2010 Ratings and Rankings Roundtable The Quest for Consistent Ratings Cornell Hospitality Roundtable Proceedings Vol. 2, No. 2, March 2010 Cosponsored by www.chr.cornell.edu Advisory Board Ra’anan Ben-Zur, Chief Executive Officer, French Quarter Holdings, Inc. Scott Berman, U.S. Advisory Leader, Hospitality and Leisure Consulting Group of PricewaterhouseCoopers Raymond Bickson, Managing Director and Chief Executive Officer, Taj Group of Hotels, Resorts, and Palaces Stephen C. Brandman, Co-Owner, Thompson Hotels, Inc. Raj Chandnani, Vice President, Director of Strategy, WATG Benjamin J. “Patrick” Denihan, Chief Executive Officer, Denihan Hospitality Group Joel M. Eisemann, Executive Vice President, Owner and Franchise Services, Marriott International, Inc. Kurt Ekert, Chief Operating Officer, GTA by Travelport Brian Ferguson, Vice President, Supply Strategy and Analysis, Expedia North America Kevin Fitzpatrick, President, AIG Global Real Estate Investment Corp. The Robert A. and Jan M. Beck Center at Cornell University Chuck Floyd, Chief Operating Officer–North America, Back cover photo by permission of The Cornellian and Jeff Wang. Hyatt Anthony Gentile, Vice President–Systems & Control, Schneider Electric/Square D Company Gregg Gilman, Partner, Co-Chair, Employment Practices, Davis & Gilbert LLP Susan Helstab, EVP Corporate Marketing, Four Seasons Hotels and Resorts Jeffrey A. Horwitz, Partner, Corporate Department, Co-Head, Lodging and Gaming, Proskauer Cornell Hospitality Roundtable Proceediings, Kenneth Kahn, President/Owner, LRP Publications Vol. 2 No. 2 (March 2010) Paul Kanavos, Founding Partner, Chairman, and CEO, FX Real Estate and Entertainment © 2010 Cornell University Kirk Kinsell, President of Europe, Middle East, and Africa, InterContinental Hotels Group Cornell Hospitality Report is produced for Radhika Kulkarni, Ph.D., VP of Advanced Analytics R&D, the benefit of the hospitality industry by SAS Institute The Center for Hospitality Research at Gerald Lawless, Executive Chairman, Jumeirah Group Cornell University Mark V. Lomanno, President, Smith Travel Research Suzanne R. Mellen, Managing Director, HVS Rohit Verma, Executive Director David Meltzer, Vice President of Global Business Development, Sabre Hospitality Solutions Jennifer Macera, Associate Director Eric Niccolls, Vice President/GSM, Wine Division, Glenn Withiam, Director of Publications Southern Wine and Spirits of New York Shane O’Flaherty, President and CEO, Forbes Travel Guide Center for Hospitality Research Tom Parham, President and General Manager, Cornell University Philips Hospitality Americas School of Hotel Administration Chris Proulx, CEO, eCornell & Executive Education 489 Statler Hall Carolyn D. Richmond, Partner and Co-Chair, Hospitality Practice, Fox Rothschild LLP Ithaca, NY 14853 Steve Russell, Chief People Officer, Senior VP, Human Resources, McDonald’s USA Phone: 607-255-9780 Michele Sarkisian, Senior Vice President, Maritz Fax: 607-254-2922 Janice L. 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Marsh’s Hospitality Practice Maritz PricewaterhouseCoopers Proskauer Sabre Hospitality Solutions SAS Schneider Electric Thayer Lodging Group Thompson Hotels Travelport WATG Friends American Tescor LLC • Argyle Executive Forum • Berkshire Healthcare • Cody Kramer Imports • Cruise Industry News • DK Shifflet & Associates • ehotelier.com • EyeforTravel • 4Hoteliers.com • Gerencia de Hoteles & Restaurantes • Global Hospitality Resources • Hospitality Financial and Technological Professionals • hospitalityInside.com • hospitalitynet.org • Hospitality Technology • Hotel Asia Pacific • Hotel China • HotelExecutive.com • Hotel Interactive • Hotel Resource • HotelWorld Network • International CHRIE • International Hotel Conference • International Society of Hospitality Consultants • iPerceptions • JDA Software Group, Inc. • Lodging Hospitality • Lodging Magazine • Milestone Internet Marketing • MindFolio • Mindshare Technologies • Parasol • PhoCusWright • PKF Hospitality Research • RealShare Hotel Investment & Finance Summit • Resort+Recreation Magazine • The Resort Trades • RestaurantEdge.com • Shibata Publishing Co. • Synovate • The Lodging Conference • TravelCLICK • UniFocus • WageWatch, Inc. • WIWIH.COM 2010 Ratings and Rankings Roundtable The Quest for Consistent Ratings by Rohit Verma and Russell Arthur Smith ExEcutivE Summary articipants at this roundtable examined the status and challenges of both formal ratings (such Pas Forbes or Michelin) and informal ratings and comments on social media websites (including TripAdvisor and Facebook). The roundtable was held in January 2010 at the Cornell-Nanyang Institute of Hospitality Management, in Singapore. Although the formal systems are well established, there still is no single system for rating or ranking hotels worldwide. Since some national governments have devised their own rating systems, a certain number of stars may have a different meaning for hotels in one location as compared to another nation or even another province. Even more challenging is finding a way to interact with the postings on the internet. Hoteliers are still determining whether and how to respond to comments—especially negative ones—and to find ways to gain marketing information from the social media. Other issues connected to hotel and restaurant ratings include how to adjust existing rating systems in keeping with different cultural norms and how to ensure accurate information in social media (including correcting errors of fact). 