INVESTMENT PROPOSAL

Boutique & Lifestyle Hotels

1. Executive Summary
After decades of brand standardisation, in which leading hotel companies such as Marriott
International, InterContinental Hotels Group (IHG), Hilton Worldwide and Starwood Hotels
& Resorts Worldwide provided consumers with a consistent product, the boutique concept
was launched during 1980s and what started as a niche product has over the last thirty
years become a global phenomenon.
This report aims to bring some clarity to the global boutique/lifestyle hotel sector, starting
by discussing the difficulties of defining the sector and given these difficulties, the main
characteristics of the boutique hotels reviewed by giving examples on how current boutique
hotels differ from the standard hotel product.
Preliminary research has been done through multiple research articles. After collating the
findings, situational analysis has been done to further aid in the understanding and learning
of the hospitality industry. Statistics and data on the overall performance of boutique hotels
in two key markets Singapore and Malaysia over the period of recent years will be covered
to give insights on the potential growth of Boutique and lifestyle hotels in both markets,
despite of the global economic slowdown.
The concept of boutique hotels and added value is discussed. While the hospitality industry
currently attracts many investors yearly, one has to take note on the trends of behavioural
patterns of consumers which may evolve from time to time. Boutique hotels are often not
just about developing a new hotel product, but rather adding value.
In the last part of the report, it will stress on the importance for hoteliers to constantly
differentiate itself to cater to wide demographics while focusing on understanding
consumers behavioural patterns so as to sustain their guests/ customers. Proposed
strategies have been outlaid too, lending insights on how boutique and lifestyle hotels can
implement and enhanced their own unique selling points through using social media.

2. Introduction
2.1 Overview of the Boutique Hotel Industry
Interest in boutique hotels, despite the relative slowdown in the global economy, remains
overwhelming high and still continues to grow. Global industry reports indicate that
operators continue to enjoy sustained profitability while outperforming the competing
corporate hotel chains despite during the recession.
New investors are keen to enter the market and established hotel operators are fast
expanding and developing new concepts to compete in this sector. The sector is booming
and individual investors, hotel chains and hotel operators alike are investing their stakes
into developing more boutique hotels globally, especially in Asia.
With hotels opening at an ever-increasing rate, defying tough economic conditions and yet
remains considerable growth and profitability, one can said that the investment made on
the boutique hotel sector is of high potential for future growth and that it is a sizable
segment of the hospitality and lodging marketplace.
2.2 Definition of the term Boutique Hotels
Any discussion on the boutique and lifestyle sector seems to inevitably revolve around how
to define, compartmentalise, limit and standardise the meaning of what is a boutique
hotel? as the whole concept focuses precisely on avoiding the limits of standardisation that
define consistent brand this presents a true quagmire for those seeking to shed light on
the mystery of the lifestyle-oriented hotel product.
Rather than present a definition, the following table illustrates words that are generally
associated with boutique hotels in contrast to words that are typically not used to describe
these hotels

INVESTMENT PROPOSAL SCOPE

This Proposal is embarked upon to convince investors that investments can be made in the
hospitality sector, specifically on boutique hotels from two key markets Singapore and
Malaysia, where there is excellent growth potential and exceptional return on investment.
SITUATIONAL ANALYSIS
Characteristics of Boutique Hotels
Seeing that it is so difficult to define exactly what is a boutique hotel, a summary of key
characteristics that boutique and lifestyle hotels have in common in the world are portrayed
below where the majority of boutique hotel operators, creators, and owners have agreed
upon:
Resort Location
o Boutique hotels in resort destinations are exotic, small and intimate.
These hotels give their guests the chance to explore the local feel
without sacrificing luxury.
o Often the more difficult a destination is to reach, the more fashionable the
location is considered.
o In resort destinations, service is generally more important than it is in city
destinations.
City location
o Boutique hotels in city destinations, location still ranks number one on
guests' priority lists.
o Good locations for boutique hotels are not determined only by manner of
convenience, but also by the trendiness and chicness of the respective
neighborhoods.
o Most existing city boutiques are located in happening cities.
o In recent years more and more companies are targeting other smaller cities
that still have strong potential for boutique hotels;
Cities with vibrant economies and high-end residential areas but just
has standardized hotel inventories.
Technology
o Technology has a strong focus either with lighting and music or technology
that is provided for the guests (such as in-room, DVD players, flat screen TVs,
cordless phones, and high speed internet access)
Entertainment
o The entertainment in the boutique hotel plays an important role in creating a
lively, chic and trendy atmosphere.
o

Entertainment is not just live music and performances, but the idea of a
boutique hotel is entertainment in its own nature; hip restaurant, lounge,
and bar; its theme or decor.
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 Size
o Many industry commentators feel that size is an important factor when
determining a boutique hotel. However, they appear to range from very
small in double figures up to more than 600 rooms. Some argue that it is
difficult to over the personalized service that the concept is renowned for at
such high levels of rooms in the 400 to 600 range. For example Marriotts
Autograph Collection ranges from 3,000 rooms The Cosmopolitan Las Vegas
to a 15-room retreat.
Experience
o

Most boutique/lifestyle hotels aim to offer the guest some type of

experience.

