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Features - Jan 2008



The Bahamas Investor

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Boutique hotels: catering to high-end clientele

Boutique hotels: catering to high-end clientele

They are looking for superior luxury and second-to-none service

The Bahamas Investor Magazine
January 4, 2008
January 4, 2008
Jessica Robertson

Global growth in personal wealth coupled with the baby boom generation reaching retirement have resulted in more people travelling the world with expectations of superior luxury and second-to-none service. In The Bahamas, as elsewhere in the world, a stable of smaller hotels, resorts and bed and breakfasts is cropping up, and management is pulling out all the stops to cater to the whims and needs of this coveted group. From rooms outfitted with the most luxurious furnishings and fittings, to an attentive hotel staff at their beck and call, to a plentiful assortment of gourmet food on site, high-end travellers are expecting and paying for the very best.

“There’s a growing market of people who want absolutely nothing to do with the large, heavy-volume, hustle-and-bustle type of hotels that are out there,” says Russell Miller, president of the Bahamas Hotel Association. “They are looking for five-star or better resort facilities and that’s all they will stay at. These are people who come with their private jets or send their yachts in ahead of them and fly in to meet them. These are senior company executives, people who’ve made it big on Wall Street or financial investment bankers. This is a real high-end clientele.”

Boutiques all the buzz
The biggest trend in high-end, luxury hospitality right now is the “boutique hotel”—a concept that first emerged on the hospitality scene in New York in the early 1980s. The first establishments to market themselves as such were typically small, chic and eclectic, catering to anywhere from three to a few hundred guests. Usually, they had something unique to offer—a distinctive feature or mood that distinguished them from the competition. And for the most part, the properties were independently owned and operated. Since that time, as market demand has increased, a number of more mainstream hoteliers have adopted the label.

What qualities and features are necessary for a hotel to be classified as a “boutique hotel”? The definition of the term is hazy, as an informal survey of local hoteliers indicates. One local proprietor feels that “there are no boutique hotels in Nassau,” while another claims that only Graycliff is worthy of the name. Nestled in the heart of the historic city of Nassau, Graycliff offers the kind of five-star accommodations and dining that this elite and discriminating group of travellers is seeking. It is also rich in history and, some might say, notoriety. The main house on the property was built by a privateer (essentially a legalized pirate) and has subsequently been owned and occupied by a mobster’s companion and an English Earl. Some of the world’s most rich and famous have dined and lodged there, including the Duke and Duchess of Windsor, Sir Winston Churchill, Sir Sean Connery, King Constantine, Princess Caroline and even musicians Stevie Wonder and Steven Tyler.

Big names bring brand loyalty
Owned by Enrico and Anna Maria Garzaroli since 1973, Graycliff remains an independently owned and operated hotel; but many of the more recent entries into the boutique hotel market carry some of the biggest brand names in the luxury hospitality industry. These institutions are capitalizing on their established brand recognition, marketing dollars and recognized standards of quality and service in order to attract coveted guests.

This is vital to attracting certain visitors to the country, says Miller. “This type of luxury visitor, particularly those who favour these luxury properties, tend to be repeat visitors—not necessarily to a single destination, but within that classification. Some are brand loyal, always seeking out a Four Seasons or a Ritz-Carlton, whichever they prefer, but generally, if those properties are not available at a destination of choice, these travellers will seek out another five-star property with a name they know and trust,” he explains.

While in The Bahamas, fans of the Four Seasons chain, for instance, can enjoy the high standards to which they’ve become accustomed by visiting the Four Seasons Resort Great Exuma. With 183 rooms, it is on the larger side for a boutique hotel, but the service, amenities and spectacular ocean-side location make it a favourite with luxury guests.

One&Only Ocean Club is another boutique resort with an intriguing history to complement its top-of-the-line service and spectacular setting. The property was built in 1962 by Huntington Hartford II, heir to the Great Atlantic and Pacific Tea Company fortune. Hartford II can be credited, among other things, with persuading the Bahamian government of the time to abandon the unappealing name Hog Island in favour of the more marketable Paradise Island.