4 The Center for Hospitality Research • Cornell University ratings and rankings roundtable Participants January 7-8, 2010 at Nanyang Executive centre, Nanyang technological university, Singapore co-chairs: russell arthur Smith, interim Dean, cornell-Nanyang institute of hospitality management, and rohit verma, Professor and Executive Director, centre for hospitality research, cornell university School of hotel administration Patrick andres, Managing Director, SynXis Asia-Pacific yona he, Regional Director, Asia Pacific, Forbes Travel Guide victor Foo yip hon, Vice President, First World Hotels & Resorts Simon Kahn, Country Manager Singapore, American Express international, Singapore michael Lee, Chief Information Officer, Banyan Tree Hotels and Resorts Evan Lewis, Vice President, Communication, Accor Asia Pacific Jack Lim, Vice President—Head of Hotel Sourcing, GTA by Travelport Kwan Lui, Founder & Director, At-Sunrice Global Chef Academy Deborah merrens, Area Director— RM, Middle East & Asia Pacific, Hilton World–Asia Pacific Kellvin ong, General Manager, Rendezvous Hotel Singapore charles reed, Chief Executive Officer, DOCOMO interTouch maria taylor, Vice President Distribution, Accor Asia Pacific ian Wilson, General Manager and Vice President Asia, The Fairmont Singapore about thE authorS russell arthur Smith, Dr.Des., rohit verma, Ph.D., is a professor is interim dean of the Cornell- at the Cornell School of Hotel Nanyang Institute of Hospitality Administration and executive director Management. of the Cornell Center for Hospitality Research. Cornell Hospitality Roundtable Proceedings • March 2010 • www.chr.cornell.edu 5 corNELL hoSPitaLity rouNDtabLE ProcEEDiNgS 2010 Ratings and Rankings Roundtable The Quest for Consistent Ratings by Rohit Verma and Russell Arthur Smith Hotels and restaurants have been rated and ranked by professional observers and organizations for decades, often with input from the traveling public. In 1900, to assist automobile tourists in France, André Michelin began publishing a guide to restaurants, lodging, and automobile mechanics. The American Automobile Association began publishing hotel guides in 1917, and is now famous for its diamond ratings. From 1936 through 1962, Duncan Hines and his “dinner detectives” published Adventures in Good Eating, now largely forgotten, which guided Americans to the best restaurants in the nation. (The same Duncan Hines developed the cake mixes that still bear his name.) Starting in 1958, the Forbes Travel Guide (originally known as the Mobil Guide) devised a star system for rating hotels. More recently, a survey begun in 1979 by Tim and Nina Zagat has compiled user reviews of restaurants, now published in more than 70 markets, and has extended its survey to hotels and movies. 6 The Center for Hospitality Research • Cornell University Electronic sites and social media have magnified the As a starting point for the discussion, the panel noted user rating approach pioneered by the Zagat Survey. With that two pre-eminent groups for ratings and rankings in the the growing influence of social media, the question has been hospitality industry are Forbes Travel Guides and the Ameri- raised regarding whether such media have overtaken the can Automobile Association (AAA). role of the ratings and rankings systems developed by the Forbes Travel Guides rate properties by using stars to commercial and professional organizations. With formal represent levels of quality, including the famous Five Star ratings and rankings, hotel properties and restaurant estab- Award certificate, which represents a “level above” other lishments could earn a rating based on established criteria rating systems. The Forbes Travel Guide process of rat- and then promote their ranking with the hope that this ing each establishment includes a facility inspection and recognition would help them to attract more customers and service evaluation. A Forbes Travel Guide listing and review business. On the other hand, it’s hard for hospitality firms constitutes a positive quality recommendation; every listing to know the criteria applied by guests or to put user ratings is an accolade and recognition of achievement. The Forbes into promotional materials. Travel Guide process of rating each restaurant establishment In view of the disruption in existing rating processes follows a similar process. created by the internet, the Cornell Center for Hospital- The AAA diamond rating process examines approxi- ity Research and Cornell-Nanyang Institute of Hospitality mately 31,000 hotels and 27,000 restaurants throughout the Management invited hospitality industry experts and repre- United States, Canada, the Caribbean, and Mexico to confer sentatives from the hotel and food and beverage industries its “AAA Approved” designation and diamond rating. After in the Asia Pacific region to discuss and examine the issues a thorough inspection is conducted, establishments that surrounding ratings and rankings. meet AAA’s criteria become AAA approved—indicating The 2010 Ratings and Rankings Roundtable covered the their ability to offer an acceptable level of quality for mem- following topics: bers. Each AAA approved hotel and restaurant is assigned an (1) Ratings and rankings by commercial and professional AAA rating of one to five diamonds, indicating the level of organizations (for example, Forbes Travel Guide, AAA); services and amenities provided. As with the Forbes five-star (2) Social media ratings and rankings (for example, TripAd- rating, gaining a five-diamond award from AAA is a signal visor, Facebook, Twitter); and accomplishment. Outside North America, the Michelin guide is a well- (3) What is missing in ratings systems, based on a small known rating system, assigning restaurants one to three group brainstorming session? stars based on its strict criteria. Michelin employs full-time This report summarizes the proceedings and insights professional inspectors who anonymously visit restaurants gathered from the roundtable to provide some perspectives and hotels and evaluate them. Its evaluation process has from the industry on ratings and rankings in the hospitality been honed over time to identify consistently high-quality industry. establishments to suit a range of budgets and across a range Ratings and Rankings by Commercial and of styles and cuisines. In addition to these rating systems, Professional Organizations individual nations have established their own idiosyncratic For this session, roundtable participants were asked to con- star-rating systems, which give some indication of quality sider the following two questions: but may not conform to the criteria established by AAA, Forbes, or Michelin. —What do we make of ratings and rankings by commercial and professional organizations?, and —What are we doing about these ratings and rankings? Cornell Hospitality Roundtable Proceedings • March 2010 • www.chr.cornell.edu 