Monday, April 4, 2011

Defending the Stars

Pete Blackwell has a lot on his plate at the moment. The charismatic travel industry figurehead is the GM of AA Tourism in New Zealand and Club Tourism Publishing that is a partnership between AA Tourism and Australia’s AAA Tourism.

We are interested to follow how Pete will be steering the revamped accommodation star rating system in Australia by AAA Tourism that will come into effect on 1 July 2011. Could some of the changes occurring across the ditch have implications for New Zealand's accommodation rating system currently managed by Qualmark?

As the economy tanks, the validity of high maintenance accommodation star rating schemes are being closely scrutinised and are under threat from online guest reviews and self-rating mechanisms. We note that the British government looks likely to scrap their national hotel star rating system while back home, Qualmark NZ have been instructed to pay their own way and have been given substantial funding cuts.

Guest review based systems are becoming 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 is ironic that AA New Zealand with a 40 percent shareholding in Qualmark have embarked upon their own guest review program. 

Jasons Travel Media have developed their own guest review system, Paid, Stayed and Raved and in a provocative move will be allowing their advertisers to self-rate themselves online later this year. We predict that this will provoke some positive debate on market driven rating systems, particularly within the motel industry.

In difficult economic times, AAA Tourism's new star rating system in Australia is being overhauled to focus on three core categories of cleanliness, facilities and quality/ condition. Minimum requirements will be dumped and replaced with a percentage score for each of the three core areas that will be weighted towards the final star rating.

Like any new system there will be collateral damage inflicted upon some accommodation providers  and it will be interesting how this will be managed.

We recently virtually attended the No Vacancy hospitality technology conference in Sydney. From live blog updates and Twitter feeds, Pete's address to the conference introducing AAA's new star rating system to travel industry attendees was interesting to follow.

The address was understandably somewhat biased towards the concept and validity of a recognised national assessment scheme that relies upon regular physical assessment from trained assessors. With guest speakers from review sites, TripAdvisor and in attendance, the validity of guest reviews were politely played down.

From our perspective, here's a few interesting snippets from Pete's address: 
  • Research has revealed that cleanliness was by far the top requirement with consumers, followed by room facilities and their quality.
  • Non-business consumers tend to stay at 3.5 to 4 star rated properties. Business consumers that "spend others money" will stay at 4 - 5 star rated properties.
  • Pictures are the most influential thing when making a booking and these must be up to date. Followed by star rating.
  • Up to 80% of people thought star ratings were useful and were consciously or unconsciously using them as the third step after choosing a location and researching hotels, to identify where they did not want to stay.
  • Consumers are happy to accept a 3 star rating at face value, however a property with a 5 star rating is more likely to be accepted if validated by a recognised star rating system.
  • To achieve 5 stars in the new rating scheme, properties have to get 93% in all categories.
  • One star does not mean dirty.
  • 57 percent of consumers want guest reviews in a star rating system. Currently less than 21% of guests are doing reviews.
  • Consumer ratings will be introduced over time. Technology is an issue and guests need to be verified that they have stayed at the accommodation that they review. Guest reviews must have an added value to the accommodation industry. To establish a guest review system will be big investment  for AAA.
  • AA New Zealand are monitoring the effectiveness of their Been There traveller reviews that have been introduced as an added value for their Kiwi online accommodation property subscribers.
  • There is a risk that by putting everyone down a star, properties will all self rate and sidestep AAA.
  • It is important for New Zealand and Australia to align ratings, more so than rest of the world.
  • There will be some realignment of star ratings. We will see some 4's go up, and some 5's go down. This will not happen right away, some have had warnings for a long time. AAA will be giving 6 - 12 months to fix up issues.  
After reading Fossick founder Genevieve Atkinson's informative blog comments, one important point I missed was the question raised about the price of getting rated. Peter Blackwell was made to repeat the answer twice to a largely hotel audience… on average between AUD$300 - 350 dollars! 

There seems to be a large disparity with the cost of being assessed between NZ and Australia!

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