According to Bjorn Hanson, global hospitality leader for

PricewaterhouseCoopers, experience is mostly being aimed at
younger generations, with more natural materials and fabrics, food
geared toward grazing rather than dining, a greater emphasis on
technology and common areas that offer guests a variety of places to
congregate, as younger travelers seek out social environments more
than their elders.

While Schrager defines boutique as an approach and attitude, where

emphasis on entertaining his guests by creating a theatrical
atmosphere are used to attract all the senses: through architecture,
design, colour, lighting, art and music.

Architecture and design

o Style, distinction, warmth and intimacy are key words in the architecture and
design of boutique hotels which seem to attract a niche of customers looking
for a special and differentiated property able to fulfill their individual needs.
o Boutique hotels are not standardized, they are individual and unique. Many
boutique hotels introduce different themes in each guestroom, making every
single stay unique, even for their repeat guests.
o Many hotel owners are revitalizing older hotels, repositioning them as
boutique properties. While true modernism and newly born design generally
become "hip" in no time, it is usually those properties that succeed in
combining historic details with chic elegance that outlast the fads.
Service
o Boutique hotels feel that what differentiates them from standard hotels is
the connection that hotel guests experience with the staff. Personalized
service is considered to be a key aspect.
Target market

o Boutique hotels generally target customers who are in their early 20s to mid50s, with mid- to upper-income averages.
With that in mind, this will give investors insights on how boutique hotels have
differentiated themselves from the standard hotel product.
The New Consumer: Perspectives & Expectation of Boutique Hotels
Developing/evolving consumer habits can help to explain the growth of boutique hotels as
guests are becoming more aware of design, expect a higher level of service, and are
increasingly seeking an experience instead of a commoditized product. Guests increasingly
want to feel recognized and like to feel part of a unique experience.
As in retailing, knowing your customer has become a basis of competition for hotels. At the
same time, the world in which many hoteliers operate has changed and it has become
increasingly fragmented. Some of the complex issues and forces for change include:
The fluidity of 21st century consumer lifestyles:
o As attitudes and behaviours change in unpredictable ways, companies have
found that applying blunt definitions of life stage and lumping consumers
into one catch-all segment no longer works. New consumer patterns are hard
to read and new models for understanding consumer behaviour are needed.
The rapidly evolving meaning of value:
o Research shows that we paid more for food that it perceived to be better for
us. Similarly with hotels, consumers are more likely to pay for attributes and
experiences that they value, such as location, safety, experience, ambience
and ego-fit. Value has emotional as well as financial attributes. Hotels will
need to ensure that they know what consumers really value and are
prepared to pay for.
Increasing wealth versus discretionary income squeeze:
o While on the one hand the wealthy are becoming wealthier, at the same
time, many consumers are suffering from the effect of the global slowdown.
In emerging markets, the level of GDP growth is leading to increasing
numbers of the populations joining the middle classes with higher disposable
incomes, which they are using to spend on travel and hotels.
The secret of lifestyle hotels popularity is simple: they are in tune with the needs of the
new, complex consumer. Hence, the above has discussed how todays consumer wants to
be recognised, valued and above all, be seen to be unique.
In summary, the new consumer wants better and more personalised experiences. Increased
prosperity and high levels of personal comfort in the home have raised the bar significantly.
And many consumers are now operating very much in what the motivational psychologist
Abraham Maslow called the self-actualisation or self-fulfilment space of human needs. In

other words, they are increasingly willing to invest time and money in individualised
pursuits.
People need to feel part of society. But at the same time they want to feel special and
unique. Consequently, there is an active movement to avoid the mainstream in favour of
personalisation and unique experiences. The popularity of boutique hotels can be seen as
reflecting and indeed satisfying aspects of the desire for the aspirational as well as
wanting to feel special.
Staying at one makes guests feel special and included in some sort of exclusive club. But
now exclusivity is coming within the reach of ordinary people not just the rich and famous.
New consumer patterns are hard, if not impossible, to read using traditional methods, and
classifying consumers into traditional broad typologies simply do not work anymore. In
response, sociologists and marketers have coined new names and groups for these
consumers. These include:
Tribes dividing consumers into smaller, more flexible and informal groups. They are
searching for identity and are made up of people who though individualistic in their
approach, are seeking new groups to identify with and belong to based on common
motivation, culture or interests. These could be:
Bobos (Bourgeios-bohemians) 35-55 years old whose values fuse those of both
1970s hippies and 1980s yuppies
Cultural creative wanting a fairer more friendly society based on so-called feminine
values
Bloggers internet bloggers who send out information in real time and collect
readers opinions
Bar crowd 20-35 year old wanting social bonds, obsessed by their careers and
following an individualist model.

