Wednesday, March 2, 2011

Qualmark's New Inspection By Suprise

While the British government are scrapping their national hotel star rating system we see that Qualmark NZ are forging forth with an attempt to revamp their offer with changes rolling out from 1 April this year.

In an elongated email to Qualmark licence holders, Qualmark GM Paula "Crusher" McCallum  has outlined her organisation's "New Direction."

For clarity, we will attempt to decipher and further explain the proposed changes.

Judging by the complex new pricing structure, we suspect that Qualmark has consulted with ex-Telecom CEO Theresa Gattung by adopting confusion as a theme when presenting their new matrix of fees. These include a ramped-up application fee, reduced base fee and variable fees based on number of units. Separate discounts can be deducted for both long service AND loyalty.

After crunching the numbers it would appear that motels with an existing Qualmark licence will be marginally better off as long as they elect not to apply for the separate Enviro Award (see below).

Unfortunately new Qualmark applications and those properties that wish to reapply after allowing their star grading to lapse will be penalised with what seems to us to be a rather harsh and disproportionate $650 application fee. At a time when they need them the most, Qualmark are hardly giving an incentive for new properties to join!

As is customary for a publicly funded organisation that has been given a substantial reduction in funding, valuable resource will be given to launching a new brand. We believe that Qualmark's new branding will be designed to give more prominence to the stars and this will be revealed on 1st May, 2011. It is unclear if there will be any assistance given to moteliers that will required to change lighting box panels and other roadside signage.

As we have closely followed with previous posts in this blog, it is pleasing that the politically-correct Enviro assessment will be extracted from the quality assurance criteria and offered as an optional stand alone assessment. Only token Enviro minimum standards will remain in the quality assurance assessment. Although a new, highly subsidised fee of $150 will be introduced for the Enviro Award, existing licence holders will be aware that this will push their overall Qualmark licence fee beyond what they paid last year.

While Qualmark claim that they are achieving a 5% growth of Enviro Award licence holder's month on month, it is interesting that only 1/3 of Qualmark licensed motels have bothered to apply for the Enviro Award since its evangelistic launch almost three years ago by Labour MP Damien O'Connor. After all this time road-testing the Enviro Award, most operators have come to the conclusion that Qualmark has oversold the benefits of grandstanding environmental and social credentials.

In spite of going through the motions and bolting Enviro illuminated panel boxes to their roadside signs, moteliers have soon realised that the promised mystical markets of environmental and socially conscious guests were not beating a path to their doorway.

An important aspect that Qualmark may have underestimated is that the only reason a large portion of moteliers entertained an Enviro Award was to either boost or maintain their quality star ratings. Now that the Enviro Award has been extracted and has to be paid for, we expect operators will ditch the required additional paperwork, save the $150 fee and walk away in droves. As a positive consequence, at least there will some environmental benefits with the slow removal of those insidious Enviro Award illuminated signs cluttering up the motel frontages.

While all of the above changes could be described as window dressing , the fundamental change for motel licence holders is how new assessments will be carried out. All licence holders will be required to complete a one-off "pre-assessment" that we assume will be a similar MO to the usual annual inspection by a Qualmark assessor. Once this is completed, the motelier will then be subjected to "unannounced visits" by Qualmark. Presumably these subsequent visits by ambush are supposed to be more cost effective for Qualmark and will include some form of inspection. It is unclear how frequent or how rigorous these inspections will be? 

We sense that Qualmark have adopted a dictatorial approach with an entrenched desire to police instead of getting to understand the psychology of their client base and connect with them. Sadly, Qualmark have underestimated the value that moteliers get from the existing regime of an orderly scheduled visit that allows time to plan and focus on an ongoing program of quality enhancements. In an industry where every day is a Monday motels will actively work towards and anticipate an annualised no-surprises inspection. This allows the motelier to schedule time to be part of a rigorous inspection process that encourages understanding and buy-in to the benefits of benchmarking quality.

While new assessments by surprise may appease a few gristly old blow-hard moteliers that spend a lot of time staring over the fence at their neighboring motel's imagined indiscretions, this will do little to enhance a trusting relationship between Qualmark and moteliers or improve quality in the motel industry.

We respectfully suggest that Qualmark are being poorly advised. There is a clear choice between the carrot and the stick and unfortunately Qualmark are going down the wrong path. They have been sucked in by industry fairy-tales of underhand moteliers rorting the system by making temporary enhancements to their properties in time for the annual assessment.

After the initial full property assessment we have doubts that an assessor's subsequent surprise visits to a property (that will presumably require a less rigorous inspection) will contribute to a sustainable and robust quality benchmarking model or return the substantial savings that Qualmark are required to make.    

We almost feel sorry for Qualmark's hapless assessors that will be expected to turn up at a random motel reception for a surprise inspection and then attempt to form an ongoing trusting relationship with the very motelier that they turn-up to visit without notice.

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