Business Times

Star classification in hotels

By Srilal Miththapala

There is much talk and publicity in the local newspapers of late, regarding six or seven star hotels that are to be constructed in Sri Lanka, riding on the back of the meteoric rise of tourism in Sri Lanka in post war scenario. Since there are certain misconceptions regarding the classification of such super luxury hotels, and star classification in general, it may be worth while to analyze and study the exact star classification criteria and what it means.

Hotel Classifications
Hotels are usually independently assessed, based heavily on the facilities provided, with a higher star rating indicating more luxury. Because the system is heavily weighted towards “hardware”, there is criticism that such criteria are somewhat complex and also disadvantageous to smaller hotels, whose quality of accommodation can meet a certain class, but lack of one particular item of hardware (such as an elevator or an air-conditioned Coffee Shop) can prevent it reaching a higher classification.
There are different classification systems, ranging from ‘A’ grade to ‘F’, Deluxe, Luxury, Superior, Tourist Class and Standard plus the more familiar and popular one star to five star rating. Classification systems of all countries are usually administered and implemented by the Government.

Classifications in different countries
The European Union Hotel Union is an organization which consists of 39 hotels Associations in 24 European countries, which has a standardized classification system. In South Africa it is the Tourist grading council of South Africa that administers the system. There is also the Nordic – Baltic system based on the Danish model, while in the USA the American Automobile Association (AAA) diamond rating system is popular.

In Britain the Automobile Association, (AA) has a classification system while other hotels are rated by the Royal Automobile Club (RAC). However, there has been so far no common international classification system that has been adopted, although there have been efforts to try and bring in some sort of unification.

Shortcomings in the system
All forms of classification schemes worldwide do lack any substantial qualitative review for ambience staff service and friendliness. While it is certainly very desirable to have this type of evaluation, the very fact that such aspects are subjective and hence does not lend itself for clear cut judgment by the different evaluators, makes it difficult to measure and standardize.

Usually star classifications do not have as great an impact on individual hotel rates, except provide some guidelines for pricing. (In Sri Lanka the free market system has been disrupted with the Government stepping in to legislate minimum pricing levels for Colombo hotels for specific star classifications. Since the classification system is based on a flawed evaluation system this is currently causing some concern among some tourism professionals- see below)

In general, by virtue of the fact that classification systems are based on quantitative factors, the number of stars gives the consumer an idea of what type of facilities are available in the hotel (such as sizes of bedrooms, specialty restaurants, spas, gyms etc). But a lower category hotel can develop a reputation for excellent food, and high quality customer service, which can earn it a premium price. Similarly a boutique hotel providing exclusive personalized services such as meals at the guests’ convenience, butler service, etc. can fetch much higher rates than their equivalent, standard hotel star rating. Well-known brand names can also help supersede the standard pricing indicated by star classifications (sometimes a branded hotel can demand a higher price than a similar non branded hotel of similar category).

Hotels Classification in Sri Lanka:

Outdated classifications system

In Sri Lanka also the classification system is heavily biased towards quantitative evaluation based on an original gazette notification. The criteria has two components, one set of criteria which is mandatory which all hotels of a particular star rating have to comply with, and another second group of optional criteria, against which a certain amount of marks have to be scored. This classification system follows the internationally accepted norm of being almost totally based on quantitative criteria, applicable to all types of hotels.

With the development of new forms of hotel facilities, and as the industry became more mature, many countries modified and upgraded their classification schemes, especially by bringing in different classification criteria for different categories of hotels, but unfortunately Sri Lanka continued with its outdated and archaic system.

There are many shortcomings in this form of classification which resulted in some Sri Lankan hotels being downgraded for lack of one or two specific mandatory items such as elevators, door locking systems etc. Complicated door locking systems with multiple access protocols (such as floor master keys, section master keys and grand master keys ) are essential in high rise buildings with a large number of rooms, but in 2-3 storied resort hotels this is not really essential. Another mandatory requirement in the classification system is the dimensions, as well as the specification of air conditioning for some areas, while no aspects for ambience and aesthetics is considered. The newer boutique hotels totally rely heavily on the ambience and design parameters for their competitive edge, with some having natural ventilation and ‘open plans’ to create the atmosphere. Such hotels, when evaluated against the existing criteria almost always fail to be properly classified.