INDUSTRY ANALYSIS
To give investors an immediate understanding of the boutique hotel business and the
industry, an overview of the global boutique hotel market and the ever- evolving consumer
habits and expectations are discussed.
Industry Analysis: New brands
New boutique and lifestyle brands continue to enter the market.
Carlson Rezidor Hotel Group and Radisson Red and Quorvus Collection
o Carlson Rezidor Hotel Group (CRHG) announced in early 2014 the launch of two
new global hotel brands, Radisson Red and Quorvus Collection.
o CRHG aims to have more than 60 Radisson Red hotels and 20 hotels in the
Quorvus Collection by 2020
o The company has USD50mn in equity to start developing the first five Radisson
Red hotels in the US, with another USD15mn for brand development.

Radisson red is described as a lifestyle select brand

Will focus on technology, with a contemporary purpose-driven
design focus, will convey an eclectic, modernist aesthetic.

Quorvus Collection as a curated collection of contemporary luxury

hotels that celebrate the local culture.
Will offer a suite of hallmark services and will comprise six core
lifestyle elements wellness, replenishment, style, inspiration,
entertainment and connectivity38.

o The first five could be fully owned and operated, joint ventures or sliver equity
with management.
o The first two are expected to be open by the end of 2015. The first Reds to
open globally could be conversions of Radisson Blu properties in EMEA.

Commune Hotels & Resorts and Tommie

o Commune Hotels & Resorts, which owns the Joie de Vivre and Thompson
Hotels brands, launched a new budget conscious brand in late 2013.

Called Tommie
The brand is a design-centric, value conscious line of hotels
which are to be located in gateway cities internationally.
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Rooms are ergonomically designed but space efficient.

Will have casual communal areas, self-check in system and a
gourmet grab and go market place.
o

There are plans to open two hotels in Manhattan in 2015.

Marriott International and Moxy

o Moxy was created in partnership with Nordic Hospitality and with Inter
Hospitality Holding as the owner and developer of the first six properties.

Nordic, which is based in Norway, already operates hotels in Scandinavia

under franchise agreements with Marriott International.

Inter, based in the Netherlands, and is currently focused on acquiring

sites for hotel development in Germany, the UK, Italy, Netherlands,
Belgium and Austria.

o The brand was developed with the millennial traveller in mind, with each hotel
designed with the latest in technology so guests can connect amidst inviting
social spaces with self-sufficient service elements.
o The company expects to sign a further 13 hotels in Europe by the end of the
year as it seeks traction for its newest flag in what, to it, is an unfamiliar
segment.
o Following the debut of Moxy Hotels this September at the Milan Malpensa
Airport in Italy, the company plans to open five additional locations in key cities
throughout Europe by 2015 including Munich, Berlin, and Frankfurt, as well as
Oslo.

The Moxy Hotels

Website adds new locations coming soon in: London, Edinburgh,
Brussels, Amsterdam, Malmo, Hamburg, Essen, Heidelberg,
Ludwigshafen, Leipzig, Munich, Liverpool, York, Inverness, Cardiff
and Dublin.
Current Plan: 150 hotels within the next 10 years, with the
company noting that the economy tier in Europe represents
nearly half of total room supply, yet only 20% of these hotels are
branded.
Brand: Currently being developed in the European market only.

o Marriott International has the Fairfield Inn brand in the segment in the US,
Canada and Mexico.

Industry Analysis: New Trends

Through extensive research from various sources, a compilation of new and upcoming
trends pertaining to the Boutique Hotel Market are being summarized below. These include:
Sleep Swamis
o Hotels have been offering guests access to personal chefs, personal trainers
and health and wellbeing gurus for some time.
o Now some hotels are going the extra mile to ensure that guests have a good
time even when asleep.
E.g, Anantara Kihavah Villas in the Maldives has a slumber guru
responsible for making sure guests get a good nights sleep.
Local life
o Hotels are helping guests to get to know the locals or at least get to grips with
the local scene.
Social media
o Hotels are getting wise to marketing via mobile.
Like it? Tweet it? Instagram it?
Some have even been built specifically with social in mind.
The 1888 Hotel in Sydney, its design was mapped out to
maximize its Instagram ability, and some of the Melia
hotels have specialist concierges who respond to guest
requests via Twitter.
Family
o Travelling with children is a growing trend. Some hotels are picking up on
this.
E.g, a Six Senses hotel in China (set to open in 2014) has village style
accommodation which works well for families, kids club and activities
for children.
Beyond the bedroom
o Rather than simply providing a bed for the night, hotels are offering more for
your money.
Leading to the introduction of statement bars, lobbies and libraries.

