Is it a 24 hour kennel? If not, what do guests do when they have to pick up their pets from the kennels? Universal also has a kennel, but guests can then bring their pet back to their room.
As for stinky pet hotels, we have stayed at Universal numerous times (without dogs), but have yet to see a single animal doo doo anywhere on the grounds. Nor have we ever heard a dog bark or smelled a dog. The staff there keeps the hotels spotless. One time we were at the Portofino and I observed a person allowing their dog to doody on the plaza by the bay. They just kept walking without picking it up. It was not more than 2 minutes later that a Universal staff person came running out with pooperscooper and cleaned it up.
I think Universal also limits certain rooms to pet owners so that the allergy thing is not an issue.
I love going to Universal after our WDW fix is satiated and occasionally seeing the dogs in the lobby and walking around.