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Is the Traditional Hotel Rating System Still Relevant?

In the time of traditional hotels ratings were the best and most important method for guests to evaluate and choose their hotel to stay at. Reputation also played a good part but the ratings system was overwhelmingly important both to the potential guests and the property operators. As years went by they were updated to reflect advances in comfort and technology, but generally speaking still adhered to the main conditions that included cleanliness, maintenance, standards of furniture, physical attributes, degree of comfort and luxury and of course service.

Today, with over 65,000 hotels of all categories in the USA, and with the number of hotels having doubled between 1990 and 2005 to over 54,000, the ratings system has taken a beating. The proliferation of hotels has been accompanied by a considerable increase in the types of hotel that have opened their doors. Along came boutique hotels that offered more personal service based on their size. Suite hotels were built to offer larger spaces to business and family traffic. B&B’s increased in numbers as extra revenue sources were tapped by families. Economy hotels were opened to offer lower rates, while older buildings were transformed into charming Inns. The larger brands tapped into the market with their lower category hotel brands to also compete for the lower income travellers. Just take a look at the proliferation of brands under one roof: Marriott offers 30 hotel brands across 110 countries, Hilton offers 14 brands that cater to ‘different lifestyles’ from extended stay, to suites and to affordable brands.

The increase in hotel numbers and rooms, coupled with the considerable increase in types and styles of hotels and the OTA’s has created fierce competition not only between the brands, but the independents struggling to thrive in a hostile environment.

In turn, all the competition led to improvements in the standard of the hotels, the offerings both in facilities and in room experience. This necessitated increased capital expenses and running costs. Yet while the standards ameliorated, the ADR and REVPAR oftentimes did not increase in parallel. Many independent property owners find themselves caught up in a race to keep up with the ‘Joneses’, the big brands that are continually improving and updating.

And that brings us back to the ratings system. Of course cleanliness, maintenance, service and facilities still matter, as does location. However, whereas there used to be a ‘uniform’ rating system that guided choice, today there is are a vast amount of ratings sites that potential guests can surf when looking for a great place to stay. Loyalty still plays a role, but is based more on programs than the old version of returning guests who know and love the property. Price factors in a lot more in today’s market, and travellers are more reliant on up to date feedback on potential properties from online comments on sites such as TripAdvisor and the booking sites which grade hotels according to stars based mainly on satisfaction.

So, while the old system of ratings still carries on, it is in the ‘background’ now, and plays a very basic role in informing of basic parameters of properties, but not what guests think, and in ‘real time’.

We are led to believe that it is common practice for potential guests to survey hotels before they come, and may look at up to twelve sites to get feedback before reserving a room. Having ascertained the ‘basic’ standard of the hotel, they then delve into the satisfaction factors of past guests in an effort to ensure their stay will be satisfactory and beyond.

But with the rise of the millennial generation as the largest consumer group in the world today, ratings of both sorts may not be enough to transform them into either guests or that ‘ultra-prize’, a returning guest. Sure, they look for everything noted above, but they are also looking for more value to their stay, and hotels are taking due note.

Millennials look for hotels that are involved in the community and that are part of a town’s social fabric. They are looking for a diverse staff that is cared for and happy. They are environmentally aware and look for ‘green’ hotels that have energy saving systems and are environment friendly. They like to see worthy causes in communities supported by hotels, support for local businesses, and food that is sourced locally and fresh.

These things are not available on ratings sites, and of course are not included in the basic ratings. But they are becoming more and more important in the choices made for hotels to stay at. However, many hotels, led by the big brands are now promoting aspects of these new sought values in their marketing efforts to capture the millennials, and it is working.

So where does that leave the traditional ratings system? It will slowly fade away, replaced by the online real-time ratings systems coupled with the new values being sought. Of course, cleanliness, maintenance, service, physical attributes and facilities still matter greatly, but today there is so much more to attracting clientele and trying to keep ahead of the game.

 

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