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GROWTH POTENTIAL IN SINGAPORE & MALAYSIA

Tourism in Singapore and Malaysia are a growing industry and it shows no signs of slowing
down.
To support the notion that there is growth potential of boutique hotels in these two key
markets Singapore and Malaysia, analysis of the overall performance of Boutique and
lifestyle hotel in both markets are being portrayed using statistics such as tourism receipts,
international visitor arrivals, hotel room revenue and occupancy rates.
SINGAPORE
o Tourism Receipts (TR)
In the first quarter of 2014, Tourism Receipts (TR) grew 5 percent year-on-year to S$6.0
billion while International Visitor Arrivals (IVA) held steady at 3.9 million. Although visitor
arrivals in Q1 2014 were mainly impacted by the 14 per cent decline in arrivals from P R
China due to the continuing impact of the tourism law that was introduced on 1 October
2013, IVA still grew 2.8 per cent year-on-year, excluding visitor arrivals from P R China. This
shows that the Singapore is a potential market to venture into as it enjoyed strong growth
in IVA, which may account to higher hotel revenue and occupancy. In fact, gazetted hotel
room revenue has depicted a strong 12 per cent growth to hit S$0.8 billion in Q1 2014.

Note to Editors

This quarterly report provides a summary of key statistics on tourism receipts, international visitor arrivals and gazetted hotels. The
analysis in this report is based on data from a variety of sources, including Disembarkation/Embarkation cards, the Overseas Visitors
Survey (OVS) and the monthly hotel returns from gazetted hotels. Data derived from the OVS are subject to sampling error. Users are
advised to exercise discretion when drawing any conclusions or inferences, or taking any action, based on the data. Data is correct as at
the time of publishing.

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In Singapore, excluding expenditure on Sightseeing, Entertainment & Gaming, the top three
TR generating markets in Q1 2014 are P R China (S$800 million), Indonesia (S$658 million)
and India (S$284 million) which made up 39 per cent of TR.

Of the top 10 markets, Japan (+11%), UK (+11%) and Thailand (+8%) had the highest yearon-year growth in TR. All three markets were boosted by increased traffic in Q1 2014.

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o International Visitor Arrivals (IVA)

Singapores International Visitor Arrivals (IVA) held steady at 3.9 million from the same
quarter last year. Indonesia (749,000), P R China (557,000), Malaysia (288,000), Australia
(270,000), and Japan (215,000) were Singapores top five international visitor generating
markets from January to March 2014. These markets accounted for 54% of total IVA for the
first quarter.

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o Gazetted hotel room revenue

Gazetted hotel room revenue for Q1 2014 came in at S$0.8 billion,a strong 12 per cent yearon-year growth. Average Room Rate (ARR)2 stood at S$261 in Q1 2014, a 2.7per cent rise
year-on-year. ARR for all hotel tiers increased fromQ1 2013, driven by growth in the Luxury
segment.
o Average Occupancy Rate (AOR)
Average Occupancy Rate (AOR)3 stood at 86 per cent, a marginal 0.4 percentage points
decline over the same periodlast year. The stronger performance in ARR attributed to a 2.2
per cent increase in Revenue Per Available Room (RevPAR)4 to S$224 inQ1 2014. The Luxury
tier recorded the strongest growth rate at 11.9 per cent.

Note : The hotel tiering system is a reference system developed by the Singapore Tourism Board (STB) to
categorise the different hotels in Singapore into tiers based on a combination of factors that include average
room rates, location and product characteristics.A round of tiering exercise was completed in mid-May 14, and
was effected on hotel data from January 2014 onwards.

