Boutique hotels tap growing interest

Around 10 million yuan (1.1 million euros) was spent on the interior design and decoration, including paintings.

The interior design work was done by award winning interior designers Jehanne de Biolley and Harrison Liu, known for bringing together the Eastern and Western styles.

The hotelier is expecting to make a return on her investment within six years.

"So far the room booking rate is nearly 60 percent and we have broken even this year," she says.

The hotel is targeted at China's wealthy, foreign tourists and even famous film stars and artists.

The rate for a suite ranges from 1,580 to 2,180 yuan a night (170 to 240 euros) for two people, higher than the average five-star hotel in Beijing.

"People like to stay here because it is a more intimate environment where they can relax. They like the personal touch. Sometimes we hire musicians to play erhu, a traditional Chinese instrument, while they are taking tea in the courtyard."

Julie Dai, the Beijing office director of Horwath HTL, a global hotel, tourism and leisure consulting firm, says that though boutique hotel owners find it difficult to charge rates higher than the top luxury hotels, it is essential to recoup the high costs of providing such services.

"One of the most important success factors of a boutique hotel is its size. In order to create an intimate and niche experience, an urban boutique hotel must be small with fewer than 100 guestrooms," she says.

"They would make more money if they were bigger but increasing the room count would devalue the experience and sense of exclusivity."

In most cases, the motivation of developing a boutique hotel for an investor is more about a unique life experience rather than financial consciousness.