One of the trends in real estate I’m most interested in is the rise of experience-focused boutique resorts. These are typically 10 units or less, independently owned and managed, and provide a unique/hospitality-driven experience. These opportunities are made possible by booking platforms such as Airbnb and VRBO and supercharged by social media (Instagram/Tik-Tok/YouTube).

What gets me excited about these projects is the opportunity to create a differentiated product through design, creativity, and providing hospitality experiences, which serve as long-term competitive advantages. From an investment perspective, funds are flowing into this space, making these opportunities more than passion projects.

My parents own a property in South Florida which I oversee as a part-time luxury Airbnb. We’re in the process of transitioning from primarily a family vacation home to a business and I’ve been thinking about market positioning, delivering great experiences, building a brand, and ensuring long-term success.

In a market that includes traditional luxury hospitality brands like the Four Seasons and Ritz-Carlton as well as other luxury single-family homes, it’s difficult to stand out.  

However, due to their small size, boutique properties have several competitive advantages which can be captured via hospitality, design, and branding.

Hospitality

I recently read Will Guidara’s excellent book, Unreasonable Hospitality. Will and the team at Eleven Madison Park (one of the best fine dining restaurants in the world) were pioneers of unreasonable hospitality, permanently implementing team members whose sole role was delivering unforgettable experiences to diners.

The goal, as Will describes, is to “make people feel seen, make them feel welcomed, it’s to give them a sense of belonging. The food, the service, the design, they’re simply ingredients in the recipe of human connection. That is hospitality.”

The staff would research the guests ahead of their visit as well as pick up on queues during the meal. Based on the information gathered, it was the Dreamweaver’s job to execute Unreasonable Hospitality. Will includes some examples in his TED Talk, but I wanted to share a few below:

• A family from Spain was dining when snow started falling. It was the kids’ first time seeing snow, so when the meal was over the EMP team had a chauffeured SUV and brand new sleds ready to take the family to Central Park for some sledding.
• They transformed the private dining area into a beach complete with sand, a kiddie pool, and beach chairs for a couple whose flight to an island vacation was suddenly cancelled.

These are dramatic examples, but they infused Unreasonable Hospitality in smaller ways too. It was all part of EMP’s 95/5 rule – 95% of the time you manage the business down to the penny and the other 5% of the time you spend foolishly.

The essence of that 5% was based on intentionality, doing things thoughtfully, with a clear purpose and desired result. It’s the 5% that makes memories and inspires guests to rave about their experience.    

With small resorts, you can deliver unique and curated experiences, while deploying Unreasonable Hospitality practices that don’t need to scale. In hospitality, you’re not in the business of providing a place to stay. You’re in the business of providing memories.

Here are some examples we can execute at our property in Florida:  

We have a group staying for a family reunion, with family members flying in from all over the country. Instead of providing the traditional wine and pasties (nothing wrong with that), we can create little custom pieces of art made by a local artist that read “[family name] Reunion 2024”. Or we could have nice beach towels embroidered with their name, or hand-painted seashells, or offer to get a family photo framed for them after their visit etc.

We have a group of families visiting with kids ranging from 6 -16. We can arrange and pay for a few hour Seabob rental, providing a unique underwater adventure the kids will love. We could buy a bunch of Waboba beach toys the kids can use and take home with them.

We have a couple staying for a month, working remotely. We can arrange to have their favorite work snacks sent directly to the house weekly along with complimentary weekly cleaning.

If we have a couple coming that likes beer, we can fill up a keg with their favorite local brew. If we have a couple that is into fitness, we can have a few yoga mats and gym towels ready for them which they can keep.

You get it. The ideas are endless and require a little research and creativity. These little touches are what differentiate us from a typical resort hotel.

Design

Through hospitality we can help make memories, but through design we can deliver a completely unique experience the guest cannot get anywhere else.  

In Florida, we’re exploring some renovations catering to the target guests and include; adding a rooftop hot tub overlooking the ocean, converting the roof top bedroom to a fitness room equipped with peloton bike and a cold plunge, and creating a first floor speakeasy.

The property upgrades enable us to deliver an unmatched experience while also improving the marketability of the property (they show well in photos!).

Things get fun when you begin to build investment properties from scratch. This is where creativity kicks in and you can create something totally unique. Just check out the OMG section on Airbnb.

There are countless examples from luxury A-frames, to tree houses, to glamping tents, to caves, to invisible houses, to boat houses, to a lakefront home with a 75’ water slide. I could spend hours just perusing Airbnb, looking at photos.

Here are a few of my favorite:

Dunlap Hollow A-Frame & The Cave

Treehouse Cabins at Hocking Hills

The Waterslide

Design is an opportunity for small scale hospitality to differentiate from larger luxury resorts which generally play it safe and cater to a larger target market (ultra upscale is a different story).

Most people don’t want to stay in a treehouse or a cave or go flying down a 75’ waterslide into a lake. But for the people who do, there is no better option than the cave at Dunlap Hallow or the Treehouse Cabins at Hocking Hills.

Branding

If you own and operate a unique property such as the Cave, it’s easy to stand out from the competition. It doesn’t matter that it’s a single property and can only cater to one group at a time, because social media platforms augment things that are special.

Platforms like Airbnb/VRBO made these projects viable, but social media platforms such as Instagram and YouTube fanned the flames.

Social media today, especially visual platforms like Instagram and Tik-Tok, augment the posts that users like and engage with and they use this information to predict the content someone will find interesting. This has created winners and losers with great content getting millions of views while other posts languish.

Attention is the #1 asset and if you have a special property and can tap into the power of social media by creating great visual content, you can cultivate a large following which leads to outperformance via high occupancies and dairy rates.

Take the Pacific Bin, a shipping container home in the Pacific Northwest for example. The owner has 811k Instagram followers, 264k Tik-Tok followers, and 53k YouTube subscribers.

Devon (the creator) produces great videos, and his product has struck a chord in an environment where travelers are seeking unique experiences. His videos aren’t directly targeted toward the guests, but his broad reach has provided incredible exposure.

As a result, his calendar is nearly full with direct bookings.  

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At the end of the day, these properties need to be treated like investments. If you can control your basis, buy great sites, and cultivate a unique experience via the right mix of design and hospitality perfectly suited for your target guest, you’re going to kill it.