Boutique hotel is a term popularized to describe hotels which often contain luxury facilities of varying size in unique or intimate settings often with full-service accommodations.
Sometimes known as “designer hotels” or “lifestyle hotels”, boutique hotels began appearing in the 1980s in major cities like London, New York, and San Francisco. Typically boutique hotels are furnished in a themed, stylish and/or aspirational manner. Boutique hotels are often individual and focused on offering their services in a comfortable, intimate, and welcoming setting. Guest rooms and suites may be fitted with telephone and Wi-Fi Internet, air-conditioning, honesty bars and often cable/pay TV, but equally may have none of these, focusing on quiet and comfort rather than gadgetry. Guest services are often attended to by 24-hour hotel staff. Many boutique hotels have on-site dining facilities, and some offer bars and lounges that may also be open to the general public. Boutique hotels have typically been unique properties operated by individuals or companies with a small collection. (Source: Wikipedia)
There is some overlap between the concept of a small boutique hotel and a bed and breakfast.
Boutique hotel owners generally are willing to accept a slightly lower rate of return in exchange for the opportunity to develop and offer an iconic and interesting hotel concept which strongly reflects the personality of the owner. Expenses may be higher due to the more unique amenities, upscale furnishings and fixtures and higher levels of service required of guests who enjoy this sort of accommodation. Ability to tap into social media and create a buzz among the target clientele is a plus. Room rates may be higher than comparable non-boutique properties due to potential to attract more upscale guests. Creativity and a vision and desire to create a hotel with a strong statement are good indications of being well suited for a Boutique hotel property.