The estate was purchased in 1994 by Kerzner International, completely renovated and restored to its original wonder. In 2002, the ultra-exclusive One&Only brand was established. For the past three years, One&Only Ocean Club has earned the title of the best resort in the Atlantic by Condé Nast Traveller readers.

Mixed use for economies of scale
The newest entry into the high-end market is expected to welcome its first visitors in 2010. Ritz-Carlton is building the very first hotel on Rose Island, just a few minutes away by boat from Nassau and Paradise Island.

Because the profit margins on small hotels tend to be lower than on larger establishments and labour costs in The Bahamas are higher than in many other Caribbean-region nations, general operating costs are always on the rise. In order to offset these costs while still maintaining the small-hotel feel their clientele is seeking, many hoteliers are combining their establishments with other amenities in a mixed-use resort.

The Ritz-Carlton Rose Island will include 80 hotel rooms combined with residences in a condo hotel, as well as Ritz-Carlton Club residences, town houses and a 137-unit residential community. It will also feature restaurants linked to top international chefs, a spa and a 290-slip marina billed as the largest in The Bahamas. Miller, who is also general manager of The Ritz-Carlton Rose Island, says this trend is a necessary component to profitability.

“To operate these kinds of properties is very expensive and it’s not always as profitable as one would like it to be, so you’ve got to add some of these other features and amenities in order to make it profitable. You’re working, then, with economies of scale.”

Smaller properties seek synergies
In both New Providence and the Family Islands, smaller independent hotels, resorts and B&Bs are working hard to find ways to avoid shouldering all of the costs associated with running and marketing a small property on their own.

A Stone’s Throw Away is a 10-room plantation-style resort on the western end of New Providence, just five minutes away from Lynden Pindling International Airport. Its proximity has made it a favourite for island hoppers seeking high-quality accommodations before heading off to the Family Islands and for the business traveller whose meetings are primarily held in nearby Lyford Cay. This small welcoming property has a pool and there is a beach just a few minutes’ walk away. It has forged a reputation as a hotel that offers the tranquillity of the Family Islands, but still has access to the amenities of the big city. With no recognized brand affiliation, properties like A Stone’s Throw Away find it a challenge to get noticed by the high-end travellers to whom they cater.

“One of the biggest challenges is advertising. Small hotels can’t put a big ad in a major magazine because we don’t have the budget for it,” says general manager Khyla Finlayson. “The Internet has helped level the playing field, especially with mass booking sites that allow visitors to rate properties and give feedback on experiences because they tend to be completely unbiased in their listings.” A Stone’s Throw Away has been rated the top bed and breakfast on New Providence for two consecutive years by visitors to the travel site TripAdvisor.com.

Small properties in The Bahamas and throughout the Caribbean region experience the same challenges, so the Caribbean Hotel Association and the Bahamas Hotel Association are working with owners and managers to create linkages for advertising, tours and other areas. They are also striving to obtain recognized international accreditation to ensure visitors find precisely the kind of accommodations they are seeking.

Policy shift
The Ingraham administration has already stated that no more approvals for mega-resorts will be granted on New Providence. Once all of the construction and renovations on existing projects have been completed, the island will have sufficient hotel room inventory to allow for continued growth and development of the tourism industry.

Many feel that smaller boutique hotels and high-end bed and breakfasts are the best fit for the quaint Family Islands. With more visitors looking for these types of high-end properties, the Bahamian government has switched gears in its philosophy toward future development. “Rather than anchor properties—a phrase of the past—we are more geared toward developing high-end boutiques and bed and breakfasts,” says Minister of Tourism, Neko Grant. “We need to consider who we are catering to. The majority of our visitors are Americans and they want something a bit different.” He believes this new direction will not only ensure that The Bahamas continues to attract some of the most sought-after clientele, but will also help achieve another goal set out by government—to see more Bahamians become owners in the hospitality industry.

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