Star ratings are no longer the prerogative of hotels. With the introduction of Booking.com’s new quality classification system, vacation rentals are set to get their own star ratings, too.
The leading OTA aims to get better at setting guest expectations by scoring vacation rentals on a scale of 1-5 with the help of powerful artificial intelligence solutions.
But how can property managers prepare for this change? And what brought it about? Let’s take a look at the meaning of star ratings – from hotels to vacation rentals.
Star ratings have been used to classify hotels based on quality for decades. There is no unified, international standard: rating schemes around the world vary depending on the organisations that use them.
In Europe, hotel star ratings are given out by local government agencies and independent organisations. Some countries – like Belgium, Denmark, Greece, Italy, Malta, Netherlands, Portugal, Spain and Hungary – have laws defining a single public standard for hotel ratings. In an attempt to harmonise hotel classification, organisations like the European HotelStars Union have developed common sets of criteria for participating countries.
So what do the stars mean? Generally, the more stars a hotel has, the more luxurious it is and the more services it offers. One-star hotels have limited facilities, amenities and services, while five-star hotels have a wide range of extra services, high-quality amenities and luxurious facilities. The role of the stars is to give guests a bit of context and to let them know what experience they can expect from their stay.
Since hotels rely on OTAs for a large portion of their bookings, star ratings have gained a new significance on booking sites.
Here’s where it gets confusing. When a traveller visits an OTA website, they will see two types of ratings next to each hotel listing. One is the star rating, which indicates quality according to industry criteria, and the other is the review score, which is an average of the ratings given to the hotel by travellers.
While the two types of ratings are very different in nature, they both contain valuable information for future guests. Their most important role is to set expectations, but they also serve as search filters. For example, travellers can narrow down their search to find exclusively 4-star hotels or hotels that received X score or higher from reviewers.
To make things even more complicated, not all OTAs use the same scale for review scores. For example, Booking.com gives guests the option to rate properties on a scale of 1-10, while Tripadvisor uses a scale of 1-5.
In contrast to the long-standing practice of ratings for hotels, so far, all attempts to establish a rating system for vacation rentals have failed. The world’s biggest property managers like Sykes Cottages have started introducing their own ratings to provide their guests with consistency of experience, but an industry-wide solution has never been found.
The first large-scale effort to create a global vacation rental rating system comes from Booking.com.
At the 2019 Vacation Rental World Summit, Alessandro Pacilio, Senior Product Marketing Manager at Booking.com revealed that the company was testing what they call a “quality classification system” exclusively for Booking.com’s vacation rental partners. The new system is 100% technology-driven: Booking.com uses Artificial Intelligence to categorise vacation rentals based on around 400 different factors.
In the past weeks, Booking.com has been A/B testing and slowly rolling out the new feature. A number of “stars” (shaped more like dots) from 1 to 5 has started appearing next to vacation rental properties. This is how Booking.com explains the meaning of the dots: “Awarded to home and apartment-like properties by Booking.com. These represent quality ratings based on factors like facilities, size, location, and service.”
The new rating system may be fully AI-powered, but Booking.com is open to feedback. As travellers scroll down on the property page, they’ll find a short message saying: “Booking.com rated this property’s quality as 4 out of 5 based on factors like facilities, size, location, and services. Do you agree with this rating based on what you see on this page?”
Pacilio explained that “matching guest expectations” is of utmost importance to Booking.com, which is why they’ve introduced the first large-scale rating system in the VR industry. He also added that the next step in the process will be to turn the ratings into an actionable opportunity for property managers. “We will release something in the Extranet which is going to help you and guide you to improve your quality score for the properties in your portfolio,” he said.
The new star rating system for vacation rentals gives property managers the opportunity to compete directly with hotels.
As Booking.com Vice President Olivier Grémillon told Skift: “Before, when someone was searching on Booking for three-, four- or five-star, no vacation rentals were showing up. Now when they search, the vacation rentals are showing up, the conversions are going up, and everybody benefits.”
Until Booking.com introduces the tool that will help property managers improve their listings and get better star ratings, there are a few things that PMs can do to benefit from the new rating system.
It’s time to double-check your listings and see if you’ve added all the amenities that your vacation rentals have – whether that’s something as seemingly insignificant as a toaster. You never know what the algorithm will deem important! To get data-driven tips on how to improve your listings, have a look at your Booking.com Opportunities.
If you need more help optimising your Booking.com listings, check out our ebook Masters of Distribution!