|by Harry Nobles, September 1999
When I was at AAA the question I was most often asked by
owners and managers was “How can I get a higher rating?” My
answer then and now is the same: “Before you think about a higher
rating, you should first determine if your property is already at its optimum
rating.” I define optimum rating as the rating at which your
property is best positioned to compete with local competition in both price
and product, and which can be sustained over a period of time.
While earning a higher rating may be great for the ego, it may
not be financially feasible in the long term. I suggest you consider
the following points if you are thinking about a higher rating: (1)
What physical and/or service enhancements are needed to earn the higher
rating? (2) What will these improvements cost? (3) Can
your raise your rates enough to offset this cost? If
the answers to these questions are favorable, you should then consider
your current clientele. Why are they staying at your property?
If you have to raise your rates to recoup the cost of the higher rating,
will you lose any of your repeat guests? Replacing lost business
can be very expensive.
You should also be aware that 80% of AAA members choose to stay at 2
or 3 Diamond rated properties. If your property is already at this
level, it might be more practical to focus on maintaining your current
rating. In today’s very competitive and rapidly changing market,
maintaining your current rating becomes more difficult and more expensive
every year. This is particularly true for older properties.
If, after doing the things recommended above, you determine that
a higher rating is right for your operation, you should certainly go for
it. I wish you all success!