Garrett Hottle
PALM SPRINGS, Calif. (KESQ) The boutique hotel industry is on a growth streak, with new data showing rising demand in California and across the United States as travelers seek out smaller, more personalized stays.
Globally, the boutique hotel market was valued at $25 billion in 2023 and is projected to reach $40.3 billion by 2030, according to Grand View Research. In the U.S., the segment generated nearly $7 billion in 2024 and is expected to hit $10 billion by the end of the decade.
North America accounted for more than 40% of global boutique hotel revenue last year, driven by interest from millennial and Gen Z travelers looking for unique, immersive experiences, market researchers said.
California’s hospitality sector is a natural fit for the trend, with wine country getaways, art-forward desert retreats and a roster of Historic Hotels of America properties that attract visitors seeking local flavor.
In the Golden State, destinations like Palm Springs lead the pack with nearly 100 boutique hotels here alone, said Adam Gilbert, President of The Firm Brokerage.
“Palm Springs is known for its boutique hotels,” Gilbert explained. “We’ve really seen a growth in the boutique hospitality industry,” he explained. “You know, people want people to kind of move from the Airbnb, travel more to like a more catered boutique experience.”
Now, one of those experiences, the Exotic Dream Resort in Palm Springs, is on the market for $10.5 million. Gilbert, who is the listing agent for the resort, said the resort has deep ties in the Palm Springs area was previously the All World Resort, a very popular gay men’s resort where clothing was optional.
Today, Gilbert describes the Exotic Dream Resort is not only clothing-optional, but a swinger-lifestyle resort. He said it’s part of what makes Palm Springs market unique, offering investors both established clientele and properties with potential for reinvention.
Gilbert said properties run by smaller operators can sell for as low as $150,000 a room with opportunities to renovate and resell for double that price, or even more.
“If you’re able to get financials, if you’re able to fix it up, you can get close to 300 to 400,000 a room and sell it to a hospitality group or someone who wants to buy finished products,” he explained. “And so there’s been a huge, you know, influx of people buying these, you know, properties that need a little bit of love.”
Still, rising interest rates shifting consumer preferences means success depends on matching the right property to the right buyer.
“It has to make sense between seller and buyer,” Gilber said. “On what the buyer is buying it for, and what the seller is selling it for.”
The Exotic Dream Resort is still operating while it’s listed for sale. Meanwhile, we checked the long delayed Dream Hotel project here in Palm Springs.
The project, which was put on pause, due the pandemic and economic downturn since its inception in 2007. In Dec. 2024, News Channel 3 covered a groundbreaking ceremony celebrated by the hotel development team and city leaders ushering in reimagined plan for the project on the corner of Amado Road and Avenida Caballeros.
Developer Lori Kibby tells News Channel three the budget came in $80 million over, and they’ve been working to reduce costs, reconfiguring parts of the project and redoing drawings.
She also says the project is still moving forward with no change in ownership, and the dream brand remains part of Hyatt Hotel Group.
Boutique hotels have been outperforming traditional properties in key areas, including supply growth and revenue recovery, even as operators face higher costs for insurance, utilities and labor, according to industry analysts.
Industry experts say the model’s focus on design, storytelling and localized service gives boutique properties an edge in a crowded travel market.
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