Font Size

- Aa +

Sat 19 Jan 2008 04:00 AM

Font Size

- Aa +

Thinking in boxes

TRI Hospitality Consulting’s Emma Davey takes a look inside Pandora’s box of brands and rating systems to provide a seven-star summary of hotel classification.

When presented with an investor who wants to build a ‘seven-star hotel' it can be a challenge to agree on what the parameters should be, or if indeed a seven-star hotel technically exists at all. It quickly becomes apparent that the star rating is not the best place to start, given that most classification systems in the region use only five tiers.

Classification systems vary significantly from one country to another, and even across the Middle East. Globally, measurement levels may include stars or perhaps diamonds, and the basis for deciding classification criteria may be government driven - to assist with safety standards and tax collection - or consumer driven - in response to the need to understand quality and service. In some markets there are also privately-run rating systems, such as the Automobile Association in the UK.

Understanding how a hotel brand would be positioned from one market to the next requires a comprehension outside the known "star rating" experience and comfort zone. Hotel companies might argue that brand positioning as perceived by the guest, as well as successful marketing, is a clearer statement of quality and service than a star rating. Certainly in the USA, where there is no government classification system for hotels, the commonly used terminology refers to such groupings as upscale, mid-market, budget/economy and limited service.

In markets where classification is not a prerequisite for achieving an operating license, new hotel categories more easily emerge, such as upscale-limited-service to cater for the more style conscious yet budget driven guest. These market-driven segments emerge in response to changing consumer needs and trends, allowing for market diversity without the underlying restraint of the classification system and the perceptions it automatically infers.

As cities within the Gulf experience significant development and change, so they have begun to attract internationally branded hotels in the midscale, limited service and budget/economy sectors. The potential star rating of these hotels presents an interesting issue with regard to their proposed facilities and services. In their home markets some of these brands have evolved from locations on busy arterial roads to urban centres, with the aim of offering a budget alternative to the full-service hotels typically found there. The challenge has been to make the project financially viable in a city centre location, while continuing to maintain brand standards and offer the value expected. The temptation in the city location has been to adapt by offering more facilities and services, but this can impact the project investment negatively.

The issue in this region is that in order to achieve a certain star rating, it might be necessary to amend the brand standards. Some limited service brands, not yet present in the region, have shared bathrooms and typically do not offer food and beverage service. However, some classification systems here require these provisions to achieve even a one-star status. With classification necessary to obtain an operating license the brand has no choice but to adapt.

Does it matter?

So, when considering developing a new hotel in the region, to what extent does the star rating matter?

The major impact for star rating on new hotels is at the top and the bottom of the scale.

At the lower end of the scale, there will be some adaptation of international brands in terms of product and levels of service as they enter the regional market. This will be necessary in order to meet the needs and expectations of regional guests, as well as minimum classification requirements.

For the top end of the market, of course it is important to achieve the highest status; it is what is typically valued about the brand - its alignment with quality. The hotel will be adapted to meet local market expectations so that the brand will be perceived as the best quality in whatever market it operates.

However in the middle segment brand guidelines about levels of service and room product are typically strictly enforced to ensure uniformity across the globe, leaving little flexibility to position the product against a specific rating. Therefore, with economy-driven concepts the adherence to brand standards becomes more important than the alignment with a specific star rating.

As the market changes and expands, the potential to address the needs of emerging consumer segments paves the way for boutique and niche brands that are synonymous with their name and product, rather than their classification. So while hotel classification has its purpose in regulating the industry, providing development guidelines for independent hotels and enforcing health and safety standards, it clearly cannot be the guiding force behind design and planning for a hotel - seven-star or otherwise.

TRI has assisted and advised on hotel management company selections for numerous hotels on behalf of independent hotel owners and institutional owners across the MENA region. TRI Hospitality Consulting is one of the world's leading management consultancies in the fields of hotels, tourism, leisure and real estate.

For all the latest travel news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.