How Australia’s AAA Star Rating system fell from grace after once upon a time being the measure of authority when it came to accommodation standards and expectations.

The AAA Star Rating System was established back in the 1950’s when the Australian Auto Clubs began assessing accommodation on behalf of its members. Over time it grew to become the recognised symbol for quality accommodation standards. In recent years there has been much debate about the future relevance of the star ratings system following the rapid onslaught of property visibility and guest opinion in  the online world. Once considered the holy grail of “Hotel Ranking” with over 15,000 Australian hotels subscribed to the program, just this week (early March 2017), it has been announced that Star Ratings Australia will be closing it’s doors due to un-sustainability of the business model. While this tells a story in and of itself, let’s take a look at some of the reasons behind it. WHY the Star Rating system DID work
  • It was a structured system covering 200+ criteria for measuring accommodation
    • Cleanliness
    • Quality and inclusions
    • Condition of guest facilities
  • It leveled the playing field and gave the guest a more reliable measuring stick to compare properties
  • Compliance was driven by a ‘Big Brother’ style approach meaning if you met certain standards you were allowed to display the star rating awarded.
  • The important thing to note is the ‘Consumer Trust‘ was built through this compliance arrangement.
WHAT CHANGED?
  1. Compliance became tedious and increased in cost (not dramatically but enough). It created more work on already busy hospitality employees and managers to remain compliant, or worse still if looking to increase star ratings!
  2. In the modern Tourism and Hospitality game, 85% of all travel research is now conducted online
  3. Self Rating has become increasingly prevalent in the digital age of hotel marketing.
  4. As a part of this shift to online search, online review websites such as TripAdvisor have risen in popularity.
WHY it FAILED A New Trust Equation Online Reviews are now far more important than official star ratings. There you go I said it. It’s true. Research tells us the over 60% of travelers, won’t make a booking decision before consulting with reviews from previous guests first. Think about your own experience when it comes to buying just about anything. You will listen to those that have come before you and paid their hard earned cash and experienced the actually product, more than you will listen to any form of marketing or promotion. The trust is now evidence based, from real people and real experiences. So optimizing your Review sites and in particular your TripAdvisor listing is critical. Read our article on how TripAdvisor rank your property. It Self Policies Self rating of properties, once frowned upon, now soon sorts itself out if someone wants to play the dangerous game of ‘fudging’ your star rating. If you say you are 4 star, and you are actually 3 star (to make you appear good value), guests will quickly ensure you’ll be found by way of numerous poor reviews. While you may receive a spike in initial bookings it will take you some time until you recover from those online reviews.  Equally if you reverse the situation and claim to be a lower star rating than you really are (to go for an under promise over deliver approach) you will likely attract the wrong type of customer to your property and your whole value offer may not get traction in the market place. So you must be true to who you are. It’s an important part of the new ‘trust’ equation in the modern age. Deeper Insight Representation of Quality, Inclusions and Condition is not enough anymore. Th combination of self-rating systems and online reviews now also provides;
  • Up to date and real insight from real guests who have stayed as little ago as yesterday.
  • Deeper insight related to experience rather than physical attributes.
  • Staff appraisal and critique.
  • Traffic congestion issue and if a property is difficult to find.
  • Location, History, Sentiment, Feel,
The AA star rating system was good, but ultimately failed because it didn’t shift with the guest demands. This is hospitality 101 so we should always be on the look out for what guests are looking for. The static and stiff model was over-ridden by a more nimble, and insightful model. Sound familiar? LESSONS So what are the lessons from all this?
  1. Understand the where the power lies.
    • It’s with the Guest, but don’t worry, if you are good at won’t you do, you’re set for success.
  2. Be True to who you are.
    • When it comes to not only star ratings, but every claim you make about your hotel, be sure to be authentic and real about the product which you are.
  3. Online Reputation is critical.
    • Ensure you are respond to guest reviews (the good, the bad and the ugly). Your comments are an advertisement for your next guest.
  4. Be ready for the next wave of change.
    • What else seems unsettled in your industry? How can we anticipate the next big shift and ensure we are ahead of the game?
   

If any of this sounds familiar and you have some concerns about the performance of your Hotel or Motel, then let’s get together and discuss what you can do to improve.

We provide accommodation business performance coaching services via

  • Online Training & Self Paced Courses
  • Personal Coaching and Guidance, or
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If you’d like to know more give us a call or drop us a line.

02 6977 4333       mick@bizscaping.com.au

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