New star wars: The confusing landscape of hotel ratings
 
New star wars: The confusing landscape of hotel ratings
15 NOVEMBER 2016 9:29 AM

With the proliferation of hotel rating systems online, their meaning has become lost. The solution might be a new system that dumps the stars and factors in guest experience.

Hotel ratings are frequently discussed casually in terms of “stars.” But lack of standardization, unrestrained guest feedback, and outdated methodologies are causing confusion as to the value of a star in a rating system.

Attempts have been made to unify the wide variety of rating schemes utilized by countries and organizations, yet hotel classification systems differ around the world. Frankly, if you ask 10 hospitality professionals to identify the parameters defining a four-star hotel, you’re likely to receive 10 different answers.

How ratings began
Decades before the internet, the world experienced the original web: the Dwight D. Eisenhower National System of Interstate and Defense Highways, commonly known as the Interstate Highway System. This system increased the ease of travel for Americans either for work or recreation, and propelled the demand for hotel rooms, which led to the creation of the national hotel chain.

Companies such as ExxonMobil’s Mobil Travel Guide (now Forbes Travel Guide) and the American Automobile Association (AAA) diamond rating then established a successful niche—physical inspections of hotel properties based upon rigid and meaningful criteria. These systems rated hotels to help consumers to select accommodations that met their needs and standards. The inspection process empowered these rating systems to classify product and amenities, as well as represent an indicator of quality.

Today, no matter how nice the hotel may be, or whether guests believe the hotel is top in its market, select-service hotels do not actually qualify for AAA’s four-diamond rating. Conversely, a poor quality full-service hotel that has telephones in guest bathrooms can possibly obtain a Forbes Travel Guide four-star rating.

Legacy hotel rating systems do not address important consumer measurements of quality assurance and guest feedback. Clearly, with today’s social media platforms, the driving force for hotel choice is often guests’ first-person accounts of their stays. Interestingly, within the parameters of these definitions, only 5.7% of the nearly 28,000 hotels approved by AAA actually achieve four-diamond status.

Today’s star methodology
Hotel ratings on online travel agency sites such as Expedia and Priceline are designed and constructed quite differently from their historic brethren, as they are intended to promote price and amenities rather than quality.

A four-diamond rating from AAA, for example, is defined as “refined, stylish with upscale physical attributes, extensive amenities and a high degree of hospitality, service and attention to detail.” Meanwhile, Expedia’s four-star rating suggests: “lobbies typically offer upscale decor and multiple conversational areas. Services often include a dedicated concierge, valet parking, turndown service by request and 24-hour room service. Guestrooms usually feature superior amenities such as large beds, additional seating, minibars, laptop-compatible safes, pillow-top mattresses, bathrobes and upscale bath products. Decorative features such as crown molding, bathroom artwork and granite or marble accents may appear. Resorts, and some hotels in Asia, customarily feature full-service spas, tennis courts, golf access, child-care services, and upgraded pools with poolside food servers.”

Forbes Travel Guide CEO Jerry Inzerillo agreed that the market is saturated with ratings, which leads to confusion about what to trust.

“Many systems lack criteria to support their rankings; our awards are based on a stringent set of stands developed and refined over six decades to be both geographically relevant and culturally sensitive,” he said.

But again, how do we decipher how the ratings are determined? It’s impossible to compare apples to apples when sifting through the opinions and recommendations of the various online systems.

Serving today’s travelers
The significance of user-generated-content and review sites such as TripAdvisor and Yelp cannot be underestimated. Travelers depend on other guests’ experiences shared via social media and travel sites, perhaps even more than they rely on the star ratings.

To help potential guests determine the quality of a hotel, TripAdvisor has developed a rating system which scores hotels from one to five, and is characterized by a dot filled circle. The rating is calculated using an algorithm based on the actual guest reviews and content. In addition to its complexity, this ranking system fails to account for property type and amenities.

Hotel ratings of the future
So, how do we fix the problem? I believe the term “stars” when considering hotel rankings, should either be stricken from our vocabulary or transformed into a well-defined rating system that combines both amenity level and actual guest experience. Do we need to know calculus? No, we need to know that people trust other consumers’ reviews. Combining actual guest experience with some kind of product definition would be most meaningful to the consumer.

Gary Isenberg serves as president of asset and property management services for LW Hospitality Advisors (LWHA). Isenberg’s more than 30 years of diversified hospitality experience in management, asset management and finance experience resulting in a demonstrable track record of creating and enhancing hotel property values and maximizing return for owners and investors. Previously, Isenberg served as chief operating officer for Field Hotel Associates (FHA), a privately held hotel development, ownership and management company. During his tenure with FHA, Isenberg led the development of several hotels from conceptualization through opening and responsibility for day to day management. Isenberg spearheaded multiple re-organization and repositioning initiatives and cultivated numerous revenue enhancement and cost containment programs. During 16 years with ITT Sheraton (predecessor of Starwood Hotels and Resorts Worldwide) Isenberg held a variety of positions, involving mergers and acquisitions, finance and operational disciplines. Isenberg earned a bachelor of science in business management with minors in corporate finance and information systems from Fairleigh Dickinson University. Isenberg can be reached at 212.300.6684 ext.108 and/or gary.isenberg@lwhadvisors.com

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