Mr. Rajagopal

Sales & Marketing

How Do Accommodation Providers View Grading Systems?

By Venkat Rajagopal, Professor, Pacific International Hotel Management School

In a highly competitive hospitality and tourism market, consumers are becoming more selective and demanding while choosing accommodation and its products. Under these circumstances the consumer relies on grading of the establishment to make a right choice. While the star system of grading is recognised universally, the system is not administered consistently at an international level. This means there is inconsistency in interpreting what grading means in different countries. A lodge could be graded as a luxurious accommodation in Africa and could be the opposite in India. Unfortunately there is yet to be one international body which is common for grading all the accommodations in the world so that there is no common reliable standard.

The hospitality industry provides different kinds of accommodation to suit different segments of customers, commencing from 5 star deluxe Maharajah service to backpackers accommodation. The classification or grading of different kinds of accommodation is very difficult as they can mean different things to different customers coming from different locations. The accommodation is accompanied by a variety of products such as food and beverage, 24 hour room service, swimming pool, recreational activities, shopping arcade, internet etc. etc. The competition to sell these products is so high because the service provider is competing in a matured market where the consumer is price and quality conscious. Under these circumstances a customer relies on grading of the establishment.

How does the customer view grading?

In the USA the term inn hotel or motel style accommodation is generally operated by a multi chain eg Holiday Inns. At the same time in Britain “inn” means public type accommodation offering bed and breakfast. A lodge in India means a cheap accommodation, usually haunted by men alone like for various nefarious activities (when drinking, horseracing, prostitution) are considered vices. On the other hand a Lodge in Kenya means a luxury accommodation perhaps rooms in the hotel, rooms in the club, accompanied by preferably 18 hole international golf course. A five star hotel in India could literally mean an accommodation in a palace in the midst of a lake where as a five star accommodation in New Zealand could simply mean a boutique hotel at National park closer to skiing enthusiasts. A guest coming to New Zealand from India ,if goes by the concept of a five star hotel , could be quite disappointed with the above accommodation since his expectation of a five star accommodation was in line with Maharajah service type. Similarly a New Zealander travelling to India to stay in a five star Palace hotel could be surprised to be met and greeted personally and given a best suite in the hotel for the five star price he or she has paid.

How will a customer be able to recognise what type of accommodation would suit him? He or she simply looks forward to the Grading agency which they feel would ensure consistency of quality. The most common grading system is “star” system where individual accommodation is rated depending upon the facilities, comforts and the level of service it provides.

There are many grading systems implementing different types of grades for different purposes. Some grading systems guarantees cleanliness and value for money while others offer higher standards of service and facilities. The main objective of a consumer looking at a grading system is that he or she is fully aware and informed when purchasing tourism related products especially accommodation. Grading systems could be administered by public or private organisations. While the Star system is recognised internationally it is not awarded by international standard, but rather at national standard, or at regional level. This means there are inconsistencies in interpreting what Star means in different countries. While some guests understand this inconsistency, not many do. Most of the guests would be loyal to brand names. Unfortunately there is no one international grading agency which is common for all the accommodation providers throughout the world, so that it becomes an internationally recognised and reliable standard.

How does the accommodation provider view grading?

The star rating classification system is the most common rating for hotels. Higher stars indicate more luxury. The AAA uses diamonds instead of stars to rate hotels and eating establishments. Some hoteliers claim themselves six and seven star ratings for their service and operations. By and large most of the grading bodies do not rate beyond five star and five star deluxe. Such tall claims by individual hotels as six or seven star ratings for their services and operations become meaningless and probably used only for the purpose of publicity. Since there is no statutory law which prohibits such hotels from claiming six or seven stars, the standard hotels which by convention go with grading agencies could feel misrepresented.

