Tuesday, February 1, 2011

Hotel star rating system to be scrapped

We were interested to read that the British government looks likely to scrap their national hotel star rating system.  

British tourism minister, John Penrose has said: 
 "Travel websites, like TripAdvisor, could provide a more efficient service if this star rating system was done away with. People in the industry want people to use those kinds of websites more frequently. It is actually rather bizarre that the government is involved in rating hotels. Its odd, because there is no government rating scheme for things like cars or cornflakes, so why hotels?"
We find Penrose's rationale difficult to argue with and we suspect that the New Zealand government is thinking along the same lines.

In a review review of the New Zealand government’s tourism sector agencies in the middle of last year, we were pleased to see the report challenge the appropriateness of the government's 60 percent ownership and ongoing funding of tourism quality rating agency, Qualmark NZ Ltd.

The review supported Qualmark's development of a 2-3 year plan for achieving financial sustainability and suggested that a sell-off be considered when this has been achieved.

In response, Qualmark announced Major Changes in their Business, late last year. From this announcement, we can see substantial cuts in costs, however services will be reduced, sectors will cross-subsidise fees, new fees will be gradually introduced for the enviro-awards  and there is no obvious plan to grow or maintain the market. We also sense the Qualmark have an entrenched desire to police instead of getting to understand the physiology of their client base and connecting with them.

We suggest that the inevitable is not put off any further and planning should be commenced with urgency to cut this organisation loose.

As an indication of ongoing government financial support required to keep Qualmark afloat, taxpayers subsidsed $1.1 million in each of the years ending June 2008 and 2009 - we don't see this trend changing. The review recommended to consider selling Qualmark to either the private sector or the Tourism Industry Association. We reckon that a sale should be carried through and timed soon after the Nats return to office towards the end of this year.

While it will be sad to see Qualmark disbanded in its current form, time has moved on and customer review based systems are destined to be increasingly more relevant as a means for the travelling public to compare options and for accommodation providers to benchmark their performance in real-time.

It’s clear that consumer habits are changing and it's somewhat ironic that the AA with a 40 percent shareholding in Qualmark have recognised this by embarking upon their own traveller review program. 

Are accommodation providers willing to be weaned off a subsidised centralist quality control organisation and are they ready to embrace a quality system based on online guest reviews? 

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