EFFECTS OF BOUTIQUE HOTELS � FEATURES ON ROOM RATES

Abstract

Boutique hotels have emerged as an increasingly popular choice of accommodation that offers guests with unique experiences. However, there are still limited studies on the contribution of their features to the revenue of boutique hotel operators. Hence, this paper aims to fill in the existing research gap by examining the effects of boutique hotel’s features on room rates. The principal features of boutique hotels that have been identified in this paper are settings of the property (Unique Settings), provision of personalised services (Personalised Services), offers of specially designed room (Design of Room), emphasis on quality services (Quality Services) and the presence of value added factors (Value Added Factors). The research framework in this paper adopts a triangulation model where exploratory research was employed to acquire an in-depth understanding on boutique hotels and descriptive research was employed through the use of quantitative research (survey questionnaires) and qualitative research (interview survey) to obtain data from boutique hotel guests. In addition, hedonic pricing model and cross tabulation analysis were employed as part of the quantitative research to ascertain the effects of boutique hotels’ features on room rates and to identify the extent of the effects, respectively. Results showed that the features of Unique Settings and Quality Services offered by boutique hoteliers have a positive impact on their room rates. While the features of Personalised Services, Designs of Room and Value Added Factors do not reflect significant findings, they are known to have contributed positively to room rates in boutique hotels. Lastly, several recommendations are provided for boutique hotel management teams to assist them in translating their efforts into higher guests visitorship as well as revenue.