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by Cheryl-Anne Sturken | January 28, 2011

As the market continues to improve, gaining a foothold in the lifestyle boutique hotel segment is a key strategy for hotel companies. In the past week alone, three major partnership deals were announced: Marriott International, which last October announced it was exploring a joint venture with the Spanish-based chain AC Hotels, has made it official: All 90 AC Hotels in Spain, Italy and Portugal will be rebranded AC Hotels by Marriott (not to be confused with the Autograph Collection, a group of independent properties that as of last year are represented in the Marriott porfolio). The deal greatly increases Marriott's representation in Europe, where it has been angling to expand its presence for a number of years.

Not to be outdone, Wyndham Hotel Group announced it had gained exclusive rights to franchise and manage New York City-based Chatwal Hotels & Resorts' Dream and Night brands, of which there are currently four, including two in New York City. In the works is the 108-Dream Beach, scheduled to open in Miami Beach later this year, as well as a third New York city property. “The addition of the Dream and Night brands will complement Wyndham Hotel Group’s diverse brand portfolio, which focuses on meeting guest needs with a hotel product for every kind of traveler,” said Eric Danziger, Wyndham Hotel Group president and chief executive officer.

And Sonesta International Hotels Corp. has thrown its hat into the boutique arena with the launch of KEPT Hotels and Resorts, which will be a collaborative partnership with design and branding company, Dodd Mitchell Design and Development. KEPT hotels will be 80 to 300 room properties in gateway cities and resort locations throughout the United States and Europe. John J. DePaul, Sonesta's executive vice president of development, said the venture "will provide our investment partners with an entry into a fragmented segment of the industry in need of fresh capital and leadership."

w2The boutique segment currently represents only one to four percent of the entire lodging market, but consumer demand for the product is much greater, according to Bjorn Hanson, divisional dean of the NYU-SCPS Preston Robert Tisch Center for Hospitality, Tourism, and Sports Management. "The brands are under-represented in this segment, and they want to quickly have representation," commented Hanson. The industry will see more partnerships unveiled in the coming months, he added, in large part because of a diminished pipeline, which is at a low not seen since 1991.

But as badly as hotel chains may want to notch their belt with a lifestyle brand, said Hanson, getting the concept right might prove the most difficult part. "Of all the chains that have attempted the boutique concept, in my opinion only one has gotten it right so far," he said (while declining to name names). Culture  clashes, Hanson warns, are inevitable when large, global companies try an individual, smaller-scale approach. "Ian Schrager would never say this publicly, but word is he is having a difficult time with his boutique concept [Edition] within the development demands of the Marriott structure," he said.