Hotel classifications vs. customer expectations

Spain’s Cantabria University conducted a study to determine whether that country’s hotel classification system was an accurate indicator of the quality of actual hotel experiences. The results showed that customers staying in luxury establishments had proportionally higher expectations than average. 

Since the criteria for awarding stars is based primarily on tangible elements, this sometimes leads to a discrepancy between customer expectations and customer perceptions. 

Commentary from Michael Nowlis, Managing Director of Tourism Control Intelligence.

Widespread systems

Classification systems to define the quality of hotel establishments are widely used in tourist destinations. The criteria used to determine the number of stars (or other symbol of recognition) usually correspond to tangible, measurable factors (room comfort, availability of parking, furnishings, etc.): the higher the rating, the more one can expect the room to be luxurious and costly.

However, it is also important to consider factors that, while they are not so easily quantified, strongly influence customer satisfaction. Did the room meet the customer’s needs and expectations? 
What elements most often tend to disappoint customers in each of the various hotel categories?

Survey results

In Spain, establishments receive up to five stars, according to their ability to meet certain technical criteria with regard to the services provided and the hotel’s characteristics. Customers seeking superior rooms are, of course, going to have higher expectations. The question is, do these hotels actually meet customer expectations? The survey results show that, in most cases, the actual perception of the product was inferior to prior expectations (Table 1). For each of the criterion rated, respondents indicated their agreement on a scale of 1 to 7, with 7 meaning “strongly agree.”

Table: Comparison between ratings of customer expectations and customer perceptions, by hotel category

The only category in which perceptions surpassed expectations was that of 1-star hotels. Since stars are attributed on the basis of a combination of specific, predefined criteria rather than the quality of the experience, hotels in this “tourist-class” category appear to pleasantly surprise their guests.

Sources of disappointment

For the purposes of the survey, the service quality assessment criteria were divided into four major categories:

§                       Reliability (staff discretion, guaranteed reservation, problems solved quickly and effectively, quick and able service)

§                       Characteristics of the personnel (courtesy, professionalism, individualized service)

§                       Tangible elements (rooms are comfortable, quality food and drink, premises are safe, visually attractive premises)

§                       Complementary offering (location is pleasant and restful, information available about diverse activities, wide range of services offered by hotel)

In Table 2 below, the sources of the discrepancy between expectation and perception are illustrated for each hotel category. A plus sign (+ or ++) means that, for the given criterion, the customer’s experience was superior or largely superior to initial expectations. If the experience was inferior or largely inferior to initial expectations, this is indicated with a minus sign (- or –).

Table 2: Breakdown of differences between customer expectations and customer perceptions, by hotel category

Proliferation of rating systems = more confusionA single destination often employs a number of classification systems which can create confusion for consumers, notes Michael Petrone, director, Tourism Information Development for the Automobile Association of America (AAA).

A single destination often employs a number of classification systems which can create confusion for consumers, notes Michael Petrone, director, Tourism Information Development for the Automobile Association of America (AAA).

Many online travel agencies also use their own classification systems, although they rarely have a field staff of evaluators to physically inspect the properties. In many cases, evaluations are supplied by the hotel itself and not by an impartial intermediary. It is therefore difficult for consumers to assess the significance of the various ratings, let alone their accuracy.

As for the top two North American hotel rating systems – the five diamonds from AAA and five stars from Mobil – a comparison by Hotel Online concluded these systems are very similar. Both recognize the top lodgings and are prestigious, respected by the industry and trusted by travellers. Although not perfect, they are certainly credible.

Sources:
- Nobles, Harry and Cheryl Griggs. “5 Star vs 5 Diamond: What’s the Difference?,” Hotel Online, November 2004.
- Petrone, Michael. “Internet Hotel Ratings Causing Confusion for Consumers, Says AAA,” Business Wire, December 6, 2004.
- Fernandez, M. Concepcion Lopez and Bedia, Ana M. Serrano. “Is the hotel classification system a good indicator of hotel quality? An application in Spain,” Tourism Management, Vol. 25, May 9, 2004.

Commentary from Michael Nowlis, Managing Director of Tourism Control Intelligence

Michael Nowlis is Managing Director of Tourism Control Intelligence. He has rated hospitality establishments for various guides and trained AAA inspectors.

Why make things simple when you can make them complicated? Such a rhetorical question summarizes the obfuscation created by tourism authorities, intergovernmental organizations, travel companies and trade associations in their discombobulated initiatives to classify hotels. Many European countries categorize hotels using a system of one to five stars. However, that’s just the beginning. The French government awards a maximum of four stars but has an alternative category called “four-star luxe” and another, termed “HT”. In Dubai, a major destination for European vacationers, there is a seven-star hotel. Spanish lodging establishments are graded using a star scale with additional qualifiers such as “R”, “H” and “Hs”. A modest Madrid hostel, for example, could have a rating of “** R Hs”. European hotel classification is a jumbled litter of incomprehensible stars, diamonds, letters and numbers.

While hospitality industry has long resisted Brussels’ initiatives to harmonize hotel categorization in the name of consumer protection, national tourism authorities are also losing the battle to standardize hotel ratings. Devolution and decentralization have resulted in classification standards becoming increasingly diverse rather than more uniform. In Spain, each of the seventeen regional authorities has its own approach to grading lodging facilities. Italy has an obligatory five-level scheme administered by the Ministry of Tourism but permits local authorities to add supplementary requirements. The four regions of the United Kingdom – England, Wales, Scotland and Northern Ireland – each maintain their own classification criteria. In a seamless Europe where holidaymakers can travel from Finland to Portugal without ever stopping at a border and use a single currency along the way, the lack of coherence in hotel classification is an embarrassment to the tourism industry.

Faced with resistance and a lack of governmental coordination, the World Tourism Organization and International Hotel & Restaurant Association have abandoned efforts to standardize hotel classification. Where governments and official organizations have failed, the private sector is filling the void. When Europeans speak of “Relais & Chateaux”, they are not necessarily referring to the limited number of member hotels that belong to the marketing network. The name has become a generic adjective to describe any lodging establishment with personalized service, luxurious appointments and extraordinary cuisine. Just as the Mobil and AAA guides have become the preeminent hotel rating authorities in North America, Michelin is considered the bible for travelers in France and throughout much of Europe. If national tourism authorities and intergovernmental organizations are unable to forge a consensus on hotel classification, they should step aside and let the private sector do it.

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