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Share of room stock for the luxury and economy tiers increased, share of upscale room
stock declined while share of mid-tier hotels were maintained. Figures for the hotel industry
are preliminary estimates, based on returns as at 13 June 2014. The current hotel tiers
published are based on the hotels performance in 2013. The response rate across the tiers
may vary.
Luxury - Includes hotels in the luxury segment and are predominantly in prime locations
and/or in historical buildings
Upscale - Includes hotels in the upscale segment and are generally in prime locations or
hotels with boutique positioning in prime or distinctive locations
Mid-Tier - Includes hotels in the mid-tier segment and are primarily located in prime
commercial zones or immediately outlying areas
Economy - Includes hotels in the budget segment and are generally located in outlying areas

o Overview of Boutique Hotels in Singapore

The increasing popularity of boutique hotels around the world pushed Singapore
to step up its game in offering a wide range of hotels to dazzle guests with a
visual feast of design aesthetics and originality.
Typically priced between $200 - $300.
Usually small hotels with under 50 rooms.
Many in Singapore are located in restored shop houses in ethnic areas.
Lacks 5 star amenities like swimming pools, gyms and tennis courts.
Quirky designs that make your stay a unique experience

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Refer to Appendix A
For reference on Top 10 Most Popular Boutique Hotels in
Singapore
Refer to Appendix B
For reference, on the Location and Price of Popular Boutique
Hotels in Singapore
This will give investors/ hoteliers some insights on
formulation of location and pricing strategies for
boutique hotels in Singapore

MALAYSIA
o International Tourist Arrivals and Receipts
In 2011, Malaysia has registered 24.71 million tourist arrivals, which placed Malaysia as the
9th most visited country of the UNWTO top-ten list of countries with highest tourist arrivals.
In 2012, Malaysia recorded a total of 25.03 million arrivals compared to 24.7 million arrivals
for the same period in 2011. This represents a growth of 1.3% in tourist arrivals.
With Singapore, being the biggest contributor to Malaysias tourist arrivals with 13.01
million (51.99%) in 2012 ,other the top ten tourist arrivals in the short-haul markets from
Indonesia (2.38 million), Thailand (1.26 million), Brunei (1.26 million) and Philippines (0.51
million), key medium-haul markets from China (1.56 million), India (0.69 million), Australia

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(0.51 million) and Japan (0.47 million) , one can be certain that there is growth potential in
the boutique hotel market in Malaysia

The tourist receipts for 2012 increased by 3.9%, generating RM60.6 billion to the economy
as compared to RM58.3 billion in 2011. Malaysias tourism sector is anticipated to maintain
its prominence as the countrys third largest foreign exchange earner to the economy.
o Hotel Occupancy Rate
The overall national hotel occupancy rate for the 1st half increased by 3%
to 60.6% in 2011 compared to 57.6% in 2012. This is in tandem with the
increase in international and domestic tourists.
Pahang recorded the highest occupancy rates at 80.4%. The Federal
Territory of Kuala Lumpur and Selangor recorded the second and third
highest occupancy rates of 65.1% and 63.5% respectively.
The Average Hotel Occupancy Rate - by State/Federal Territory (F.T.) is
shown below.

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With the statistics above, it can be deduced that Malaysia remains an attractive destination
for tourists and so is a potential market to tap into.
Refer to Appendix C
For reference, on the Location and Price of Popular Boutique
Hotels in Malaysia
This will give investors/ hoteliers some insights on
formulation of location and pricing strategies for
boutique hotels in different regions in Malaysia
Refer to Appendix D
More supporting documents for reference to portray that
boutique hotels market in Malaysia is a potential market to
tap into
SINGAPORE & MALAYSIA
To summarise the tourism industry in Asia and the Pacific, the statistics and data has
reflected the vitality of the tourism industry in both markets--- Singapore and Malaysia.

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Besides that, the Boutique hotels market fits in terms of operations and profitability. Both
the strong customer demand and economics are favourable for operators. Moreover, hotels
also tend to have a higher percentage of repeat business compared to the industry in
general, which may reflect a smaller degree of volatility when going through difficult
economic times.
In fact, it can be seen that over the past five years, hotel occupancies have remained steady
and the growth trend is expected to continue in 2013.
RECOMMENDED STRATEGIES & FRAMEWORK
In light of the analysis on current trends of boutique hotels industry, the recommended
strategies are proposed and are based on the success stories of boutique properties.
To begin with, fundamentals such as location, experience, service, product quality, market
demand, a clearly defined marketing approach, and effective distribution/reservations
coverage have to take into consideration in creating a unique selling proposition for
boutique hotels today:
Experience
It has shown that consumers believe that what distinguishes boutique hotels from
standardized hotels is the connection that hotel guests experience with members of the
hotel staff. Most of these hotels impose the acknowledgment of guest names by all hotel
staff members.
Service
Personalized service appears to be important and the emphasis on entertaining their guests
by creating a theatrical atmosphere that attracts all senses: through architecture, design,
colors, lighting, art, and music.Most guests stay in boutique hotels because it is fashionable
to do so, not because of the facilities the hotels offer.
Marketing & Branding
Boutique hotels are being marketed in a manner that is similar to many other goods, where
the experience and the image are sold, rather than the product itself. Marketing an
independent boutique hotel can be difficult, as there are generally financial restrictions and
other resource restrictions. The main issue in marketing a boutique hotel or resort involves
"sending a message" to the target market.
Story development is more important than ever, which relates back to the special nature of
the experience or location, or the history behind the creation of the hotel. The unique and
easily related story must then be delivered through effective and affordable channels such
as direct mail or direct sales, allied group marketing, affinity group travel planners, and
public relations through press.
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Nevertheless, smart boutique hotels must continue to adapt to the incessantly changing
needs, tastes, preferences, and fashions in order to remain competitive in the flourishing
boutique hotel market.
One of the ways to stay sustainable is to use the different channels of social media to
directly improve hotel online bookings.
Examples of social media