7 How Ratings and Rankings Are Applied consumers’ view of the professionally devised ratings. Partici- The consensus among the roundtable participants was that pants noted that as recently as ten years ago, people typically the Forbes Guide and the AAA diamond ranking process booked hotels through travel agents who understood the star are most popularly used in North America for hotels and system. Today’s hotel guests rely on websites to check, for restaurants, while Michelin is dominant in Europe for res- example, which properties have the best spas or awards. They taurants. The high-end hotels with restaurants will try to get look for value as they search online and at the same time, rankings for both operations. they want star value. In China, the government determines hotel rankings, Participants pointed out that it was common for people and the Chinese hoteliers have created their own star system to select a hotel by looking at only limited information, so that does not correspond with international rankings or they pay attention to star ratings, customer reviews, prices, standards. For example, a hotelier in China may declare that and photographs. North Americans tend to pay closer atten- a property is a 5-star operation. That decision can be made tion to ratings and hotel operators, and they do not scroll all unilaterally without consideration of international bench- the way down the web page to take in all possible informa- marks. This can be confusing for guests. By contrast, Forbes tion. Asians, on the other hand, are more concerned about Guides, which have international benchmarks, give guests prices. Particularly in China, people scroll all the way down a good indication of what they will experience when they the web page to check on all information to make sure they select and stay in hotels. get the best deal. Given the diversity in ratings worldwide, the hoteliers Given the absence of official rankings throughout Asia, wondered who could take the lead in standardizing ratings, different authorities often rate hotels. These approaches particularly in the Asia Pacific region, given the different may employ size (e.g., large, medium, small) or rack rate. systems maintained by India and China. Sometimes, hoteliers work with traditional travel agents Hotels typically display signs declaring their AAA or and the well-known online travel agent Expedia to offer the Forbes rating at the reception counters, on their corporate appropriate level of services and quality to attain the rank websites, and in guidebooks. For corporate travel, when they seek for their hotels, based on a particular market posi- hotel sales staff and clients are negotiating prices, the star tion. (Expedia has considerable information about travelers’ or diamond ratings systems come into play. Because of the preferences, given that its users research, plan, and book publicity and business value of the ratings, there is a deep comprehensive travel needs on the site.) The hoteliers’ ap- fear by hoteliers and restaurant operators that they could proach in this regard can lead to confusion for travelers. For lose their rank. This leads to a passion to maintain stan- example, how does a 7-star hotel fit in, given that no other dards to retain the rankings. Panelists pointed to a level system goes above five stars or five diamonds? Ibis Hotel in of friction among hoteliers regarding the value of ratings. India, for instance, is ranked at a different star level than in Some feel rankings are important, while others who do other countries. Thus, the question becomes, how do you not care for stars or diamonds as the return on investment standardize across a region? There is a need for transparency (ROI) is more important for their businesses. in the criteria, as a 5-star hotel in China is actually a 3-star With the rise of electronic media, the roundtable par- hotel internationally. It maybe a question of perceived value ticipants thought that a key question—unanswered for the and what the guest is paying for. moment—is, looking at international ratings, the internet, A point is raised that if we move into different markets, and traditional and new media, which has the biggest im- we should look at different languages for the social media pact on customers’ desire to stay at hotels or eat at restau- and websites, although English will continue to be the pre- rants? Roundtable participants wondered which medium dominant language. is more credible than the others. Furthermore, participants Need For Independent Assessments were unsure whether people really use star ratings to select One participant suggested that the hotel operators face too their hotels, because there are many criteria that guests many surveys and rankings, and there is a need for truly might apply in choosing a particular property. It was sug- independent assessments. For example Michelin is a French gested that in the U.S., people may chose hotels depending ranking in a strong French-centric culture. But you cannot on rankings, but in Asia, brands are more important. Asians assess Japanese food with French-style ranking and criteria. also tend to look at prices and locations, and they generally So the question is, how much do we believe in the ranking? think that star rankings are subjective and vague. In Europe, too many stars are given to French restaurants, Rating Services versus Rating Experiences and so the experience of eating and the standards of cooking A key question surrounding ratings systems is whether in such restaurants started to erode. Michelin has to adjust the internet and other user-rated systems have changed their rating model accordingly. 