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VOL. 35 | NO. 3 | Friday, January 21, 2011

Boutique hotels find a home in Nashville

By Joe Morris

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The mint on the pillow is only the beginning.

While Nashville has long had its share of well-known hotels, most have been of the major-chain variety.

But in recent years, smaller hotels offering a more personalized experience, and a raft of amenities and services, have begun to penetrate the Music City marketplace. And while some have found more success than others, all say that being a boutique operator here is a winning proposition.

Of course, “boutique” is in the eye of the beholder. Some see the niche as being the purview of bed-and-breakfast outfits, or establishments with fewer than 25 or even 50 rooms. Others look less at the number of rooms, and more about their size and what fills them. Then there’s the matter of an on-site restaurant or bar that sets the place apart, or how “green” it is, and the list goes on and on.

Nashville’s boutique operators are no different, and all say there’s plenty of room for everyone even in a down economy.

At the Hutton Hotel, a 247-room property that opened on West End near downtown in early 2009, the push has been to showcase its high-profile clientele as well as amenity-packed suites and eco-friendly décor.

“We look at ourselves as being more of a luxury independent,” says Steven Andre, general manager. “A lot of bigger hotels are saying they are boutique now, and so it really comes down to what your definition of quality is. We have some great green initiatives, a lot of new technology touch points, a very unique feel for people when they walk in.”

Andre says the Hutton will continue to push its packages to business travelers, tourists and locals this year, while also promoting its growing restaurant and bar presence.

“We are doing a lot of banquets and catering, wedding and social functions that are coming in,” he says. ‘We’re starting a wine-tasting program and other things so that we can fill in our calendar and stay competitive within the marketplace.”

At the Hotel Preston, being near the airport and out of the inner-city mix has allowed the property to develop its own following, says Dina Nishioka, public relations and branding director for Provenance Hotels, which renovated and reopened the 196-room property in 2003.

“Our company specializes in boutique hotels, doing something different,” Nishioka says. “Back when we opened the Preston there were very few boutique properties in the market, and so we came in. We think we can provide a personalized and unique experience.”

The Preston’s perks include everything from a pillow-selection menu to books on faith and spirituality for nighttime reading. The hotel also works with local artists and galleries on rotating exhibits, thus plugging a little more into the community.

“We do a great business with groups for meeting spaces, and also have a lot of travelers thanks to our location,” Nishioka says. “The property is in very good shape, and we’re looking to continue growing our market share.”

Hotelier Mark Lineberry was so high on the downtown area that he and Wesley Hotels & Resorts, where he is executive vice president, began work a few years back on not one, but two, Hotel Indigo properties.

The first, a 140-room property on West End near Music Row, opened in late 2007, while the 100-room downtown property opened on Union Street in the converted, and now conjoined, American Trust and Nashville Trust building in March 2010.

And while 315 Union Street Holdings LLC, which owns the downtown property, and Union Street Plaza Operations LLC, which owns the hotel business itself, have both filed Chapter 11 bankruptcy actions in an effort to restructure a $17.5 million loan on the property – not to mention a separate lawsuit by Lineberry against the ownership group that was recently dismissed by the bankruptcy trustee – he insists that both Indigos are doing well and will continue to operate and grow their reputations.

Lineberry also points out that the properties enjoy some cost savings on front- and back-office expenses as well thanks to being a part of the InterContinental hotels family.

“Even though the two properties, and the two markets they serve, are very distinct, we have been able to build some synergies,” Lineberry says. “Our marketing is for both, and the salespeople represent them both.”

As far as the hotels themselves go, each reflects the building that houses it. Downtown’s buildings are upwards of 100 years old, and have maintained the grand lobby spaces, marble floors and other accoutrements. The West End building went up in the 1950s, and so has been rehabbed with a more contemporary, sleek feel.

“They both are unique, and they both are doing good business,” Lineberry says. “Last year was an improvement over 2009, and so we see growth in the market. We don’t think we could put in a third Indigo here, but we’re doing well in terms of building brand awareness with the properties that we have, especially as the new convention center opens.”

All this would indicate that the boutique concept was new to Nashville, but not so. Before the newer players entered the market, there were a couple of stalwarts on the scene.

The Hermitage Hotel, a storied downtown landmark since 1910, reopened in 2003 after a major renovation and upgrade and continues to garner such accolades as a five-star rating from Forbes Hotel Guide, which it now has received for five years running.

The 340-room Loews Vanderbilt Hotel has long courted and kept high-profile guests and events with success.

“I think boutique hotels have a space within any given market, and here in Nashville that space is pretty broad,” said Tom Negri, managing director. “We all benefit from the market, which has a unique location, great airport, good weather and a nice, diverse mix of things to see and do.

“As for Loews, we’re not a cookie-cutter hotel, and our guests know that they’re going to get great service in a pleasant atmosphere. They also want an experience that makes them feel really at home, and that’s what we deliver.”

The higher-end, niche hotels – and their success – reflect on a larger hotel and lodging market that, while not recession proof, has certainly weathered recent economic storms better than many other parts of the country, notes Greg Adkins, chief executive officer of the Tennessee Hospitality Association.

“However you define the boutiques, they are doing well here,” Adkins says. “Many of these hotels were renovated or built, or opened, during the downturn, and they are still operating. This shows that Nashville is a strong market for the guest and hotel industry, because a lot of people come here not just for business, but also for tourism. And they draw from both of those groups.”

Success breeds success – and competition. While the boutique market may be topping out, Adkins says the market’s strength may lead to larger operators looking to plant their flag here soon. The Omni Hotel, which will be attached to the new Music City Center, is a good case in point.

“We think that those 800 rooms will be filled, and that it will spur some hotel growth in and around downtown,” Adkins says. “And as the economy improves, we think a lot of entrepreneurs will want to build hotels of different sizes to cater to the new convention center and growing downtown business community.”

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