Posted by: Carlos | January 30, 2011

Star-Grading News and Analysis

There has been much media speculation over the last few weeks about the future of the star-grading scheme in the UK with an announcement from the British Hospitality and Restaurants Association and an item in the Wales Tourism Alliance’s February Newsletter entitled UK Tourism Minister says he will Scrap Grading Schemes.

Why is this happening?

There are a number of converging forces at work here, summarised as follows:

1. The Department for Culture Media and Sport (DCMS) is due this month (February) to publish the UK Tourism Strategy for the next 4 years.

2. The PM in his speech on tourism last August called for the strongest possible tourism strategy with measures to stimulate the private sector in tourism.

3. He said the old model was too top-down, failing to incentivise innovation and local enterprise.

4. In its Business Plan DCMS seeks to strip away red tape and stimulate private sector investment to create conditions for tourism growth.

5. The sector should be free to drive its own success – with the Government only intervening where there is a real need.

6. This will enable the tourism sector to deliver faster, more balanced economic growth and streamline and refocus tourism organisations in the process.

7. Visit Britain and Visit England will have to find administrative cost savings of 50% over the next four years 2011-2014.

8. The ban preventing owners advertising their properties in Government i.e. State-aided publications if they have chosen (a) not to enter the National Quality Assurance Scheme or (b) to have their properties graded under alternative schemes, has been subject of a long-standing State aid complaint to the European Commission

9. The ruling from the Commission is expected to be in favour of the complainants, judging the practice to be anti-competitive under Competition Law Rules.

10. Removal of State support from the National Quality Assurance Scheme would be a rational response to this ruling.

11. It would leave property owners free to choose which scheme they wish to join (if any) and compare the different marketing opportunities available from each according to need and budget available.

12. Marketing opportunities under the National Quality Assurance Scheme no longer favour property owners. They have grown increasingly restricted and bear little resemblance to new opportunities available in the open market.

13. Amongst these opportunities is reputation management through social media and user reviews. The free Owners’ Centre introduced by TripAdvisor is a prime example.

14. DCMS has recognised the power of user reviews to deliver quality messages and while these are not yet perfect in an imperfect world, the National Quality Assurance Scheme also has its drawbacks and is a net cost to taxpayers.

The media speculation would appear, therefore, to be well founded.

What happens now?

Tourism authorities have been preparing for this since the State aid case gathered momentum. Here is a summary of what to expect:

1. Visit Wales will offer listings based on adherence to basic statutory requirements through self-assessement with a nominal fee payable and spot inspections over a two year period.

2. A version of the old grading scheme is likely to be trialled over the next 12 months and abandoned if there is insufficient support from property owners.

3. The Regional Tourism Companies will lose any remaining credibility as delivery agents for Visit Wales marketing as property owners seek more viable alternatives.

4. (Tourism Wales UK) will continue to recognise Visit Wales Star Gradings as long as the scheme exists with provision made for displaying AA Star Ratings in future.

5. Greater emphasis will be placed by (Tourism Wales UK) on user reviews working directly with Google Places and TripAdvisor.

6. The AA Star Ratings scheme shares quality standards in common with the National Quality Assurance Scheme and will remain unaffected.

7. Owners whose properties are assessed and recognised by Visit Wales can join the AA as Associate Members and have their current Visit Wales star gradings recognised.

8. Tourism businesses’ use of social media and user reviews in their own websites will form criteria for ‘Platinum’ in the new UK WelcomeWeb awards scheme.

Further information will be given here as soon as the UK Tourism Strategy 2011-2014 is published.

– End –

2011 Membership


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