Australia’s boutique hotels got expensive — but there’s a way to make them affordable

While a vast majority of U.S. hotels are attached to a big brand like Marriott or Hilton, that doesn't mean boutique and independent hotels are losing their luster everywhere in the world.

Just look to Australia, where the boutique hotel business is booming — and the big brands are clearly trying to get a slice of the pie.

A Coldwell Banker Richard Ellis (CBRE Group, Inc.) report cited by Skift's Daily Lodging Report notes boutique hotels in Australia overwhelmingly outperformed large, luxury hotels attached to international hotel conglomerates by a wide margin since the beginning of the pandemic in 2020. Australia's boutique hotels commanded average daily rates that were 27% higher than the major brands, while occupancy rates were 21% higher.

Part of this stems from Australia's lengthier, stricter travel restrictions that fueled more domestic travel even when other parts of the world began to reopen for cross-border travel. The strong base of leisure-minded Australians during the national lockdown favored more curated travel experiences, per the CBRE report.

It's highly likely the return of business and international travel will balance the scales back toward the biggest brands. However, it's clear the major brands see an opportunity in courting travelers who favor a boutique hotel during a vacation. This means you don't necessarily have to sacrifice earning points and enjoying loyalty benefits when you book a boutique hotel stay.

That's good news for travelers, as it means points hotels operating in the boutique space can end up saving you money by redeeming for awards nights instead of forking over the heftier nightly cash rates.

The big brands go boutique Down Under

Paris-based Accor made moves earlier this year to further its boutique-style hotel offerings by including two Australian properties in the launch of the Handwritten Collection. This is a mid-priced collection of boutique hotels still affiliated with Accor and its Accor Live Limitless loyalty program.

Wonil Hotel Perth was the first Handwritten Collection hotel to open in Australia, and the Hotel Morris in Sydney quickly followed. Another Accor collection brand of boutique hotels, the upscale MGallery Collection, also has properties in Australia.

It's not just Accor getting into the boutique business, either.

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Marriott Bonvoy members have options via Marriott's Autograph Collection and Luxury Collection of hotels. Hilton's Curio Collection also has a presence in Sydney.

Redeeming Accor Live Limitless, Marriott Bonvoy or Hilton Honors points can save the day in making your next boutique hotel stay Down Under all the more affordable.

For comparison's sake, weekend nights later this month at Pier One Sydney Harbour — part of Marriott's Autograph Collection — go for roughly 40,000 Marriott Bonvoy points per night or a cash rate that hovers around $400 per night.

Rooms at the West Hotel Sydney — part of Hilton's Curio Collection — start at 46,000 Hilton Honors points per night or a cash rate starting at $224 per night.

It's not just an Australian phenomenon: A Truist Securities report out Monday also noted the strength of U.S. independent hotels and soft brands, especially considering operating issues occurring at higher-end hotels coming out of the pandemic.

Gregory Miller, vice president of lodging and experiential leisure equity research at Truist Securities, explained it TPG via email:

"While some travelers understandably stay at branded hotels to earn or redeem their loyalty points and essentially 'know what they are going to get' when they book a stay at a globally recognizable hotel brand, there are plenty of reasons why independent and boutique hotels also have great appeal to travelers and can perform very well as Asia-Pacific travel rebounds. We are in a time when discretionary spend for experiential international travel is up materially as the world reopens and where independent and boutique hotels can be really desirable for vacationers."

Why do guests and companies like soft brands?

Whether it's Accor's MGallery and Handwritten Collections, Marriott's Autograph Collection or Hilton's Curio, there has been a boom regarding these so-called soft brands in the hotel ecosystem.

Take it as a sign the major hotel chains know travelers want to experience more independent-feeling hotels rather than stick to "hard brands" like Westin or Hilton that rely more on business travel. That's especially true in a climate with more leisure travel than business travel.

Soft brands run with more independence when it comes to things like food, drinks and design. That doesn't mean they are of any less quality than the hard brands, though.

"We try to keep it as flexible as possible, but there are certain standards when it comes to quality that need to be complied with," Alexander Schellenberger — Accor's chief marketing officer for premium, midscale and economy brands — told TPG earlier this year ahead of the Handwritten Collection launch. "We want to at least create some form of consistency around the quality for guests to experience, but for the rest, it's a soft brand."

So, while a soft brand may not have all the standardized branded bells and whistles of a Marriott or Hilton, you can sleep easy knowing they're still getting heavily vetted for quality and customer satisfaction.

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