Facebook is one of the most important forms of media for hotels, and is probably currently
one of the best opportunities to directly improve hotel online bookings. The majority of
hotel Facebook pages encourage their guests to interact with them. A hotel can put details
of its property on its page along with photos and contact details.
Hotel Analyst, on discussing the links between Facebook and TripAdvisor, propose that as
the major social media systems become increasingly interconnected, the possibilities to
leverage user-generated content expand exponentially. Nowhere can this be seen better
than with the links between FB and TripAdvisor, whose unique combination of where you
have been and who you know is proving very powerful in terms of influencing consumers.
Online user-generated travel reviews are already highly influential, falling behind only
personal recommendations from friends and family in terms of credibility according to a
2011 study by Nielsen. But what TripAdvisors use of Open Graph does is effectively
combine these two factors together, allowing the user to see what their friends, and friends
of their friends , think and recommend, thus creating a very powerful recommendation
tool30.
The majority of boutique and lifestyle brands have a Facebook page, in this report, of those
brands profile, only three did not have a Facebook page, and these were Cheval Blanc,
Hualuxe, and Baccarat Hotels & Residences.

Twitter is an online social networking and microblogging service that enables users to send
and read short 140-character text messages, called tweets. Registered users can read and
post tweets, but unregistered users can only read them. Users access Twitter through the
website interface, SMS, or mobile device app.
In 2013, Twitter acquired Spindle. It is anticipated this will make Twitter ever-more
important to hospitality marketing strategies,as the site continues to work on figuring out
how to monetise its massive user base.

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For hotels, involvement with local services is important in terms of making visitors aware of
their presence, the facilities they offer, special offers, as well as giving them a chance to
interact. With Spindle discovery through maps as well as alerts, the marketing possibilities
around Twitter are starting to become deeper.
SoLoMo (Social Local Mobile) has vast potential for hotels and other hospitality suppliers.
Until now, even though highly interesting in theory, SoLoMo has been very difficult to
implement in practice. But all that could change if Twitter succeeds in integrating seamlessly
with Spindle31.
Marriott is one of the leading travel brands on Twitter. From the start of its social media
division, the company has used it tosolve customer issues, share customers stories, and
enable them to speak openly about the brand. The hotel is divided into many different
accounts for all of its locations around the world. Although they all garner thousands of
followers, the biggest Twitter feed it has is @MarriottIntl, which has over 298,000 followers.
Twitter is very popular within the hotel community, with 69% of the profiled brands having
a twitter account. The number of followers varied from a thousand to 64,000 for
Renaissance. Some companies twitter by company, others are more specific and twitter
accounts are operated by the individual hotels in the portfolio.
CONCLUSION
To sum it all, although there is high potential growth of Boutique and lifestyle hotels in both
markets-- Singapore and Malaysia, investors and hoteliers still have to understand that as
the hospitality industry is a constantly evolving sector, it is essential for them to be updated
on the emerging trends in order to remain competitive, and sustain in the long run.

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References

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Appendix D: More supporting documents for reference to prove that boutique hotels mart
in Malaysia is a potential market to tap into
a) http://www.thestar.com.my/Business/Business-News/2014/03/31/Steady-growthfor-hotel-occupancy-Shortterm-impact-seen-from-MH370-tragedy/?style=biz

PETALING JAYA: Hotel occupancy rates in Malaysia are expected to see steady growth this year,
despite a short-term impact from China tourists due to the tragedy surrounding Malaysia Airlines
flight MH370, according to industry observers.
We expect a short-term impact mainly from the Chinese, said one industry observer.
According to reports, Chinese tourist arrivals account for about 12% of total tourists into Malaysia.
Chinese travellers rose significantly for the first nine months of last year to 1.4 million from 1.2
million in 2012. Tourist arrivals totalled 18.8 million for the first nine months of 2013 (2012: 1.2
million).

