Boutique hotels are no longer the quiet cousin in hospitality. In some markets, they're outperforming global chains.
While large hotel chains may feel “safe,” a growing number of investors are turning to boutique hotels, and for good reason.
Let’s break down the myths and look at what’s really happening in the hospitality space.
Without a global brand behind them, boutique hotels must be swimming in uncertainty, right?
Not quite. In fact, boutique hotels often outperform larger chains on two of the most important metrics in hospitality.
According to Brevitas:
“Boutique hotels often outperform in ADR and RevPAR compared to big hotel chains.”
And it’s not just about rates, it’s about resilience. Boutique hotels adjust faster to market trends and cater directly to evolving traveler preferences.
A report by Global Growth Insights supports this shift:
“The boutique hotel sector is attracting increasing investor interest due to shifting traveler preferences toward personalized, locally inspired, and sustainable hospitality experiences. Over 61% of private equity investors in hospitality now prefer boutique hotel portfolios for their higher per-room margins and customer loyalty.”
Think only global brands bring in international foot traffic? Think again.
In the age of Instagram and TikTok, many travelers seek out boutique hotels. A rooftop stay in Oaxaca, a desert villa in Saudi Arabia, or a jungle hideout in Bali often generates more online traction and bookings than a Marriott lobby ever would.
According to a Harris Poll conducted with Eventbrite:
“72% of millennials prefer to spend money on experiences rather than material things.”
Boutique hotels deliver the kind of curated, memorable experiences today’s travelers are looking for.
It’s easy to assume that big hotel chains dominate when it comes to guest loyalty. After all, they have massive rewards programs and global recognition.
But in reality, emotional loyalty often beats points-based loyalty. Boutique hotels foster deep connections with guests through personalized service, storytelling, and immersive local design. Guests remember how a place made them feel, not how many points they earned.
This shift is especially visible among younger travelers. As Forbes puts it:
“More travelers, especially Gen Z and millennials, are abandoning traditional points-based hotel loyalty programs in favor of unique experiences, flexible perks, and emotional connection.”
What’s more, boutique hotels often enjoy higher direct booking rates, which reduces dependency on OTAs and increases profitability.
In today’s evolving hospitality landscape, boutique hotels are proving to be smart, resilient, and emotionally resonant investments. Far from being a risky niche, they’re outperforming in key metrics. As traveler preferences shift, investor interest is following, and boutique hotels are leading the way.
