Originally created to set expectations for hotel experiences, the star rating system and industry classifications like luxury, upscale or budget are increasingly coming under pressure for lack of relevance to the needs of today’s traveler.
NB: This is an analysis by RJ Friedlander, founder and CEO of ReviewPro.
While intended to help travelers find the right hotel, these classification systems are more and more disconnected from how both individuals and business travelers evaluate hotels.
The lack of a universally accepted definition of what differentiates star categories - and inconsistencies across destinations - is part of the problem.
Despite its shortcomings, for decades there was nothing else available and no real possibility to build something better.
But the social web has changed this irrevocably.
Today, the majority of consumer and business travelers are turning their back on traditional classification systems, instead relying on online reviews and social media to decide which hotel to book and how much they are willing to pay.
This trend accelerates each year. Ask any hotelier and they will tell you, for better or worse, that online reputation impacts revenue potential.
Most travelers don’t focus on star ratings or other industry classifications when searching for a hotel but rather evaluate their options based on the following:
- Location (city/destination/area)
- Type of trip (business, leisure, etc.)
- Specific criteria (free wifi, buffet, parking, etc.)
- Price/best value based on above criteria
- Online reviews/reputation (overall & related to specific criteria)
Sites like Booking.com
have become popular because they aggregate much of this information in one place to help the traveler quickly find the best hotel for his or her specific needs.
Online reviews and other types of user-generated content are influencing consumers and business travelers much more than the traditional classification systems.
ReviewPro recently published its 2014 Top Luxury Hotel & Brand Report, which ranked the top hotels and brands by their online reputation scores (Global Review Index as well as service, value, cleanliness and location indexes).
The study evaluated 83 brands and 1,692 hotels that STR includes in its luxury hotel classification. Every one of the top-rated hotels in the report excels at delivering great experiences and exceeding guest expectations.
However, many high-performing luxurious hotels and brands are not included in the STR list.
The report was the most comprehensive online reputation related study within the luxury hotel segment, generating hundreds of social media mentions and thousands of downloads.
In the 2014 Luxury Top Luxury Hotel & Brand Report, the top performing individual properties had Global Review Index scores that ranged from a high of 99.2% down to 96.5%.
When we examined the GRI scores of some other luxurious hotels that were not on the STR luxury list, we found a number of other establishments with guest satisfaction scores that merited inclusion:
For the category of Best Performing Small Luxury Brands (< 20 hotels), the Global Review Index scores ranged from a high of 93.7% down to 88.7%.
Diving into data for other luxurious hotel brands that were not included in the STR list, we uncovered 10 additional brands that succeed at delivering exceptional guest experiences and whose GRI scores would have landed them on the list:
In fact, many of these hotels and brands are setting new luxury standards in their respective markets.
For example, Red Carnation (London) and Library Collection (New York) each have each properties ranked within the Top 10 hotels in their respective markets on TripAdvisor.
These are just two examples of luxury brands that leverage the social web to be found by discerning travelers. Success is a result of their obsession to detail, focus on exceeding guests expectations and consistency in delivering memorable experiences.
In today’s always-connected world, the factors that influence travelers’ decision- making, both in terms of which hotel they choose to stay at and how much they are willing to pay, have changed forever.
While not yet obsolete, the traditional star rating system and industry classifications are losing their relevance.
Savvy hoteliers recognize that their online reputation, and how it compares to their competitors, is a key driver of success.
NB: This is an analysis by RJ Friedlander, founder and CEO of ReviewPro. It appears here as part of Tnooz's sponsored content initiative.
ReviewPro is a leading provider of online reputation and social media analytics for the hotel industry. The company enables hoteliers to increase guest satisfaction and online revenue by more effectively managing their online reputation and presence on leading social media sites.
NB2: Download the full report here.
NB3: Hotel star image via Shutterstock.