By Jean Francois Mourier 
June, 2012
 
As most of you are probably aware, hotel ratings have gone through many different transformations throughout their existence. For many years, hotels were rated based on “secret shopper” inspections of their property by Mobil (stars) and AAA (diamonds).
 
With the creation of the online travel agencies (OTAs) and the increased popularity of the online channel, hotel ratings became much more complicated as all OTAs also offered a star rating on every property listed on their site. The problem is that not all ratings for one hotel are the same across multiple sites. Most of the OTAs base their ratings on a subjective analysis of a property, based on inconsistent metrics.
 
So it leaves hotels between a rock and a hard place (or perhaps between a star and a diamond?). The question is: which rating system has more impact on your business and your revenues?
 
In today’s overly crowded hotel marketplace, consumers use OTAs (rather than online search engines) as a tool to research the hotels available in a destination. (A small aside – if your property doesn’t have a presence on the OTAs then you’re missing out on all this business. What are you thinking?!) Today, travelers rarely visit Mobil or AAA to find out the star rating of a hotel; instead, they base their decisions on the star rating provided by their OTA of choice.
 
An added factor that demonstrates the importance of your star rating on the OTAs: most sites give consumers the ability to search by star rating, so if you are not being included in the appropriate classification category, you may be losing a lot of business. In our experience, a loss of half of a star on the OTAs, can result in a $40-50 loss in RevPAR. Extrapolate that number out based on all of the rooms in your property and that can add up to MILLIONS of dollars lost because of an error in your star rating on the OTAs.
 
Hoteliers and revenue managers should ensure that their property has parity in star ratings across all of the OTAs. If not, then there is work to be done.
 
Use your property’s relationships with the OTAs to get your ratings changed. For example, if your property is rated as a three-star property on Expedia and four-star property on Hotels.com, then petition your Expedia account manager to increase your rating. Since most of the OTAs don’t have a consistent appeals process, your success will come down to whether you can actually argue a case for your claim. Provide as much concrete proof and info to support your claim, including a list of other OTAs (or local Mobil/AAA ratings) that rate your property higher. Once you’ve gotten your ratings into parity, they should be monitored on a regular basis to ensure that they stay consistent.
 
My advice for today is this: Fight for your property’s stars. Make sure that your property is being reflected in the fairest light so that potential travelers will be encouraged to book with your property over the competition. When itcomes to star ratings, you have absolutely nothing to lose but so much (revenue) to gain!

---

Jean Francois Mourier is CEO and Founder of REVPAR GURU, a company that provides automated revenue and rate optimization solutions. REVPAR GURU’s real-time pricing solution combined with automated online distribution helps hotels maximize occupancy and increase their profits. The company’s Dynamic Pricing Engine, an integrated revenue optimization and pricing solution, adds unprecedented power and real-time adaptability to the pricing process, leaving revenue managers more time to run their hotels, make better decisions and do what they do more efficiently. You can reach Jean Francois through www.revparguru.com or by calling 1.786.478.3500.