Excerpt from CoStar
Some of the strongest increases in revenue per available room among boutique hotels were in soft-brand hotels like the Hotel Petaluma, Ascend Collection by Choice, in Petaluma, California. (Choice Hotels International)
Boutique hotels are performing well in 2022 and all classes show recovery in average rate and revenues, surpassing 2019 peak levels and leading the U.S. hotel industry.
Occupancy has not quite recovered to 2019 levels for the segment and partially the reason is that lifestyle and upper-upscale independent boutique hotels are slightly behind in revenue per available room recovery. Lifestyle hotels also reported very large supply growth through June 2022.
Compared to 2019, the strongest RevPAR increases were in the soft brand collection and independent luxury class due to a spike in average rate. Luxury class hotels across the nation achieved strong RevPAR growth through June 2022 from increased leisure travel.
Boutique hotel supply — the number of open hotel rooms — was at an all-time peak in 2019, led by the lifestyle, upper-upscale to luxury class hotels.
All boutique hotels declined in supply beginning in April 2020 for 10 months, as hotels closed in response to the pandemic.
Through June 2022, boutique hotel supply surpassed 2019 at an increase of 19%. This is compared to 3.2% supply growth for the entire U.S. hotel industry during the same period.
Supply growth is led by the lifestyle, upscale to upper-midscale class at 48.9%, compared to 7.1% growth for all U.S. upscale hotels and 6.7% for all U.S. upper-midscale hotels.
After a substantial loss in room revenue from March 2020 through February 2021, boutique hotels recovered strongly through June 2022, surpassing 2019 levels by 20.4%. CoStar hospitality analytics firm STR reports all hotel room revenue was up 7.1% through June 2022 compared to 2019.
Revenue increases vary widely by class groupings and are led by the lifestyle, upscale to upper-midscale class at 41.4%. This is compared to a 4.7% increase in revenue for all U.S. upscale hotels and a 12.3% increase for all upper-midscale hotels.
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