City Inn chief executive David Orr (city inn slams rating system) has cited that “The system is “crude and fudge” and he believes that the criteria to achieve star ratings is too easy. According to him a grading system which does not believe in the requirement for air-conditioning and acoustic standard requirements, does not make sense. (Hatch, D. 2006). I fully agree with Mr. David Orr because one of the five star hotels which I used to manage in East Africa, at CBD, had the banquet halls on the first level of the hotel, surrounded by guest rooms above and below. Whenever there was a late night function in the function rooms, it was a nightmare for the management because there was no set standard for the acoustic system, with the result the noise level was unbearable and there was constant complaints from the in-house guests. A Five star rating also means that the property is safe and secure. Unfortunately the crime rate in the locality was so high, no cars travelling late at night would stop at the traffic signal, even when the light was red, for security reasons. How can the grading agency convey this to the guests? The opinion of the guests invariably was that this property cannot be five star because of noise within the hotel and insecurity outside the hotel. The grading of a five star for this property was meaningless as far as guests were concerned, in spite of the hotel adhering to other standards of facilities including quality service. What the guest does not understand is that the grading agency can only grade the hotels for facilities and security, but cannot vouch for the lack of security prevailing within the city or the country.

Most of the grading agencies value facilities at the property, safety, security and location. But when it comes to service, the customer has a perception according the star or diamond rating of the property. However the grading agency does not have an inspector 24/7 to monitor the quality of service, the portion or the quality of food and beverages served to the customers. On these fronts, the management gets feed back only from the customers. The management adapts Servqual to measure service quality. The theory says there are five gaps in any service oriented organisation. While it is not possible to close all the gaps successfully, an attempt could be made to narrow these gaps. One of the gaps is the management’s perception of the guest satisfaction and the actual guest satisfaction. The service aspect is never dealt with at length by any grading agencies.

However one of the reasons for a four star hotel in New Zealand’s popular destination wanted to be assessed by Qualmark because the management felt that it is easy to be caught up in their own perceptions of what they are doing well or what needs to be improved. Hence they decided to purchase an independent assessment through Qualmark which they considered to be an independent credible quality assurance agency, in order to assess from the perspective of the customers.

It is well known that small hotel owners who find the license fees and terms and conditions of the grading agencies beyond their budget, and the multi chains who are internationally known for their brands, consider grading to be relatively unimportant. John Brenmann, chief Executive, Jurys Inns comments when the public started using hotels for the first time in the 1940s and 1950s a system to assure them of the facilities was essential not any more, because we are in the internet era which means guests can make smart choices independent of star ratings. (Hatch, D. 2006)(1).

In modern times with the advent of technology, consumers compare between various accommodation facilities and read guest reviews before taking a final decision, rather than to depend on ratings by the agencies. This is because, technology facilitates people to go online, read guest comments, do virtual tour of the properties. Hence it is better to ask your guests what is important from point of their view during their stay than to ask if they were as comfortable as graded by the agency.

Another example is of a two star hotel that joined Qualmark in June 1998. The owner’s opinion is that the Qualmark license has changed their image in the market from backpackers to a hotel. They reported feeling proud to be designated as a two star hotel. The benefits which they received from Qualmark has been in the form of both business planning and business improvement.

Backpacker accommodation consists of lodges, hostels and other types of accommodations to suit budget travellers. The new breed of backpacker is keen on quality for value. They want to erase from the minds of others that backpackers are good only for untidy young people with little or no money. They do not mind spending a little more money on accommodation but not a great deal of money. This means sooner or later, more backpacker accommodation will also choose to be graded.

References:

(1) Hatch, D. (2006).City Inn slams rating system. Travel weekly: The choice of Travel Professional (00494577), (1803), 28. Retrieved from Hospitality and Tourism complete database.

Venkatraman Rajagopal known as Venkat is currently a lecturer teaching hospitality and tourism management subjects at Pacific International Hotel Management School in New Plymouth, New Zealand. Mr. Rajagopal holds a degree in Commerce, a Masters in Business Administration and a Masters in International Hospitality Management. With more than 20 years experience in the hospitality industry, Mr. Rajagopal has worked his way up in all departments of the industry, holding senior management positions such as Director of Finance, Director of Food and Beverage and General Manager. Mr. Rajagopal can be contacted at 64 9 8350535 or venkatr@pihms.ac.nz Extended Bio...

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