The objective of this report is to analyze the boutique hotel industry in Sri Lanka and the trends of the industry at present and the key issues likely to change the formation of the industry in the future. Tourism in Sri Lanka has been booming since the war came to an end also the recovery of the global recession also has led to an increase in the number of tourists visiting the country. Therefore the need to cater to the foreigners has led to the growth in the emerging Boutique Hotel Industry. Demand for these hotels is increasing also due to the increasing standards of living of the people in Sri Lanka and also the country being officially declared as “VISIT SRI LANKA” in the year 2011 is also an added advantage to the industry in the future expecting the demand to rise.
The analysis would be carried out using primary and secondary data collection methods including desk research and one to one interviews with experts in the industry and also customers.
The following tools would be used to understand the industry in depth. The SWOT analysis to understand the strengths, weaknesses, opportunities and threats to the industry, Micro and Macro environmental analysis (PEST and PESTEL), Porter’s five forces to comprehend the competitive analysis and scenario planning. The analysis of the industry would help to understand the demand and supply factors influencing the industry and also the forces that have an impact on the changes in the trends in the industry and also would help to understand the industry’s future implications.
Boutique Hotel Industry
A boutique hotel is one that is generally not chain-affiliated, features an intimate, stylish appearance and provides impeccable amenities. Also referred to as lifestyle or design hotels, the trend and related name began in the 1980s by Northern Americans. Although many boutique hotels are small, ranging from single digit rooms to less than 100, some in major cities have well over 100 rooms. The definition of boutique hotel is rather vague. Boutique hotels are sometimes hip and at other times historic. Some are unique in design, architecture or theme. However, a boutique hotel usually distinguishes itself in these areas: design, service and market segment. Some boutique hotels are themed; many attempt to be unique by either offering themed rooms or choosing an overall theme for the hotel. A boutique hotel can be equally appropriate for business, honeymoon, or vacation. The target market for most boutique hotels is the 25-55 age range, most within the middle to upper income level. For some boutique hotels, the target is the corporate traveler who will provide repeat business for the hotel, refer others and is one whose business is not based on a particular season.
CHARACTERISTICS OF THE INDUSTRY
There is no proper definition for the term Boutique Hotel, in other words, these establishments are, "unconventional, small, non traditional, chic, trendy, life style hotels with high level of personalization service and offers a unique experience." Location plays an important role in the hotels success. Boutique hotels require prime location. This fact explains why many boutique hotels are in locations such as New York's Manhattan area or in central London area. The following examples of Sri Lankan Boutique hotels will show how the whole concept of a boutique hotel is enhanced by its locations. Boutique Hotels – City Destinations: In city boutique hotels, location still is number one on guests' priority lists. Good locations for boutique hotels are not determined only by manner of convenience, but also by the "trendiness" and "chic-ness" of their respective neighbourhoods. Most existing city boutique hotels are located in glamorous cities such as New York, London, San Francisco, and Miami.Nevertheless, more and more organizations are aiming at less cosmopolitan cities that are known to have huge potential...
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