Design Hotels more profitable

Design hotels achieve higher room rates and occupancy figures than their traditional counterparts, according to new research. After studying the relative performance of Europe design hotels, Lukas Hochedlinger, a Vienna-based associate with Christie & Co, said that 70 per cent of the properties outperformed their non-design competitors with regard to occupancy and 81 per cent were able to charge higher average room rates. 

At the same time, 62 per cent of design hotel boast similar or lower operating and maintenance costs, compared with their non-design counterparts. 

"It appears that design hotels are able to achieve a better bottom-line performance than non-design hotels," said Hochedlinger, who performed the survey as part of a master’s thesis at Danube University in Austria. 



“However, potential limitations that were identified for some properties include a higher development risk - for example, higher development costs and longer timing - as well as a higher obsolescence risk in case the design is not timeless.” 

Hochedlinger warned that with the boutique hotel segment in Europe expected to grow over the next few years; new hotels in this niche would have to substantially differentiate themselves from competitors.

“This applies to interior and exterior design as well as to service design and other aspects,” he said. 

“One has to create a feel-good atmosphere that makes it comfortable and enjoyable for guests to stay. Many design hotels have made the mistake to purely focus on chic design and staff."


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