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Shocked industry responds to game-changing Star Ratings Australia closure

Official ratings no more: the scheme will completely cease to operate as of June 30 this year, in a startling indication of what the digital age means for Australia’s accom sector.

Star Ratings Australia told accomnews: “There will no longer be a standardised or accredited accommodation rating system. This means properties will have the freedom to advertise any rating they believe best represents their property. Where possible staff have been offered alternative employment.”

Michael Reed, CEO of the Australian Motoring Services said: “The Australian Auto Clubs are proud to have provided its members with a valuable and respected scheme that has enabled them to book their holiday or business accommodation with confidence.”

“At the height of Star Ratings Australia’s success there were 15,000 Star Rated properties across Australia. Being star rated meant that consumers would always know what to expect from the accommodation they booked. We were always true to our message – the accommodation you expect should be the accommodation you get.”

Mr Reed explained, “In a digital world, where consumers can provide online reviews, and with more accommodation providers choosing to self-rate, the Star Ratingsscheme has found its independent review model increasingly unsustainable.

The scheme, which is owned by the Australian Motoring Clubs, including NRMA, RACV, RACQ, RAA, RAC, RACT and AANT, has proudly been in operation since the 1950s and holds a long and distinguished history as Australia’s only independent, accredited accommodation scheme.

accomnews has reached out to industry leaders and will keep updating this article with their opinions and comments on this situation.

Carol Giuseppi, CEO, Tourism Accommodation Australia said:

“It is disappointing that Star Ratings will cease to operate, because it is important that the industry retains a credible accreditation system to ensure that all accommodation providers retain a focus on service and quality. However, the decision does reflect the changing hotel landscape and online environment.

“Star ratings played a crucial role in the evolution of Australia’s hotel sector before international brands became widespread and the internet changed the way travellers made their hotel decisions. Transparency is the key to hotel ratings, and with an increasing range of hotel product and targeting different demographics, it has to be the ‘brand’ that really determines a hotel’s rating for the majority of travellers. With all major hotel groups diversifying their brands, it has made it easier for travellers to select precisely the style and level of hotel they’re seeking.

“Twenty years ago, hotel brands were more restricted, where as today larger hotel groups can have dozens of different brands – even brands within brands – to ensure that customers know exactly what they are getting and what to expect. The hotel groups are then made to be very accountable to upholding brand standards, because guests will very quickly go online and pass judgement.

“In some cases, a very boutique hotel might not technically meet 5-star standards, but because of the location, the ambience and the style, the guest might rate this far higher than a traditional 5-star hotel. The bigger concern as a result of not having an official star ratings system is that independent hotels – particularly in regional areas – are more vulnerable. The star ratings systems that originated with the motoring organisations were sometimes too restrictive in its assessment criteria to take into account style, ambience and other less-empirical measures, but they provided a good base for travellers to assess a hotel’s merits.”

“Self-rating unfortunately is very inconsistent, while the lack of transparency in online reviews means that some review sites can distort the true picture. Many of our members are also concerned that it will increase the power of OTA’s to assess hotels without taking into consideration the full facts of what their hotel offers. In the end, the market will decide the issue. If a hotel calls itself 5-star, but delivers 3-star service, guests will go elsewhere, and with over 100 new hotels scheduled to enter the Australian market over the next five years, the pressure will be on all hotels to deliver what they promise.

“However, there will be hotels that will suffer as a result of Australia being one of few countries to not have an independent hotel ratings scheme.”

Golden Chain general manager Michael Georgeson said:

“This is a disappointing outcome for the industry and I believe it is something which the industry as a whole will lament in the future.  While the scheme had its detractors, it was still the only quantified, objective and industry wide quality assessment of accommodation that we had.

“Even though many individual operators had, quite fairly, elected to stop supporting the scheme for their own purposes it still remained the single reflection of quality standards for the accommodation industry across most sectors and all standards from top to bottom.  Even self-rated properties have positioned themselves in comparison to those officially rated.”

“Though consumer reviews have a strong and valid place within the industry and certainly for our guests, those systems are fraught with issues as well and, arguably, have less validity than Star Ratings ever did.

“In the end the market has spoken and the Auto Clubs of Australia has decided to cease this service for its members, consumers and the accommodation industry.  This is a pity given the longevity and strength the scheme had entering into the 21st Century, hopefully a replacement accreditation system will be developed to fill this gap.”

Tourism Brokers director Michael Philpott said:

“This is a real shame and will create problems for leases and landlords potentially as a result. A flow on will be good news for chains, especially Choice and Best Western who have separate inspection and points system as part of the chains with inspectors attached.

“In general, the leases requiring lessees to maintain the star rating are in limbo come June 30, 2017.”

“All we can really do is hope someone buys the SRA product as a dead duck and revives it, we need it as an industry, especially for uniformity. Certainly the SRA product  is an independent professional system incorporated into most lease documents and is preferable in its makeup to TripAdvisor, Booking.com or Expedia as an independent  rating source in context.  SRA works closely with the industry and guides it where value can be added and given the context of these sites being more consumer of the end product driven and subject to in some instances unfounded comments that can cause considerable harm.

“I doubt the measure of TripAdvisor, Booking.com or Expedia could be considered a legal equivalent in the legal lease framework as the current reports are written inspection reports that are ranked and rated on points. Undoubtedly this is going to be a grey area for some going forward.”

Grant Colquhoun, TripAdvisor spokesperson

“Star Ratings Australia is greatly respected in the role it has played over the years, growing and improving the industry and helping travellers in Australia make decisions based on the physical offerings that properties have available, be it facilities, staff or amenities.

“With more travellers embracing user-generated content to research their holidays, as well as sharing their first-hand experiences in real-time with others today, it is positive that the Australian Tourism Industry Council is working with accommodation businesses to determine the best way forward.”

About Rosie Clarke

Rosie Clarke
Rosie Clarke is the editor of Resort News and Accom Management Guide as well at their digital home, accomnews. You can reach her at any time with questions or submissions.

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One comment

  1. This is such a complex topic but overall I think this is a good thing. The number of ‘5 star’ hotels I have stayed in which we run down and offering less than 3 star service has left me extremely disappointed. Nowadays my decision to book accommodation relies on the hotel’s professional photos and the guest reviews.

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