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Future of boutiques a hot topic

18 November 2004

The future of boutique hotels remained a hot topic at the Monaco conference.

Operators and analysts were divided on the controversial sector, with some predicting its imminent demise and others saying that the future remained bright.

Michael Flaxman - managing director, northern, central and eastern Europe, for hotel group Accor - damned the sector, saying the popularity of boutique hotels in recent years, especially at the high end, had been a short-lived trend.

"It is a phase - a lot of people who use them are returning to full-service offerings as they realise that is what they really need," Flaxman said. However, he conceded that some of the "midmarket" operators, such as Hotel du Vin and Malmaison, had done very well.

Robert Riley, chief executive of Le Meridien, was unconvinced that boutique operators could attract enough corporate business, and pointed out that "the small guys get hit quickest" during a downturn.

The idea that the sector is struggling was also thrown into question by Melvin Gold of Melvin Gold Consulting. "The market is actually coming back in 2004 in most sectors, and boutique hotels are actually doing pretty well," said Gold. "They are far from dead, and they are impacting on the full-service hotels in many ways. They are not just living, but moving on."

On the investment side, Ramsey Mankarious, chief executive of Cedar Capital Partners, was also positive. He said: "I think the sector will continue to grow - it still has a lot of legs."

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