Consider a small 20 roomed hotel proprietor- run, hotel on the beach. The rooms have everything that is needed, the bath rooms are well fitted out, there is cable TV, good hot water and air-conditioning that works well, the view from the room is spectacular and the food is excellent. Requests for something special outside the menu, will often be accommodated, with a smile. But the bottom line is that in all probability the hotel will be rated as a one or two star class hotel, unless it is drastically reconfigured. This is because being a small hotel there is no reception and the Bar Counter doubles up as a makeshift reception and you may have to climb up stairs to reach your room and maybe there is only one old fashioned key to the room. So despite this being quaint friendly and a well-equipped hotel, there is not a chance ever of it aspiring to a higher rating, even if they gold plate the bath rooms.

It is to prevent subjective influences and anomalies that such a stringent set of measurable criteria is designed to leave no room whatsoever for any qualitative measurements. This is perhaps understandable, given the fact that the hotel industry is dealing with people which results in a great element of variances and for example a hotel could have a spectacular spread in their buffet, earning accolades from some guests while others will complain that they want their food of their choice served to their table. Hence as all experienced hoteliers know it is virtually impossible to please all their guests.
Another shortcoming that is inherent in the current criteria is that it does not have any weightage given to environment and energy conservation initiatives that the hotel may have implemented. With long haul travel coming under more and more pressure to explore ways and means of mitigating the very high CO2 emissions that are associated with it, travelers are now beginning to search out hotels which are implementing such CO2 reduction initiatives. Hence most foreign hotel classification systems now include such initiatives (such as usage of alternate forms of energy, recycling and treating waste and water, etc.) in the criteria checklist.

New classification system for Sri Lanka
The Sri Lankan classification system is currently being re-designed with the active participation of the Tourist Hotels Association of Sri Lanka (THASL) to address some of the issues, and it is heartening to note that several aspects of environment and energy conservation has been included under the optional checklist for the first time. In this manner, hotels which are implementing such interventions can earn extra points towards reaching their respective star classification level. Equally there is weightage given to staff facilities such as specifications for dormitories, rest /changing rooms, lunch rooms, etc which was up until now, a totally neglected area.

Simultaneously new criteria for categorizing hotels as Guest Houses (A &B grade) -- Regular tourist hotels, Boutique villas and Heritage Homes has been formulated and each category will have its own set of criteria for assessment.

Currently classification is not compulsory in Sri Lanka, and due to the anomalies in the evaluation system, some 65% of all registered hotels are not classified, opting to allow the market to decide its competitive positioning and ‘rating’.

The new criteria is expected to come into force within the next month, and all hotels will thereafter have to be classified by state mandate. A preliminary inspection will be made (of all hotels both currently classified and non- classified) and any shortcomings will be highlighted, giving the respective hotel a time period to rectify them. If all criteria is thus met, the respective star classification will be conferred, while those failing to meet the criteria will be downgraded. Any hotel not classified will be relegated to the level of a ‘Guest House’.

Five stars and beyond
Are there six and seven star hotels? The simple answer is NO There is no internationally accepted criteria for rating a hotel above a five star level, although some super luxury hotels, offering a wide gamut of specialized up market products and services have taken on the mantle of calling them six/seven star hotels. What this really implies is that such hotels offer services and products well above the 5 star standards, where guests are pampered in luxurious comfort 24 hours of the day. In fact the new Sri Lankan hotel classification criteria which was in the ‘making’ for over 18 months, engaging a wide cross section of stakeholders, does not incorporate a rating above 5 stars.

So until some form of formalization of such super ratings take place, six and seven star hotels are only a ‘position’ established by hotel marketers.