8 The Center for Hospitality Research • Cornell University However, another participant pointed out that in Japan, other travel sites use only ratings, photos, and price. Yvette the Japanese accept Michelin’s ranking. People want to know functions like a personalized matchmaking service that that they are in the same class, so with the Michelin ranking, helps guests find a hotel for their personality. So this match- people will know the rated restaurants are in the same strata. making by personality goes beyond a checklist, and focuses Generally, Michelin is popular and well respected. In fact, on emotions. Another participant mentioned that after the guests sometimes pay more for a top-ranked restaurant than guest takes the personality test and is matched to a hotel, they do to stay at a top-ranked hotel. There is a difference in Joie de Vivre must make sure the hotel experience matches recognizing rankings between hotels and restaurants, and what the guest expects. people do seek out restaurants using the Michelin guide. Another example of a firm that is employing affective According to the roundtable participants, service evalu- marketing is Wild African Ventures. Users of its website are ation is important, as this means the ability to target the asked a couple of questions, and are then recommended market by sharing experiences. Inspectors or persons staying several hotels with rankings in East and Southern Africa and at the hotel, who are checking on staff efficiency, must have the Indian Ocean islands. specific definitions for service standards and quality. Roundtable participants identified a continuing trend in A hotelier participant noted that his hotel group which the formerly mass market is being segmented in ever preferred to use other ratings, such as Richey International, smaller slices, until the focus now is on one-to-one market- where two different individuals test every facility a mini- ing. Looking at customer comments on websites, a hotel’s mum of two times, resulting in a more rigorous rating. By position becomes more credible when there are numerous contrast, for the AAA diamond rating an inspector visits favorable comments, say, 500. Then, you have a democracy only once. This can be a problem, because the assessment of opinions that would be powerful when combined with the based on one visit may not be that fair. This panelist believes professional ratings, such as Forbes or AAA. that a 5-star hotel needs a minimum of two visits. The Social Media Ratings and Rankings inspector needs the second visit to the hotel or restaurant so as to compare and confirm the assessment based on the first The other side of the professional rankings coin is user visit. It is also pointed out that the shelf life of an inspector generated comments, ratings, and rankings found in social is limited, as he or she cannot do the job for too long. It was media. Some of the key social media used in the hospitality felt that to be accurate, ratings should be conducted annually. industry are TripAdvisor, Facebook, Twitter, Travelocity, and Roundtable participants identified the need to base a Priceline. hotel’s reputation on a combination of both rating services TripAdvisor, where millions of travelers have shared and rating experiences, as this combined approach would be their candid reviews of hotels, bed and breakfasts, inns, more credible. When a hotel or restaurant receives the high- travel packages, vacation packages, and travel guides, is the est level of ratings from both sources, guests understand that most frequently used social medium for people seeking they are more likely to have greater satisfaction. travel-related information. In TripAdvisor, only people who An example was quoted of San Francisco–based Joie de have used the products and facilities give feedback. The trav- Vivre, which operates nearly 40 boutique hotels, more than eler then becomes an expert on where to go, and by review- 20 restaurants, and five spas in California. This firm main- ing the information gathered, people can get a good idea of tains its own ranking system, and its website offers “Yvette,” the products and facilities. It was suggested that it would be an innovative hotel matchmaking service that has smart useful to determine whether hits on social media sites, like functionality. Based on answers to five questions, Yvette TripAdvisor translate into business by tracking reservations partners each guest with five Joie de Vivre hotels, six unique before and after consumers visit such sites. activities, and two in-the-know local guides. The question- Roundtable participants raised a key question regarding naire based on personality is as follows: information on social media sites. How does one determine what is relevant and not relevant, and how can a hotel or • What kind of people do you most connect with?, restaurant make the most out of what’s found there? Social • What word best describe your outside interests?, media are unlike other websites, because other sites are • What kind of environment best suits you?, connected with vested interests, but the social media focus • What words best describe how other people see you?, on consumers’ experiences. Thus, social media speak loudly and to hoteliers and are different from mystery shoppers, for in- stance. Customers who have paid their own money are more • What kind of personality do you most admire? frank, and have substance, credibility, and quality assurance. Yvette seeks to learn guests’ individual tastes and prefer- In contrast, rating agencies are looking at the hotel profes- ences to offer them a congruent experience. By contrast, sionally, and hotels’ own rankings are self-declarations, so Cornell Hospitality Roundtable Proceedings • March 2010 • www.chr.cornell.edu 9 one could question whether they are really as good as they respond 24 hours a day? Panelists concluded that not many say they are. operators monitor comments and respond 24 hours a day. Participants noted that consumers are king, in the sense Instead, they answer emails during a set schedule. that they can say how good you are and do so publicly. The The jury is still out on whether virtual worlds, such as social media provide opportunities for consumers to write Second Life, can be a marketing force for existing hotels. A about their experiences at hotels, restaurants, and other trav- participant thought that Second Life might be a boon for el products—which is a vital role in the selection decision. chains that develop virtual hotels. Given that Second Life’s For example, when consumers can see what other consum- residents (their avatars) can explore, meet other residents, ers are saying on the TripAdvisor or Travelocity websites, say, socialize, and participate in