Why Small Luxury Hotels Think Tiny Is Mighty in the Post-Pandemic Era

While luxury boutique hotels have always appealed to a certain set, Small Luxury Hotels of the World is trying to create more converts. In October, it launched a marketing campaign around a so-called “private collection” to amplify the message that “smaller is better.”

“In a way, we’re on a bit of a roll,” said Richard Hyde, chief operating officer of Small Luxury Hotels. “We’re in the right place at the right time, and our name says exactly what we do.”

Of course, big, bustling hotels with jam-packed lobbies and crowded bars still have devotees, but Small Luxury Hotels has found a niche now with travelers who no longer find this accommodation style attractive — whether it’s due to the concern over the pandemic, or a new-found desire for privacy, which many guests got used to during the pandemic.

To highlight just how many hotels have private accommodations, like stand-alone villas on the property, Small Luxury Hotels has debuted a “private collection.” They currently have 76 hotels that fit the criteria — which includes units having a private front door and a kitchen or kitchenette — in 28 countries, including a property that opened in the summer of 2021, Château Le Nessay on the Emerald Coast of Brittany, France.

Alternative to Airbnb

“We don’t want to be Airbnb, but we want to offer rooms that offer a bit more privacy, and a bit more space, for people like multigenerational families traveling together,” said Hyde.

Guests still, for example, get the hotel perks like a concierge service and on-site restaurant, without the struggle of booking adjoining rooms.

Small Hotels of the World believes its small properties can stand out from some of the other offerings in a crowded post-pandemic market.

“People don’t want to travel for leisure and stay at a hotel that has a big conference space with 310 delegates,” said Hyde. “Many of our properties don’t have conference rooms, and that appeals to guests.”

Hyde said they’ve even seen an increase in how long people are staying — with a bump from two nights to around three, on average.

“It’s a function of less business travel, but also that people want to stay longer in hotels, and also have less of a carbon footprint,” said Hyde.

Now, what’s considered “small” for a boutique hotel is changing, too.

“Hotels that are joining us are getting smaller and smaller — we have hotels in Mexico with just three rooms,” said Hyde. “It matches our customers’ desire for privacy, and they don’t want to mingle with other guests.” 

Rapid Response on Shifting Guest Tastes

When it comes to food and beverage, Small Luxury Hotels has also taken advantage of being nimble.

“We’ve found that over half of guests want to order a non-meat option, so we can’t just have one vegetarian dish,” said Hyde.

Many of the hotels in the collection already have farm-to-table practices and have found it relatively easy to shift to more plant-based menus, while large chain hotels, that require numerous corporate sign-offs, might find it more challenging to make a quick shift.

Even though leisure travel may be booming, Small Luxury Hotels still, like bigger hotels, must deal with staffing shortages and concerns over the looming energy crisis. They’re hoping, though, they fare better. 

“Properties are often family run, second or third generation, and if the owner is involved, the impact [on staffing] is slightly less,” said Hyde. Because of the community connection, there’s less staffing turnover, he said.

Still, to deal with inevitable job shortages, the company launched a job posting board on its site, and it’s created over 1,000 positions since July, Hyde said.

Being Agile on Sustainability

One area that Small Luxury Hotels is still trying to get the message out about, though, is its sustainability efforts. Many properties, they say, already have plenty of sustainability practices, but they need to start storytelling to let their guests know what they’re doing, considering guests now, more than ever, care about sustainability.

“The guests are demanding it now and have more and more questions around sustainability,” said Hyde.

To help spread the word, Small Luxury Hotels last year launched a “Considerate Collection,” where the hotels involved must pass standards set by the Global Sustainable Tourism Council.

And at the company’s conference this November, their partner Weeva, an energy-saving platform, shared ideas, like skipping the welcome message on the TV when guests first enter their room, or turning off the lights for turndown service.

“I think guests who stay at our hotels care more about saving energy than being welcomed on the TV screen,” said Hyde.

In the Shadow of the Big Brands

Smallness does have disadvantages. Independent hoteliers have an uneven playing field when competing against the big hotel groups when it comes to attracting direct bookings.

The hotel groups have loyalty programs that can drive repeat business and the advantages of scale when it comes to being cost-effective in their marketing and operational expenses. Inflation in labor and other costs could pressure some smaller hotels operators that may have defrayed some property upkeep during the pandemic’s lean years.

Small Luxury Hotels recently hired a new member of its social media team to create content for a burgeoning repository of TikTok content, and has claimed success there. Independent properties often have more idyosncratic stories to tell, which translate well on social media.

While Small Luxury Hotels is focusing on its smallness, the platform does have a partnership with a big chain — Hyatt. With the deal, World of Hyatt members can do things like use their reward points to book at their boutique hotels.

“Our partnership is hugely successful,” said Hyde. “The majority of our guests are Americans, and it’s a great way to match independently-minded guests who want independent hotels that aren’t, well, Hyatt.”

It looks like the conversion of guests from the religion of big branded hotels remains an ongoing fight, with many small luxury properties reluctant to give an inch.