SIZE MATTERS, BUT SCARCITY MATTERS MORE
SIZE MATTERS, BUT SCARCITY MATTERS MORE Interesting analysis on fixed costs and profitability thresholds. I’d add a nuance from experience: I once saw a 179-room hotel (outside Eurozone) generating €4M revenue with poor EBITDA—despite the size advantage. Overly standardized, commoditized approach. Same potential owner investor was offered by EXUPERE a 42-key boutique hotel, same €4M revenue, but strong EBITDA. His reaction? “How can 40 rooms match 179?”
The answer: SCARCITY
Small hotels can offset structural disadvantages through distinctive positioning and premium pricing justified by exclusivity. When you create desirability, you transcend fixed-cost dilution logic.
Yes, size matters. But differentiation and perceived value matter more. Plus, location is never innocent.
Hotels under ~50 rooms are gems—the very ones major groups try to emulate as they diversify. Small can be beautiful—if rare and desirable.
#HospitalityInvestment #BoutiqueHotels #HotelProfitability #LuxuryHospitality EXUPERE