Social networks and customer review sites
No analysis of hotel star ratings will be complete unless the burgeoning impact of social networks and peer - review web sites is taken into account. With the proliferation of the Internet to all corners of the world today, travel web sites are dime a dozen. Gone are the days when marketing gurus predicated that such intangible products as a holiday would be most difficult to sell on-line. With enhanced software platforms, which allow the consumer to see almost every aspect of the facilities and product offering available of the hotel he is thinking of booking, and virtual walk through tours also being sometimes available, makes such purchase decisions much more prevalent today.

More importantly the ability to almost instantly give feedback by uploading pictures via MMS, or mobile phone video-clips, down to more ‘basic’ written first hand reviews, is becoming the most vital aspect of travel and holiday marketing today. To hear and see what other fellow customers are saying about a particular tour or hotel is today the most powerful influencing factor in making a purchase decision. Since such feedback (both bouquets and brickbats) specifically ventures into subjective analysis, the ‘unchartered territory’ of the formal classification and rating systems, it has a much greater impact and acceptance by consumers. Here they are ‘seeing’ and ‘hearing’ for themselves, in real time, what fellow travellers like them, have actually felt during their stay in a hotel, and not depending on some rating that has been given by a Government agency to be worn like a badge.

In a recent survey in the UK, it was found that although many travellers still went into the travel agents office to check out pricing options and choices, almost 70% made the actual decision to buy, only after checking with a referral website. What ‘TripAdvisor’ has done to hotel and holiday travel marketing is mind boggling. Today 87% of TripAdvisor users reported that a review had a significant influence on their purchase. ( Ref Tourism Internet Marketing- Todd Lucier )

Of course there is some controversy about the extent of subjectivity in such web sites, but in the long run, consumers can see through the feedback comments and make their own judgment call about the veracity and type of feedback given.

Regardless of such issues, these social networking channels have already radically eroded into hotel marketing and positioning efforts, particularly having an impact on the rating of a hotel. Today formal star classifications have much less value in the prospective consumers eye, while the ‘rating’ and feedback found in such social networks is becoming much more important in the consumer purchase decision.

Future of Hotel classification and social media
The hospitality industry is still in the beginning stages of figuring out how to master the exciting potential of this emerging medium. But it is obvious that the consumers’ new-found control in communication about hotels has a direct impact on business. So, whatever the approach to dealing with consumer reviews, hoteliers have to be a part of this dialogue and embrace the new information. Failure to do so will result in the hotel becoming vulnerable and irrelevant.

But are hotels acknowledging this game-changing shift in communication? Are they attempting to regain control by participating in the dialogue, responding to negative reviews and taking action to drive improvement in the guest experience?

A recent survey conducted by Market Metrix and TripAdvisor focused on these questions. One sample included hotels registered on TripAdvisor as well as a mix of hotels from all industry segments. The consensus among these hotel managers is that review sites, such as TripAdvisor, are important to hotels. An impressive 90% of hotel managers think reviews are very important and nearly as many (81%) visit review sites at least weekly. Although some managers expressed concern about the authenticity of reviews, many described their dependence on these sites

Among all review sites, hotel managers believe that TripAdvisor has the biggest influence on their guests. After TripAdvisor, Expedia, and Travelocity (in that order) were also mentioned by hoteliers as important to their guests and how they make booking decisions.

Hence such peer-related review web site will play an increasingly important role in marketing of hotels in the future. At the same time, hotel star classification systems , although having a less impact on the hotels’ positioning, will still continue to be relevant as a base line reference.

(The writer is a senior tourism professional and wild life and elephant enthusiast who is the immediate Past- President of the Tourist Hotels Association of Sri Lanka. He is now attached to the Ceylon Chamber of Commerce as Project Director/Consultant of the EU funded Greening Sri Lanka Hotels project and serves on the National Hotel Classification Committee of the Sri Lanka Tourism Development Authority)

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