Sunday, March 31, 2013

Will Qualmark Soon Have Competition?

We see that our friends over at the Tourism Industry Blog have uploaded new post: Does New Zealand need another Qualmark?

Well right from the start, let's answer that question...probably NOT! Hasn't that boat already sailed?

We've been hearing rumours for some time about another company that may be considering getting into the quality benchmarking game in New Zealand.

From our position, deeply embedded in the motel industry, let us quickly dispel the myth that moteliers are desperately crying out for an alternative quality assurance organisation.

We predict that any future announcement of an alternative star-rating provider will be greeted by moteliers with the same groaning disinterest as if it were from a company planning to introduce another motel guidebook.

Yes, moteliers will bark and gnash their teeth whenever the subject of Qualmark is raised. They will drag out well worn knock-backs about inconsistencies, lack of consumer awareness and tall stories about losing stars because the assessor didn't appreciate their taste of wall-hangings.

From our knowledge of Kiwi motelier psychology, moteliers aren't so much about being anti-Qualmark per se. Any quality benchmarking system that awards stars based upon an annual site visit by a clip-board carrying assessor that have the gall to critique THEIR home and business will always be rigorously challenged.

In motel-world, no quality benchmarking system will ever be perfect. Moteliers are blighted by a mix of ego, ignorance and a vested interest that dictates "others" will never appreciate the work that goes-on behind the scenes of their motel.

Even if a "new" star rating company introduces an alternative scheme for a knock-down price, we believe that the few Kiwi moteliers that are still sold on the concept of star-rating are likely to respond with suspicion along with a surprising about-face devil-you-know loyalty to Qualmark.

In October this year, it will be 20-years since Qualmark was first incorporated by shareholders, The New Zealand Tourism Board and The New Zealand Automobile Association.

We've closely observed the changes that have occurred over those 20-years...especially more recently when Qualmark Chief Executive, Geoff Penrose stepped-down in 2010 after 5-years in the role.

When Geoff started his role with Qualmark, there were 1,300 Qualmark licensed businesses and to his credit this rapidly increased to a high of over 2,300 along with over 800 businesses that also displayed the enviro-award under his leadership.

Geoff's departure in 2010 signaled the beginning of a new era that "streamlined" Qualmark's operations and since then the customer base has been slowly depleting. We estimate Qualmark licensed businesses have dropped well below 2,000 with less than 300 businesses left displaying the ill-fated enviro-award.

While some may blame subsequent revolving management, poor communication and imposed budgetary restraints placed upon Qualmark for its declining popularity, we suspect that this was inevitable - Back in 2010 there were a few time bombs waiting to explode...

Qualmark remains addicted to corporate welfare. In spite of better-late-than-never efficiencies introduced, the New Zealand taxpayer continues to subsidise the benchmarking of tourism businesses by Qualmark. Past management have blindly avoided managing necessary efficiencies, growing core business and imposing orderly fee increases for fear of losing license holders.

While the numbers of licensed businesses in 2010 looked impressive, this was artificially propped up by Qualmark's expansion into numerous specialised tourism sectors that took away the focus from the core accommodation sectors that included  motels as the backbone.

Another major distraction from Qualmark's core business occurred with the introduction of an embedded compulsory, prescriptive environmental criteria into the accommodation quality benchmarking assessment system.

Qualmark took to their new enviro-accreditation role with the evangelism and intensity of an Amway sales conference. The long-term benefits and economic sustainability of benchmarking quality were ignored by Qualmark as the overstated benefits of environmental and socially responsible fads were enthusiastically thrust upon tourism businesses.

As the enviro criteria was embedded into the quality benchmarking system, it was immediately obvious to accommodation providers that in order to maintain their star ratings they had to play ball. With the promise of environmental and socially conscious guests beating a path to their reception counters, many accommodation businesses produced copious amounts of greenwash to game-the-system and protect their star ratings  

While Qualmark were politically pressured to spread thin resource into multiple new areas of operation, there didn't appear to be a strategic plan to sustain and keep the faith of their bewildered and distracted customer base.

In 2010, a hard core of Qualmark accommodation license holders belonged to a marketing chain and star-rating was a compulsory requirement. The trend for most accommodation chains to use Qualmark as a cost-effective, hands-off quality control mechanism looks likely to decline as consumers change behavior. Many accommodation chains have begun to question the validity of their members compulsion to join Qualmark and some have already started the process of exiting - Watch this space.

The continued dysfunction between Qualmark and the motel sector continues to be a growing problem. Not surprisingly, Qualmark have always struggled to interpret the dyslexic voice of the motel industry. While other accommodation sectors are able to communicate in a concise and orderly manner, inept motel industry representation has caused downstream issues. The most obvious was the recent changes to the assessment criteria that were bogged down for many years by unfocused, waffling consultation. By delaying the introduction of an updated assessment criteria, the motel industry has suddenly had to bear the brunt of changes that should have been slowly introduced incrementally.

As the tail of the Global Financial Crisis continues to hit home, many tourism business have started listening to their declining customer base and are discovering that they are not motivated by confusing layers of Qualmark badges that includes various versions of ferns, stars and multi-levels of meaningless enviro awards.

The world has moved on... savvy customers are moving online and are now making informed buying decisions based upon price, location, online availability listings and customer review sites such as TripAdvisor.

Not many customers seem to worry about what star rating an accommodation option may or may not have. While consumers continue to give lip-service to environmentalism and social responsibility, in reality they don't care if an accommodation option has a recycling scheme or a worm farm hidden behind the reception desk.

It would appear that anyone can award stars these days. A quick Google search will reveal all sorts of businesses and agencies that dish-out stars for such things as energy ratings, student housing, commercial transport operators, vehicle crash test ratings etc. On many OTAs, accommodation providers are able to self-rate and with consumers acting as a watchdog, this can work extremely well. The market is getting confused and crowded.

So it's a surprise that Geoff Penrose may have a second attempt to join the throng and have another crack at the star rating business in New Zealand by competing head-to-head with his past employers, Qualmark.

If this is true, we wish Geoff's private company World Class Tourism all the best and welcome him to the concept of running a private company in an open market. While some tourism businesses may bemoan the possibility of another choice, we prefer to stay upbeat - After all, private enterprise and competition can only lead to good outcomes. 

Hopefully Geoff's "unfinished business" is not relying upon the dubious demands of the motel industry for an alternative new star-rating service to make his new venture fly?

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