individual and group activities, hundreds or thousands of positive comments, they can be they can also create and trade virtual property and services persuasively influenced to make certain selections. with one another, and they can travel throughout the virtual One participant said that his hotel group uses social world. At least one major hotel operator has “built” hotels media to track changes in booking patterns. Social media on the Second Life website. Despite the activity, Second Life can offset problems with uneven formal hotel ratings. He does not seem to be growing fast. Furthermore, Second Life said, for example, that his global group has a 5-star boutique offers limited demographic depth, because only certain types hotel in Lijiang, China. Another hotel in that market is of person uses it. nominally a 5-star hotel, although the competitor clearly is Roundtable participants then discussed ways that hotel not of the same standard. Words can be deceptive because companies could connect on Facebook. A large number of of the efforts of copywriters. If travelers are not discerning, hotel guests and managers have no inkling of life before they arrive to find that that hotel is not of 5-star quality, as email or mobile phones, and their perspective on social they might have expected. By way of explanation, a 5-star media, such as Facebook, is different from those who can hotel in China means a big room, but it does not necessarily remember rotary-dial telephones. The challenge in using mean a quality experience. On the other hand, international Facebook for commercial purposes is that people will not hotel group operators manage the experiences of their guests. like it if it is corporatized. Moreover, if too many people are The question of whether there should be ratings by connected in a Facebook site, it gets too confusing. people who participate in the social media highlights an Some hotels have a presence in Facebook to ask guests important demographic gap in social media users. A round- whether they want to be a fan, and be proactive in adding table participant answered no, with regard to social media their comments. A hotelier participant mentioned that his ratings, because a large group of people who travel do not hotel group has a Facebook page to create corporate social participate in social media. This is the group over approxi- responsibility (CSR), and build up number of fans, who want mately 55 years old, which is an important segment for many to go to the group’s properties. hotel operators and service providers. Participants also noted that social media are more Roundtable participants emphasized that five years important in Asia Pacific than in the U.S. or Europe. It was from now, the social media may be different. There may be mentioned that Facebook users have higher education and more formal social media sites, or user comments might higher income compared to MySpace users, who are more of be moderated rather than the present day’s free-for-all. For the general public and U.S.-centric. About 80 to 90 percent example, Lonely Planet, one of the world’s prominent guide- of the people on MySpace are Americans. Some participants books for travel advice and information, has moved from found Twitter to be gimmicky. However, the panel noted a book form to the web. If travelers consult Lonely Planet, trend for the younger generation abandoning Facebook for they will know what to experience. Instead of presenting Twitter, especially in Hong Kong. what could be too much information, a site like this offers a The random nature of social media commentaries is a filter so people that people can be assured of getting relevant challenge for hotel marketers. One participant mentioned information. that he does not know the criteria used in comments in Perhaps the most challenging issue relating to social Facebook or any social media—nor is there a way to find out. media is what to do when an operation has been flamed, On the other hand, the criteria for professional rating orga- particularly if the review seems unfair or baseless. Thus, the nizations are known and consistent anywhere in the world. question is, should management respond to comments on The comments in TripAdvisor are more emotional and the social media and, if so, is this beneficial for the organi- unstructured, and not many people can express themselves zation? The participants felt that it is important to correct the way the hotels would like. Thus, these hotels have to go misinformation but better to remain silent on negative guest to marketers, who can add structure and make sense of the postings. Another issue arises because of the 24/7 nature of comments made in the social media. the internet. How many corporate communication people 10 The Center for Hospitality Research • Cornell University The roundtable participants generally thought that move away from description. Some participants observed hotels should do what they can to respond to negative that what travelers want is a “trusted friend.” That concept comments. Social media should become a part and parcel has changed over the years, however. Many people in their of what a hotel and restaurant do, for example, in marketing 20s and 30s have many virtual friends whom they have never and sales. Participants discussed whether hotels need a met. Thus, their concept of a trusted friend differs from that dedicated team to respond to the comments in social media of older generations. The generation today does not have and, more generally, who is going to own it? One participant traditional pen pals of yesterday. said his hospitality group goes into its website half a dozen Rating and Ranking via Mobile Phones times a day to check on feedback and respond to comments. Another participant opined that every hotel should look Roundtable participants then discussed mobile phones, into social media, and create small teams of five or six which can provide timely information. At Priceline.com, a young people to look into social media and respond to the substantial percentage of same-day bookings come through comments. iPhone and Blackberry. Issues surrounding smart phones are Managing negative comments in social media is