unique features, services, or amenitles that sets them apart and easily confirms that sense of exclusivity upon guests by association. quality and wider range of guest amenities; such hot properties surpass the standard amenity set by provid- ing whimsical offerings such as stuffed goldfish, pillow menus, and complimentary candies and nuts. Technol. ogy is also widely used to enhance the cutting-ed design, fashionable image, and convenience. Every room has high-speed Internet access, a flat-screen TV, a DVD player, and other latest technological gadgets The third feature is the number of rooms. Most commentators agree that boutique hotels should not exceed 150 rooms to maintain the intimacy between the guests and the hotel staff, and the personalized attention by the staff. Recently, however, there seems to be no upper limit on the maximum number of rooms; for example, among properties operated by lan Schrager, Paramount Hotel has 594 rooms, and -Stefani C. O'Connor, Executive News Editor, Hotel Business, 1006 Even though people seem to disagree on the defl- nition of boutique hotels, most commentators agree that they have four major defining characteristics. Hudson Hotel has 821 rooms. The last characteristic is the market that is at- tracted to boutique hotels. These hotels generally target customers who are in their early twenties to mid-fifties, in the mid- to upper-income brackets. Also, these hotels' corporate accounts include media, fashion, entertainment, and advertising companles First, as a general rule, boutique hotels put more emphasis on design and architecture than traditional chain hotels.2 Incorporating cutting-edge design and décor and featuring celebrity architects and designers' work, boutique hotels look very distinctive inside and outside. These interior and exterior designs create the personality" or "identity of each hotel.) For exam. that are attracted to the trendy design and lively ple, each guest room in Library Hotel in New York City has a different theme, such as romance and mu- sic. The goal of these hotels is to create a unique, intimate, and stylish environment that makes every their location.0 single stay different, even for repeat guests. Boutique hotels try to entertain their guests by creating a theat- hotels are in urban edgy and chic ne Although boutique hotels might vary in many aspects, they can be grouped into two types based on The first type is city destination hotels. These major cities like New York, London, San Francisco, hotels are still located in major cities, more compa- though the use of design, color, lighting, aroma, and music. and Miami. However, even is superior personal between hotel staff The second common f service. Intimacy and familiarity nies have recently been targeting less cosmopolitan 2007, Harry Nobles and Cheryl Thompson, "What Is a Boutique Hotel?" December 2001, January 30, 2008; http://www.hotel- Richard Miller and Keli Washington, Hotels and Reports online.com/News/PR2001.4th/Octo1 Bout 2Lucienne Anhar, "The Definition of Boutique Hotels," HVS In- ternational, December 13, 2001, January 29, 2008: http://www. Peter Jones, "Boutique Hotels, Boutique Hotels," October 18, 2004, March 2 l/hotel-online.com/Views/1000.html. Jones Lang Lasalle Report. Anhar, "The Definition of s Paula Dray-on and?Explanation / Answer
1. Development of new boutique hotels has several operational challenges associated with them. First of all boutique hotels have to differentiate themselves from the regular hotel chains by offering unique design features and unique services. The management will have to ensure that the design appeal of the hotel is maximized while working with constraints like limited funds and resources. Providing superior level of services during the initial phase of a boutique hotel will also bring with itself its fair share of operational challenges in the form of maintaining proper supply chain. Having a proper supply chain is a must to ensure that services are provided to customers on time and as per their expectations.
2. Mass customization of services is entirely a different ball game from the mass customization of products like a Dell laptop. Products provide tangible functional utility while services are more about intangible utility. This makes mass customization difficult in the service industry. Still this can be achieved in the service industry in general and boutique hotel industry by focusing on the standardization of the processes and products being offered. Processes and products like rooms, F&B (food and beverages) etc. can be standardized and this will help in increasing productivity and reducing costs.
3. Boutique hotels can maintain a consistent and a standard level of services without diluting their unique proposition by ensuring that the there is sufficient flexibility with regards to its operations and its business model. Without flexibility a boutique hotel will not be able to provide unique services. Boutique hotels will have to make use of latest technologies and leverage the use of data to provide services that best meets the requirements of needs of each customer in the most appropriate way.
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