Hip, smaller hotels find their niche

Hip boutique hotels, an established concept in western countries, are beginning to make a mark in Hong Kong as more companies see profits in the trend.

These smaller stylish hotels try to stand out in the crowd with unique architectural style, classy interior designs or a decorative theme. They often feature trendy bars and designer rooms with the emphasis on personalised service.

With the great success of Jia in Causeway Bay, designed by Philippe Starck, more Hong Kong companies are interested in taking a slice of the lucrative hotel market.

Far East Consortium International is one of the keenest players, opening its third hip hotel since the beginning of 2005. National Electronics Holdings is also building a boutique hotel in Sheung Wan.

Michael Li Hon-shing, executive director of the Federation of Hong Kong Hotel Owners, said more and more affluent professionals wanted something a bit different when travelling. 'They are looking for something special and hotels of artistic design, which conventional hotels may not be able to offer. These travellers would rather stay at their preferred boutique hotels which are small in scale with limited facilities.'

Mr Li said such hotels often had unique furniture and decorations - including reproduction antiques and oil paintings - which created a pleasant environment to cater for US and European travellers, their primary target customers.

Central and Sheung Wan - with their old, compact streets and numerous pubs and eateries in neighbouring Lan Kwai Fong and SoHo - are among the most popular locations for boutique hotels.

'Boutique hotels are mostly in the size of 100 to 200 rooms, and quite often, they are converted from existing buildings. They appeal to customers and are relatively simple to manage because of their size. The running cost is not going to be substantial,' he said.

David Chiu Tat-cheong, deputy chairman of the Far East Consortium, said there was a only small number of boutique hotels in Hong Kong compared to the US and other western countries.

'People no longer put hotel brand names on the top of their considerations, and it is often hotels of individual character that appeal to them,' Mr Chiu said.

'A good location is of paramount importance. But it doesn't mean we should get into the very heart of Central.

'For hip hotels, it is often better to be tucked away in a quiet corner of a small street near the city's busy districts.

'Hip hotels are very suitable for Hong Kong where land is in scarce supply and land values are expensive. The return on investment is quite attractive for such hotel developments.'

The group opened the Cosmo Hotel in Causeway Bay early last year, followed by The Central Park Hotel in Hollywood Road in Sheung Wan - both were converted from old commercial buildings. The latest project is the newly developed Lan Kwai Fong Hotel at Kau U Fong, a few minutes from SoHo and the Central shopping district.

Francois Vanci, general manager of the Lan Kwai Fong Hotel and The Central Park Hotel, said boutique hotels did not have to be extravagant to be elegant.

The 163 rooms and suites at the Lan Kwai Fong Hotel are decorated in an oriental style using reproduction Asian antiques and art. The Central Park Hotel's 142 rooms are contemporary and provide a feeling of a home from home.

Boutique hotels form a core part of the Far East Consortium's hotel portfolio in Hong Kong, which includes six existing projects, with about 1,300 rooms, and three more hotels, with about 840 rooms under development.

Mr Chiu said the opportunity existed for similar hotels in Shanghai and Beijing. 'In particular, old buildings in Shanghai have good potential to be converted into such hotels,' he said.

Meanwhile, with many hotel operators raising rates in the current tourism upswing, obtaining a cheap room calls for a bit of initiative.

But doing so may be easier than many wary travellers think.

Hotels offer discounted rates for guests booking on the internet and have promotional packages during low-season periods. But booking through travel agencies appears to be the best way to score a bargain.

Mr Li said room rates vary substantially in high and low seasons. Travel agencies provide a host of choices 'like a supermarket' for people to compare and select. 'With agencies' lower rates, there is no need for people to shop around from place to place,' Mr Li said.

Daniel Chan Kin-pang, deputy general manager of Hong Thai Travel Services, said hotels allotted a portion of rooms at discounted 'contract rates' to travel agencies in order to extend their distribution network .

'Travellers walking into a hotel and asking for a room will certainly pay a higher rate.

'By booking in advance through agencies, it's easy for people to get a room at prices 20 per cent or more lower than the walk-in rates,' he said.

'The discounts will be bigger during low season, which is particularly obvious for three-star or lower-end hotels.'

Some in-bound agencies will even commit themselves to renting a certain number of rooms at a discounted rate for a specific period to ensure accommodation supply. That means they have to bear the agreed costs even if they have no guests.

'In the case of fewer guests than expected, these agencies may release the available rooms at deeper discounts at the last minute to reduce losses - which can mean real bargains for travellers,' Mr Chan said.