a par- an extension of existing web challenges, with the added fac- ticularly vexing issue. A team can read Facebook, but what tor of time pressure and, perhaps, an information deficit. happens when a hotel receives 800 negative comments out A participant illustrated these two factors as follows. of 1,000 comments given? Something has to be done about it, Say that a person misses a flight or lands in an unfamiliar but the response has to be handled carefully. Often enough, city and is looking for a hotel room. That person will pull when you respond, the issue becomes a debate, which can out the smart phone and look for hotel locations and prices, quickly deteriorate into a flame war. Perhaps for this reason, probably by using Priceline or another online travel agent. China banned Facebook for a time. One participant offered The traveler most likely will not even bother to look at the a curious observation about Facebook: people asked more hotel advertisements on the airport walls or consult with questions rather than give positive or negative feedback. the airport’s hotel booking counter—let alone go surfing on That stood in marked contrast to TripAdvisor. hotel websites. This approach can also be used for searching Hotels can use social media to create fan sites, to offer for other services, such as bars or restaurants, similar to the promotions, and to provide business opportunities but this service provided by Urbanspoon, which has developed a approach can also create problems if not properly managed. popular iPhone application for getting restaurant informa- The internet allows for considerable creativity. For example, tion and recommendations. One catch to that scenario is Holiday Inn tracked where candidate Barack Obama stayed that not many people in Asia would fly to another country during his trips during the U.S. presidential election cam- without booking a hotel. It was also noted that many con- paign, and distributed the video on Facebook and MySpace. sumers do not have the time to look at ratings and they may Hotels can also use social sites and YouTube internally, for look for a branded hotel on a Google map, because that’s an example, to distribute training tools. expedient way to do it. In one participant’s view, a hotel company’s fate de- Small Group Brainstorming Sessions: pends heavily on what people are looking for. Certainly, the What Is Missing in Ratings Systems information on social media sites may need to be validated. Participants were divided into three brainstorming sessions In contrast to social media, with formal rating systems, you to discuss what was missing from the ratings system. Their know what is experienced. Social media such as Facebook reports are as follows. and TripAdvisor are good resources, but they are not scoring the same thing as the ratings and rankings by professional group 1 organizations. Social media are scoring the most popular This group thought that the key question is, how important hotels, not what are the best. are the numbers in the rankings and which are important There was a suggestion to show all different rankings to for evaluating performance? At the same time, they see a give consumers a full spectrum of views and comments. The need for one rating system applicable for one customer in all social media, such as Facebook and TripAdvisor, can give locations. hoteliers, consumers who stay in the hotels, and travel agents Ranking of hotels depends on values and perceptions. opportunities to comment and react. For example, hotels Currently, there is a global inconsistency in rankings of may say that they change mattresses frequently and use the hotels and restaurants in one city to the next. The industry best linen, and consumers can give their feedback. However, needs global criteria or uniform benchmarks, which could a participant commented that people have different require- remove the variance found in different cities. Such a tax- ments, for example, beds and pillows are different for differ- onomy should be endorsed by the relevant authorities and ent people. A challenge here is whether the industry should be administered by neutral parties such as industry associa- Cornell Hospitality Roundtable Proceedings • March 2010 • www.chr.cornell.edu 11 tions. It is advisable to have an association, which will more This cross tabulation would undoubtedly help both sets of likely have better influence with the national governments, organization to better promote their services. rather than private enterprise. Another suggestion is to group 3 have the national tourism organizations rank, endorse, and Like the other two groups, this group identified the need for validate results of the rankings. a unified rating system that covers all cultural and geograph- Given the inconsistency in ratings, it’s not surprising ical scales. However, this group thought that the industry that there seems to be no clear understanding of criteria should be divided into two groups, according to market used for rankings. The stars awarded by agencies other than scale, and the ranking methodology would be applied differ- Forbes and Michelin are based on experiences, which could ently to these two distinct sets of hotels. One group would lead to misrepresentation. It is therefore important to com- be the 5-star or deluxe hotels, and the other group is all the municate and explain the rankings clearly, but also concisely. other hotels from upscale down to budget. These panelists Rankings would be appropriate in several areas that are thought the deluxe hotel ratings should be audited by exter- now not rated and ranked, namely, impact of the hospitality nal auditors. services on environment and the security of the hospitality Even if rating systems cannot be unified internationally, facilities. These need to be measured and publicized along the group thought it worthwhile to have a uniform rank- with the professional rankings currently in place. Even as ing system across nations with their own systems. Thus, for security issues gain importance, there are no global bench- example, 3 stars in India should mean the same thing as 3 marks for security. Security needs to be on the checklist for stars in China. ranking