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According to Tourism Malaysias website, the countrys average hotel occupancy rate rose to 62.4%
in 2012 from 60.6% a year earlier.
Another industry observer said he expected inflow of tourists from other countries to remain steady
despite the airline tragedy.
I dont think one isolated incident will deter people from travelling. People will still travel if they
want to, he said.
Earlier, property consultant CH Williams Talhar & Wong Sdn Bhd (WTW) had projected that hotel
occupancy rates this year would likely strengthen to 70%, assuming current economic trends stayed
on track.
Five-star hotels are expected to continue seeing robust occupancy, while three- and four-star
hotels are forecast to see a stable-to-moderate improvement in occupancy this year.
After dipping 2.2% in 2009, the average room rate (ARR) has been strengthening steadily year-onyear from RM227 per room in 2009 to RM255 in 2013, said WTW in its 2014 property market
report.
The property consultancy firm said ARR growth for three-star hotels, which had been a laggard
recently, saw a 3% rise year-on-year to RM130 per room in 2013, while four-star hotels maintained
their steady progress, growing from RM223 per room in 2012 to RM233 per room in 2013.
ARR was flattish for five-star hotels, marginally improving from RM323 per room in 2012 to RM327
per room in 2013. There are a number of ageing four-star hotels, especially in central Kuala Lumpur,
that are finding it increasingly difficult to maintain occupancy levels in light of the increasing number
of newer competitors.
Their falling occupancies have contributed to the lacklustre average occupancy rate performance by
the four-star hotel class in recent years.
WTW, however, noted that a number of four-star hotels, many of which were relatively new, had
bucked the trend and had seen occupancy rates and revenue rising over recent years.
Three-star hotels will continue to see stagnant-to-modest improvement in reflection of a stable
outlook for the domestic tourism market. Five-star hotels look set to continue their strong
performance by catering to an increasingly affluent class of international tourists from the East Asian
economies.

b) http://www.propertyguru.com.my/property-news/2014/12/77568/pahang-recordsthe-highest-hotel-occupancy-rate

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c) http://www.propertyguru.com.my/property-news/2014/12/77359/malaysiacontinues-to-strive-target-of-28-million-tourists

d) http://www.propertyguru.com.my/property-news/2013/10/34512/asia-hotelinvestments-up-145

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e) New hotel launches expected to boost tourism in Penang

Posted on May 9, 2014 | 2143 views | Topic : Property News.
BY DAVID TAN
GEORGE TOWN: The completion of the Subterranean Penang International Convention and Exhibition Centre (SPICE) in
2015 and the Penang Waterfront Convention Centre (PWCC) in 2017 will drive up the demand for hotel rooms in Penang.
The Malaysian Association of Hotels (MAH) Penang Chapter expects an increase in visitors from the meeting incentives,
conventions, and exhibitions (MICE) market.
There will be a shortage of hotel rooms. There are currently over 14,000 rooms from the 52 members of MAH (Penang),
said MAH Penang vice-chairman Andy Fong.
Last year, the number of international arrivals at the Penang International Airport grew by 9.32% to 671.2mil from 614mil
in 2012, according to statistics obtained from Penang Global Tourism.
Domestic arrivals at the Penang International Airport also increased to 1.5mil in 2013 from 1.2mil in 2012.
We can expect similar quantum of increase for both international and domestic arrivals this year, Fong said.
Thus the hotels planned for opening this year and in 2017 will help to ease the shortage of hotel rooms, Fong said.

