September 25, 2015
Ritz-Carlton was ranked as the best and most consistent brand
A new study on consumer satisfaction, with a concentration on luxury hotels and resorts, reveals surprising rankings for some of the most well-known brands.
Some established and recognizable brands did not perform as well as expected, with Four Seasons Hotel and Resorts in thirteenth, Peninsula twentieth, St. Regis at twenty-sixth and Waldorf Astoria barely placing, at fiftieth. The study, undertaken by London-based consultancy Luxury Branding, consists of an analysis of 2.25 million TripAdvisor reviews, suggesting that results may tell more about the way a younger demographic experiences a luxury brand.
"Whilst there is undoubtedly a prejudice within the luxury community that ultra-high net-worth individuals do not view or contribute reviews on TripAdvisor, these individuals are not, in fact, the main customer group of luxury hotels," said Piers Schmidt, founder and chairman of Luxury Branding, London. "The average suite ratio for luxury hotels in London, for example, is 29%. This means that 71% of the customers are staying in standard or deluxe rooms. Luxury has never before been consumed so en masse and if it is the masses who go to TripAdvisor to write and read reviews, this would suggest that the study is at least representative of the majority of patrons.
Luxury Branding’s “World’s Most Popular Hotel Brands 2015” looks to TripAdvisor reviews to check brand reputation and internal rating systems against public perception, investigating whether a consistent brand experience can be executed successfully and with integrity across dozens of properties. To do this, Luxury Branding compared reviews of individual hotels against all the others in the area, noting average rank of a brand’s hotels and the range between its best- and worst-ranked properties.
Distant and inconsistent
Today, travelers rely heavily upon recommendations from friends and family and other testimonials; the rise of Airbnb can be attributed in part to the trust consumers have in one another to provide valuable and accurate information in reviews. Accordingly, a look at reviews on peer review sites such as TripAdvisor may reveal the different attitudes that younger travelers have regarding luxury hotels.
Fairmont Turkey
For young HENRYs, the “luxury” label does not carry the same mystique as it has in the past or that it might for older consumers. Instead, the word sometimes connotes over-priced and unaffordable goods even more than it defines craftsmanship or value. For these consumers, cost, brand values and personability are more significant than legacy (see story).
"Luxury price tags imply correspondingly high expectations and therefore greater potential for disappointment," Mr. Schmidt said.
While Four Seasons, Peninsula and other brands did not perform as expected, other established names, such as Mandarin Oriental, Shangri-La and Ritz-Carlton, placed very well. Ritz-Carlton took the top spot and also had the smallest range in rankings across different locations, suggesting that consistency is key in winning over young consumers everywhere.
Mandarin Oriental Boston
While the consistency of Ritz-Carlton accounts partially for its top ranking, lower-ranking luxury brands were also found to be inconsistent. In the case of Peninsula, hotels in Asia were much more favorably reviewed, with Paris and Beverly Hills, CA, locations performing the worst among the brand’s offerings.
Peninsula Paris
In general, larger chains had more trouble with consistency and suffered in the ratings for it. Fairmont Hotels & Resorts, ranked 49th, has 74 locations and had a range of 764 points. Four Seasons, with 94 branches, had a range of 357.
Brands such as Raffles, Oberoi, Rocco Forte, The Dorchester Collection and Capella, all of which have fewer than 20 hotels, had much lower rankings for their best-reviewed hotel but far fewer hotels have a lower rank, resulting in top 10 finishes.
View from Four Seasons Cairo
Consumers grow to associate brand names with particular experiences, so it is important that hotels, as well as brands in other sectors, are able to deliver the same brand experience in all locations.
Keep calm and carry on
This is not the first time that Ritz-Carlton has been recognized for its consistency and excellence.
For its 19th “North America Hotel Guest Satisfaction Index Study,” released in July, J.D. Power gathered responses between June 2014 and May 2015 from more than 62,000 guests in Canada and the United States who stayed at a hotel in North America between May 2014 and May 2015.
Questions measured overall guest satisfaction across eight hotel segments: luxury, upper upscale, upscale, upper midscale, midscale, economy/budget, upper extended stay and extended stay. It looked at seven key factors in each segment, including reservation, check-in/check-out, guest room, food and beverage, hotel services, hotel facilities and cost and fees. Satisfaction is calculated on a 1,000-point scale.
Out of a possible 1,000 points, satisfaction reached 804 across all hotels studied in 2015, representing a growth of 20 points from 2014 and marking the first time the index exceeded 800. In the luxury category and across all price points, The Ritz-Carlton had the highest satisfaction index results, with 892 points (see story).
Hotel brands are increasingly at the mercy of travel reviews, but this does not have to be a cause for alarm.
According to TripAdvisor, 89 percent of travelers say that reviews are influential, and Web in Travel found that 53 percent of consumers will ignore a property if reviews are unavailable. Rather than ceding further digital ground to online travel agencies keen to the power of reviews, hotel brands should actively promote guest appraisals on their Web sites (see story).
"We would prefer to refer to this as a wake-up call for the luxury segment as a whole but by no means is it an emergency for these brands, Mr. Schmidt said. "Some individual properties for [Fairmont, Waldorf Astoria, St. Regis and others] scored extremely highly, often ranking as the top hotel in its location.
"However, this is a Brand survey and consistency was key to securing a high weighted ranking. It only took a small number of sub-standard hotels in a brand’s inventory to pull down their overall ranking, which is what you are seeing with the results for Four Seasons, Waldorf Astoria and St. Regis. As they have grown in size, the data suggests that brand consistency has been a considerable challenge.
"We would maintain that these brands may still excel at cosseting their elite guests but with the consumption of luxury becoming ‘massified', it’s vital that luxury brands realise they can no longer ride on their reputations, reinforced by a small number of loyal devotees only. The impressions of the wider customer base are the majority and this previously silent cohort now has the means to share their opinions with the world at large. Woe betide brands that ignore this new reality."
Final Take
Forrest Cardamenis, editorial assistant on Luxury Daily, New York
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