hotels, along with the environmental impact. Finally, this group thought it would be worthwhile to The ratings as presently constituted should be adjusted conduct rigorous research on how the ranking systems affect for locality. Although some service aspects are universal, the ROI, and the impact of social media ranking on the hospital- rating systems also need to consider cultural issues. What ity business. is ranked in North America or Europe may differ culturally from what is ranked in Asia. Thus, rating systems need cul- Conclusion: The Power of Social Media tural sensitivity. By the same token, there is a need for rank- Roundtable participants concluded that the most power- ing for restaurants that captures a city’s or region’s cuisine. ful promotional tool is word of mouth from a friend, and The ranking should not be just for luxury-dining restaurants social media are an extension of this. Service providers but ethnic restaurants should also be considered. should conduct surveys of past customers, and then use this Finally, this group suggested a need to measure the im- information—perhaps by using a call center to ask respon- pact of the social media so as to understand its importance dents questions. Such an effort would have to take into for industry. account different cultural standards. This is because different group 2 nationalities grade differently. For example, Asians who have This group observed that there is no hotel ranking system experienced a good hotel stay will tend to say “no comment” that can be compared to the Michelin ranking system for or “not bad,” but Americans will offer positive comments for restaurants. Even though there is no single system that can the same level of service. satisfy everyone, the industry needs international ratings In conclusion, we must underline the often repeated and rankings to partner together with TripAdvisor and other theme that the industry lacks uniform global criteria with social media to get a spectrum of views and comments. regards to ratings and rankings of hotels and restaurants. All Many customer comments leave hotel and restaurant three brainstorming groups highlighted the need to stan- operators puzzled at how they might make adjustments. This dardize these rating systems. As far as we know, the idea of group wondered how hotels and restaurants could get cus- setting up complementary ratings on security and environ- tomers offer more information about themselves, so as to be ment is novel, but those ratings would respond to guests’ able to respond better to the customers’ stated needs. Know- current concerns. ing something even as basic as a postal code would allow How the new social media are shaping ratings is a hotel and restaurant operators to determine what products major challenge. Many participants expressed the need for would meet a particular person’s needs. organizations and bodies such as Cornell-Nanyang Institute Even more intriguing would be the ability to cross-ref- of Hospitality to work together with the industry in the erence how customers rate hospitality facilities with where Asia Pacific region to better understand how these may be they spend their money. One suggestion here is that hotels achieved. This roundtable has certainly helped to clarify and could work with credit card companies, such as American raise important issues regarding ratings and rankings of the Express, which know how people are spending their money. hospitality businesses, particularly in the Asia Pacific and is a step in the right direction towards improving the emerging rating and ranking of Asian hospitality organizations. n 12 The Center for Hospitality Research • Cornell University www.h.hootetelslscchhooool.lc.coornrneelll.le.edduu/e/exexceecedd The Oce of Executive Education facilitates interactive learning opportunities where professionals from the global hospitality industry and world-class Cornell faculty explore, develop and apply ideas to advance business and personal success. The Professional Development Program The Professional Development Program (PDP) is a series of three-day courses oered in nance, foodservice, human-resources, operations, marketing, real estate, revenue, and strategic management. Participants agree that Cornell delivers the most reqarding experience available to hospitality professionals. Expert facutly and industry professionals lead a program that balances theory and real-world examples. The General Managers Program The General Managers Program (GMP) is a 10-day experience for hotel genearl managers and their immediate successors. In the past 25 years, the GMP has hosted more than 1,200 participants representing 78 countries. Participants gain an invaluable connection to an international network of elite hoteliers. GMP seeks to move an individual from being a day-to-day manager to a strategic thinker. The Online Path Online courses are oered for professionals who would like to enhance their knowledge or learn more about a new area of hospitality management, but are unable to get away from the demands of their job. Courses are authored and designed by Cornell University faculty, using the most current and relevant case studies, research and content. The Custom Path Many companies see an advantage to having a private program so that company-specic information, objectives, terminology nad methods can be addressed precisely. Custom programs are developed from existing curriculum or custom developed in a collaborative process. They are delivered on Cornell’s campus or anywhere in the world. Cornell Hospitality Roundtable Proceedings • March 2010 • www.chr.cornell.edu 13 Cornell Hospitality Reports Index www.chr.cornell.edu 2010 Reports Vol. 9, No. 17 Cases in Innovative Practices in Hospitality and Related Vol 9, No. 8 Effects of Menu-price Formats Vol. 10, No. 4 Cases in Innovative Services, Set 1: Aqua by Grandstand, on Restaurant Checks, by Sybil S. Yang, Practices in Hospitality and Related Brand Karma, Capella Hotels & Resorts, Sheryl E. Kimes, Ph.D., and Mauro M. Services, Set 2: Brewerkz, ComfortDelgro EnTrip, Hotels.com Visualiser, Luggage Sessarego Taxi, DinnerBroker.com, Iggy’s, Jumbo Club, Royal Plaza on