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There are six hotel projects with an approximate gross development value (GDV) of RM693mil materialising on the island
between 2014 and 2017.
These six hotels comprise the RM300mil The Rice Miller Hotel & Godowns, RM250mil The Wembley St Giles premier
Hotel and the Cititel Express Penang, RM25mil Victoria Street Hotel, RM33.8mil OZO Hotel, and an unnamed RM80mil
hotel in George Town.
Besides the The Rice Miller Hotel & Godowns, the Wembley St Giles Premier Hotel and the Cititel Express Penang which
are contemporary themed projects, the rest are boutique hotels with heritage themes.
These hotels will add some 1,157 rooms to the local hospitality industry. Penang will be in need of more hotel rooms when
the Subterranean Penang International Convention and Exhibition Centre (SPICE) starts operating in 2015.
The Rice Miller Hotel & Godowns and the Wembley St Giles Premier Hotel and the Cititel Express Penang are scheduled
to start operations by the end of 2014.
The most popular hotel in Gurney Drive, which will be scheduled to open in July, is the new block of G Hotel.
Asian Global Business Sdn Bhd chief marketing officer Jennifer Cheng said the Rice Miller Hotel & Godowns, a partial infill
development and restoration project, comprised a 46-suite hotel, retail space with 17,000 sq ft of lettable area, two fivestorey office blocks, and 99 units of city residences.
The company restored two nine-teenth-century heritage buildings to accommodate a hotel and commercial outlets.
There are in total 46 hotel suites, inclusive of a penthouse. There is also a residential suite component with 99 city
residences, called the Rice Miller City Residences, each with a built-up area ranging from 1,000sq ft to 2,500sq ft.
The units are priced at RM1,400 per sq ft. We have sold 60% of the city residences, she said.
The food and beverage facilities include a Kate@9, which serves contemporary cuisine, The Mill, which serves local and
international food, and the Sweet Spot, a bakery cum pastry cafe, and an international vegetarian restaurant.
There will also be a couple of trendy bars, and 23 retail outlets.
Cititel Hotel Management Sdn Bhd (CHM) managing director Datuk Eric Lim said the Wembley St Giles premier Hotel and
the Cititel Express Penang, with a combined RM250mil GDV, are also scheduled to start business by end of 2014.
The two hotels are adjoined by a shopping podium. The Wembley St Giles premier Hotel, a four-star hotel with 415
rooms, is designed to house the largest pillarless ballroom in George Town, with a seating capacity of 1500 persons and is
most ideal for banquets, conferences and conventions, several meeting rooms.
It is also the first hotel with a helipad. This development will also include retail space, restaurants and food court, Lim
added.
The Cititel Express Penang is a three-star hotel with 234 rooms. Both hotels target the leisure and meeting, incentive,
convention, and exhibition (MICE) markets.
Both hotels have a total of 542 car parking bays, Lim added. East Design Architect director Lawrence Lim said the
company was undertaking the designing work for The Rice Miller Hotel & Godowns in Weld Quay, Victoria Street Hotel in
Victoria Street, OZO Hotel in Argyll Road, and the unnamed hotel project in Magazine Road.
The Macalister Mansion all lighted up at night.
The unnamed RM80mil hotel project is an infill development scheme with a colonial facade.
The 250-room hotel is built on top of a shopping podium, which is also designed to accommodate medical centres, he
said.
Lim said the OZO Hotel at Argyll Road, a contemporary themed hotel, had 132 rooms, and all its recreational facilities such
as swimming pool, gymnasium, and sky lounge, on the highest floor.
The five-storey Victoria Hotel, an infill development, would have a nineteen-century colonial commercial building facade
and 80 rooms, each with a built-up area of 250sq ft.
It is a four-star hotel with a roof-top swimming pool, sky bar, and food and beverage outlets on the ground floor, Lim
added.
Fong said the hotels in Penang achieved a 70% occupancy rate for January and February 2014 on sales of over 160,000
rooms for each month.
Last year in the same period, the occupancy rate of local hotels was about 65%.
For the whole of last year, the occupancy rate of local hotels was 66.5%, registering sales of about 2mil room nights for
the whole year.
This year the occupancy rate should exceed over 70%, Fong said. On room rates, Fong said due to the higher cost of
doing business, the room rates for local hotels were expected to increase by about 10% by the end of this year.

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Presently, the rate of city hotels ranged between RM400 and RM500 per night, while those in the rates of beach hotels
are between RM300 and RM800.
The rate of heritage boutique hotels are between RM400 and RM1,000. Hotel room rates have increased about 8% since
2012.
Fong said Penang was getting more tourist arrivals from Indonesia, China, Japan, Australia, and UK.
We expect the occupancy rate of heritage boutique hotels to rise over 80% this year, Fong said.
According to Fong, what attracts foreign visitors to boutique heritage hotels in inner George Town is the way the projects
are being restored for adaptive commercial use.
The intricacies of restoration work and the antique furniture used determine the pricing of the rooms per night, he said.
Fong, who is also the general manager of 23 Love Lane, a boutique heritage hotel, said its guests were interested in the
details of the restoration and do not mind the rates, which are still very competitive compared to a similar range of hotels
in the region.
The furniture for 23 Love Lane, Penang, for example, comes from the 19th century Straits Settlement period.
Overseas visitors comprise 70% of guests in boutique heritage hotels, while the remainder are domestic travellers, he
said.
Macalister Mansion, which opened in 2012, attracts a fair mixture of domestic, Asian and European guests because of the
way the owners had restored the building, which was to preserve as much as possible the original features of the 100-year
old building, according to its general manager Coreen Yeap.
A lot of time was spent on restoring and preserving the original features of the building, which is named after Penangs
British Governor Colonel Norman Macalister.
The design process spanned an eight month period from February to September 2011, with its owners working
collaboratively with a Singapore-based interior decoration company, she said.
On advertising and promotion, Fong said generally boutique heritage hotels spend little on such programmes. The
boutique heritage hotels in Penang are known through word of mouth and social media.
There are also foreign writers who come to Penang in search of such heritage commercial projects to report in tourism
and lifestyle magazines, he added.

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