Fight for the Stars: Hotel VS OTAs - By Jean Francois Mourier

2012-11-08
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  • RevPar Guru 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 it comes 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, an intelligent online solution that provides hotels around the world with an alternative revenue management software system designed to deliver maximum bookings and profits, as well as the convenience of full automation and integration 24/7. As REVPAR GURU's custom-designed Yield Dynamic Price Engine is the only real-time revenue management system available on the market, it meets the rapidly changing needs of hotels looking to increase their competitive advantage in an increasingly difficult marketplace. REVPAR GURU’s system offers dynamic rate optimization, real-time pricing, integrated internet and extranet yield channel management and GDS sales distribution, to increase a hotel's RevPAR intelligently and effectively, while maintaining rate integrity and automated rate parity. Since 2004, smart hoteliers worldwide have used REVPAR GURU’s software system to increase occupancy, average daily rate (ADR) and RevPAR.

    To learn more about REVPAR GURU, please visit www.revparguru.com or call +1.786.478.3500.   Follow REVPAR GURU on TwitterFacebookLinkedIn or YouTube

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