Scotts, Tastings, Seafood, OpenTable.com, PriceYourMeal. Tune Hotels, and VisitBritain.com, by Judy Vol 9, No. 7 Customer Preferences for com, Sakae Sushi, Shangri-La Singapore, A. Siguaw, D.B.A., Cathy A. Enz, Ph.D., Restaurant Technology Innovations, by and Stevens Pass, by Sheryl E. Kimes, Sheryl E. Kimes, Ph.D., Rohit Verma, Michael J. Dixon, Sheryl E. Kimes, Ph.D., Ph.D., Cathy A. Enz, Ph.D., Judy A. Ph.D., and Kate Walsh, Ph.D and Rohit Verma, Ph.D. Siguaw, D.B.A., Rohit Verma, Ph.D., and Kate Walsh, Ph.D Vol 9 No 16 The Billboard Effect: Vol 9, No. 6 Fostering Service Excellence Online Travel Agent Impact on Non- through Listening: What Hospitality Vol. 10, No. 3 Customer Preferences OTA Reservation Volume, by Chris K. Managers Need to Know, by Judi Brownell, for Restaurant Brands, Cuisine, and Anderson, Ph.D. Ph.D. Food Court Configurations in Shopping Centers, by Wayne J. Taylor and Rohit Vol 9 No 15 Operational Hedging and Vol 9, No. 5 How Restaurant Customers Verma, Ph.D., Exchange Rate Risk: A Cross-sectional View Online Reservations, by Sheryl E. Examination of Canada’s Hotel Industry, Kimes, Ph.D. Vol. 10, No. 2 How Hotel Guests Perceive by Charles Chang, Ph.D., and Liya Ma the Fairness of Differential Room Pricing, Vol 9, No. 4 Key Issues of Concern in by Wayne J. Taylor and Sheryl E. Kimes, Vol 9, No. 14 Product Tiers and ADR the Hospitality Industry: What Worries Ph.D., Clusters: Integrating Two Methods for Managers, by Cathy A. Enz, Ph.D. Determining Hotel Competitive Sets, by Vol. 10, No. 1 Compendium 2010 Jin-Young Kim and Linda Canina, Ph.D Vol 9, No. 3 Compendium 2009 2010 Roundtable Proceedings Vol 9, No. 13 Safety and Security in U.S. Vol 9, No. 2 Don’t Sit So Close to Me: Vol. 2, No. 1 2009 Sustainability Hotels, by Cathy A. Enz, Ph.D Restaurant Table Characteristics and Guest Roundtable: The Hotel Industry Seeks the Satisfaction, by Stephanie K.A. Robson Elusive “Green Bullet,” chaired by David Vol 9, No. 12 Hotel Revenue Management and Sheryl E. Kimes, Ph.D. Sherwyn, J.D. in an Economic Downturn: Results of an International Study, by Vol 9, No. 1 The Job Compatibility 2009 Reports Sheryl E. Kimes, Ph.D Index: A New Approach to Defining the Hospitality Labor Market, by William J. Vol. 9, No. 18 Hospitality Managers and Vol 9, No. 11 Wine-list Characteristics Carroll, Ph.D., and Michael C. Sturman, Communication Technologies: Challenges Associated with Greater Wine Sales, by Ph.D. and Solutions, by Judi Brownell, Ph.D., Sybil S. Yang and Michael Lynn, Ph.D. and Amy Newman 2009 Roundtable Proceedings Vol 9, No. 10 Competitive Hotel Pricing in No. 3 Restaurants at the Crossroads: A Uncertain Times, by Cathy A. Enz, Ph.D., State By State Summary of Key Wage-and- Linda Canina, Ph.D., and Mark Lomanno Hour Provisions Affecting the Restaurant Industry, by Carolyn D. Richmond, J.D., Vol 9, No. 9 Managing a Wine Cellar and David Sherwyn, J.D., and Martha Using a Spreadsheet, by Gary M. Lomanno, with Darren P.B. Rumack, and Thompson Ph.D. Jason E. Shapiro 14 The Center for Hospitality Research • Cornell University Vol 8, No. 18 Forty Hours Doesn’t Work No. 2 Retaliation: Why an Increase in for Everyone: Determining Employee Vol. 8, No. 10 Private Equity Investment Claims Does Not Mean the Sky Is Falling, Preferences for Work Hours, by Lindsey A. in Public Hotel Companies: Recent Past, by David Sherwyn, J.D., and Gregg Zahn and Michael C. Sturman, Ph.D. Long-term Future, by John B. Corgel, Gilman, J.D. Ph.D. Vol 8, No. 17 The Importance of 2009 Tools Behavioral Integrity in a Multicultural Vol. 8, No. 9 Accurately Estimating Tool No. 15 The Eight-Step Approach Workplace, by Tony Simons, Ph.D., Ray Time-based Restaurant Revenues Using to Controlling Food Costs, by J. Bruce Friedman, Ph.D., Leigh Anne Liu, Ph.D., Revenue per Available Seat-Hour, by Gary Tracey, Ph.D. and Judi McLean Parks, Ph.D. M. Thompson, Ph.D., and Heeju (Louise) Sohn Tool No. 14 Revenue Management Vol 8, No. 16 Forecasting Covers in Hotel Forecasting Aggregation Analysis Tool, by Food and Beverage Outlets, by Gary M. Vol. 8, No. 8 Exploring Consumer Gary M. Thompson, Ph.D. Thompson, Ph.D., and Erica D. Killam Reactions to Tipping Guidelines: Implications for Service Quality, by Tool No. 13 The Wine Cellar Management Vol 8, No. 15 A Study of the Computer Ekaterina Karniouchina, Himanshu Tool (part of Hospitality Report Number Networks in U.S. Hotels, by Josh Ogle, Mishra, and Rohit Verma, Ph.D. 9), by Gary M. Thompson, Ph.D. Erica L. Wagner, Ph.D., and Mark P. Talbert Vol. 8, No. 7 Complaint Communication: Tool No. 12 Measuring the Dining How Complaint Severity and Service Experience: The Case of Vita Nova, by Vol 8, No. 14 Hotel Revenue Management: Recovery Influence Guests’ Preferences Kesh Prasad and Fred J. DeMicco, Ph.D. Today and Tomorrow, by Sheryl E. Kimes, and Attitudes, by Alex M. Susskind, Ph.D. Ph.D. 2008 Roundtable Proceedings Vol. 8, No. 6 Questioning Conventional Vol 8, No. 13 New Beats Old Nearly Wisdom: Is a Happy Employee a Good Vol 8, No. 20 Key Elements in Service Every Day: The Countervailing Effects of Employee, or Do Other Attitudes Matter Innovation: Insights for the Hospitality Renovations and Obsolescence on Hotel More?, by Michael Sturman, Ph.D., and Industry, by, Rohit Verma, Ph.D., with Prices, by John B. Corgel, Ph.D. Sean A. Way, Ph.D. Chris Anderson, Ph.D., Michael Dixon, Cathy Enz, Ph.D., Gary Thompson, Ph.D., Vol. 8, No. 12 Frequency Strategies and Vol. 8, No. 5 Optimizing a Personal Wine and Liana Victorino, Ph.D. Double Jeopardy in Marketing: The Cellar, by Gary M. Thompson, Ph.D., and 2008 Reports Pitfall of Relying on Loyalty Programs, by Steven A. Mutkoski, Ph.D. Michael Lynn, Ph.D. Vol 8, No. 19 Nontraded REITs: Vol. 8, No. 4 Setting Room Rates on Considerations for Hotel Investors, by Vol. 8, No. 11 An Analysis of Bordeaux Priceline: How to Optimize Expected John B. Corgel, Ph.D., and Scott Gibson, Wine Ratings, 1970–2005: Implications for Hotel Revenue, by Chris Anderson, Ph.D. Ph.D. the Existing Classification of the Médoc and Graves, by Gary M. Thompson, Ph.D., Stephen A. Mutkoski, Ph.D., Youngran Bae, Liliana Lelacqua, and Se Bum Oh Cornell Hospitality Roundtable Proceedings • March 2010 • www.chr.cornell.edu 15 www.chr.cornell .edu