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HOBOKEN, N.J. — Visiting the suburbs no longer has to mean staying in a cookie-cutter hotel.
Suburbs around the USA's biggest cities are starting to get their first wave of boutique hotels, as more travelers seek hotels with personality closer to outlying areas that have transformed into business and social hubs.
CHART: Lowest rates at some stylish hotels opening in the suburbs
"People are looking for something different. They want something design-driven, that looks like where they live," says John Russell, CEO of Nylo, a new independent chain of stylish hotels that is basing its strategy on building hotels in suburbs (Plano, Texas; Warwick, R.I.) instead of big cities, at least initially. The latest wave of boutique-style hotels tends to offer modern furnishings, the latest high-tech offerings such as flat-screen TVs and MP3 plugs, a thoughtful collection of art and trendy gathering spots such as the "living rooms" pioneered by the W chain. "From now on, it's going to be brands with style," predicts Matt Ouimet, president of Starwood's (HOT) hotel group, which includes W, Aloft, Westin and Sheraton. "The suburbs have earned that right." One of the most-watched examples is the 225-room W under construction in Hoboken, N.J., just across from Manhattan on the Hudson River. The project was conceived in 2001 when brothers Michael and David Barry of Applied Development proposed a W hotel and condominium tower on the docks where On the Waterfront was filmed decades earlier. Hoboken was then in the early stage of transition, with old factories getting converted into million-dollar lofts, and new retail, restaurant and office buildings showing up amid neighborhood pizzerias and Irish pubs. The Barry brothers wanted to make a statement about Hoboken's transformation, so they went after a hotel brand that would be unexpected for the town. Today, the sleek, metal-and-glass-skinned, 26-story W tower is a bustling construction site. When doors open in December, the hotel will feature spectacular panoramas of the Manhattan skyline, an indoor/outdoor terrace bar with fireplaces and the W chain's only ballroom for 500 to capture local weddings and corporate parties. The hotel's potential to fill rooms looks stronger than initially thought because Manhattan's five W's often sell out. Hoboken, in fact, is looking like such a smart move that Ross Klein, W's brand chief, says he's eyeing other suburbs such as Oak Brook, Ill., La Jolla and Huntington Beach, Calif., and the Coconut Grove area in Miami. "The W has shown that there is a market for more hip hotels," says Jan Freitag of industry tracker Smith Travel Research. Kimpton, which started in 1981 and is the largest independent chain of boutique hotels, recently opened Palomar in Arlington, Va. — its third hotel in the Northern Virginia suburbs of Washington, D.C., where it has seven hotels. Kimpton's now eyeing farther-out suburbs such as Chantilly, Va., about 25 miles outside the city, says Kimpton CEO Mike Depatie. Nine of Kimpton's 42 existing hotels are in suburbs, he says. Hotel Indigo, InterContinental's 4-year-old boutique brand, recently opened in Newton, Mass., near Boston, and Fishers, Ind., near Indianapolis. Half of Hotel Indigo's existing 17 hotels and half of its 62 future hotels have suburban addresses, typically near upscale shopping, business and residential centers, says Jim Anhut of InterContinental. He expects Indigo to flourish partly because many people want hip design but don't want to give up InterContinental loyalty points by staying in independent hotels. The main drivers pushing design-driven hotels outside cities: •Travelers bored with old hotels. Business travelers who travel to suburbs want more unique choices, Nylo's Russell says. Younger employees who travel frequently for big consulting and accounting firms are especially hungry for new choices, Starwood's Ouimet says. Because companies ask for choices in markets where W's don't make sense, Starwood's rolling out a midprice version called Aloft, going up in places such as Rancho Cucamonga, about 30 miles east of Los Angeles. The first will open later this year in Lexington, Mass., about 10 miles outside of Boston. •Suburbs are thriving. More business is being done in the suburbs, and mass retailers such as Ikea, Pottery Barn and Target helped pave the way for "democratization of design," Anhut says. "Ten years ago, the suburbs might not have been ready." •Urban land's getting too costly. It's cheaper to develop in the suburbs, where land and construction cost less, says Robert Mandelbaum of Atlanta-based PKF Consulting. For hoteliers, that means that "If you want to grow the brand, you have to look beyond the city center," he says. Also, there's less competition, says Mike Mueller, a Nylo founder. "We really like the suburbs because they've been ignored by the boutique brands." Finding these hotels will still require some digging. That's because they're going up mainly in the close-in suburbs of the USA's 25 biggest cities, where they can expect to fetch the highest rates, Mandelbaum says. And most of the hotels rising in the suburbs remain limited-service brands without restaurants, such as Holiday Inn Express, Fairfield Inn, Hampton Inn and La Quinta, according to industry tracker Smith Travel Research. What travelers will pay for the rooms will vary by market and by chain. Rooms at Aloft, Nylo and Hotel Indigo cost at least $140 a night. Travelers won't necessarily see a discount relative to what they'd pay in the nearest big city. Kimpton's Alexandria, Va., hotels fetch about the same rate — about $250 a night — as its downtown Washington hotels, Depatie says. In some cases, travelers might get a deal. The developers of Hoboken's W, for instance, expect to fetch an average of about $280 a night (although the hotel is not yet accepting bookings). The average rate at W's Manhattan hotels last year was $405.
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