40% increase in business among small hotels rated in AAA after
hotels were awarded with classifications. Therefore, hotel ratings
functioning as a promotional tool might be associated with growth in
hotel business measured by volume of sales and occupancy rate.
Hotels also perceive ratings as a pricing tool. Israeli and Uriely
(2000) examined the impact of star ratings and corporate affiliations
on hotel room prices in Israel. It was found that price variations
could be partially explained by star ratings and the star rating system
was a significant predictor of hotels’ decision in setting prices.
Lollar’s (1990) exploratory study further supported this conclusion.
It was found that a hotel charged more once a higher level of
classification was awarded and in some countries four- or five-star
hotels could charge any price at their will. This research proposes that
changes in hotel performance are associated with service quality
improvement as a result of participating in the hotel rating system.
Fernandez and Bedia (2004) examined whether a hotel rating
system was a good indicator of its service quality and found that,
based on values of expectations and perceptions and their differences,
the ranking of the hotel groups did not correspond exactly to the
ranking of stars. They also found that customers from highly rated
hotels had negative differences between perceptions and expectations
indicating a demanding clientele.
In summary, the hotel rating system is one of many instruments
that the hotel industry uses as a guideline to reach an expected level of
service quality and to convey this message to the public. A conceptual
framework to examine the relationship among hotel rating systems,
service quality, and hotel performance is proposed in Figure 1. Hotel
rating systems are related to service quality improvement, while
service quality improvement is associated with changes in hotel
performance. It is suggested that hotel rating systems encourage hotel
operators to improve their service quality, which may lead to changes
in hotel performance.