Most segments within the boutique hotel industry finished 2024 with higher average rates than same-class US hotels — with some, including luxury independent boutiques, by a large margin, according to The Boutique Hotel Report 2025 from The Highland Group, a consultancy. The majority of boutique hotel segments have also experienced similar annual demand and supply growth over the past seven years, indicating healthy absorption and stability, the report said.

The report also found that the boutique hotel concept generated more revenue per available room than many comparable US hotels in 2024. Boutique hotels continue to open in differing price points from upper midscale to luxury class.

Measured by opening date, indie boutiques, which have a much larger base of open hotels, increased in supply at a compound annual average of 1% from 2019 through 2024. Soft brand collections follow an annual increase over this period of 5%. At 9% annually, lifestyle hotels have increased rooms at the fastest pace over the past five years.

The boutique hotel category, according to the report, covers a very wide range of lodging product. It includes indie boutique, lifestyle hotels and soft brand collections — with price differentials within those segments. Hotels in all three groups have some sort of food and beverage service available.

Kim Bardoul, partner at The Highland Group, said that boutiques “consistently perform well with solid occupancies and, in many cases, a premium in rate over traditional hotel types.” Overall, she said, “boutique hotels are positioned very well for future growth.”

Image: The Colony Hotel Bali