Get the latest updates as we post them — right on your browser

. Last Updated: 07/27/2016

Hotel Rating Seeks to End Star Lottery

For MTNational Hotel general director Yury Podkopayev shows off the hotel's new five-star state classification it was awarded last week.
The country's leading hotels may have been known by their four or five stars for years, but it was not until last week that certificates of the first unified national hotel classification system were awarded.

The generous star ratings often given to unbranded Russian hotels have long raised eyebrows among international travelers used to the standards of Western branded hotels. To help bring an end to the star-ratings lottery and to assist the country in reaching its target of attracting 5 million visitors annually by 2010, a new system for hotel classification has been developed by the department of tourism of the Economic Development and Trade Ministry.

Under the new system, classifications are awarded on the recommendation of a special department tourism committee, and for the first time representatives of the major international hospitality companies are an integral part of the process. The department's right to award classifications to applicant hotels was officially registered by the Justice Ministry in August.

The certification is only good for five years and can be revoked during that period if a hotel fails to meet standards during an annual inspection.

Until last summer there were four different national hotel certification systems, and as many as 30 different organizations could award stars.

"It was complete chaos. The situation desperately needed to be changed," said Yury Podkopayev, general director of Le Royal Meridien National Hotel, which last week was the first hotel to receive a state classification.

In keeping with their previous star ratings, the National, Baltschug Kempinski and the Golden Ring were awarded five stars and the President Hotel was demoted from five to four stars.

According to Natela Shengelia, who heads the department of tourism, the new system replaces the imperfect 1994 system, which was developed by Gosstandart (the State Committee on Standards), and will be the only national certification system in the country.

But since the unified state certification is voluntary and the other certifying bodies are likely to continue operating, hotel specialists remain skeptical that the new system will have much of an effect on the market.

"If you are an existing hotel that doesn't meet certain certification criteria, why would you volunteer to get certified?" asked Robert Stoddard, hotel development director at Colliers International. "But new hotels are more likely to apply since they have nothing to lose."

Indeed, of the 45 certification applications currently being considered, many of the hotels are brand-new and most are from the regions according to Margarita Nemolyayeva, one of the experts on the department of tourism's classification committee.

"Moscow hotels are far more inert. And many of them think they don't need a certification just by virtue of being in Moscow," she added.

Irina Kulagina, marketing director at Marriott Hotels Russia, said the new certification is likely to help local independent operators, while international hotel chains would not gain anything from participation.

However, she added that Marriott "does not exclude" the possibility of obtaining the state certificate, even though "it won't really affect our functioning in any way."

Michael Schlueter, the general manager of the Sheraton Palace Hotel, said the Sheraton appreciated the advantages that the creation of a unified system would have for international travelers. However, he added that since the Sheraton Palace was part of the U.S. corporation Starwood, its standards were examined by an international company appointed by Starwood and so it had no need to apply for a department of tourism classification.

A similar argument was put forward by Christian Szabo, the sales and marketing director of the Renaissance Hotel International Moscow.

"The RHI Moscow will not participate in this as the Renaissance brand is known by both national and especially international travelers for its high standards and level of service," he said.

Valery Maximov, general director of the Russian Sovetsky Hotel, currently with a three-star classification, was also unenthusiastic. "If it is going to be mandatory, of course we'll do it. But if not, we won't do it," he said. "It doesn't matter what certification you have as long as you meet your guests' needs."

But Vladimir Strzhalkovsky, deputy minister of Economic Development and Trade who heads the qualification group awarding certificates, said that even if many hotels do not participate just now, the new system is still a "step forward."

"Our certificates are awarded by a respected state body -- as is the common practice in many civilized countries. If a hotel wants to be certified by a no-name entity, it will only work against its reputation," he added.

There is currently no unified international hotel classification system, even though the possible emergence of one has been discussed for years.

"Standards are not even consistent within the European Union, despite all the recent attempts to change the situation," said Scott Antel, a partner with Ernst & Young's hospitality consulting group.

Nevertheless, Antel saw the new unified hotel classification system as a positive sign, signifying that the country is "trying to come in line with the existing general standards."

But he remained skeptical about the significance of star systems in general.

While star certifications work well for a standardized product, the "very mathematical infrastructure checklists" do not take into account more subjective service factors and are not really applicable to rate top properties, he said.

What's in a Hotel Rating Anyway?

There is no real international hotel ratings system. Ratings of hotels in different countries, if they exist, typically come from the government or quasi-government sources, independent ratings agencies or sometimes the hotel operators themselves.

Therefore, variations between countries' standards naturally exist. For example, in France the government conducts a star rating system ranging from one star for simple accommodation to four for a deluxe hotel. Hotels in Germany and some Scandinavian countries have a one- to five-star rating, which the government reviews every three years, while in Britain the Automobile Association, Royal Automobile Club and English Tourist Board have agreed to a standardized hotel rating system. In South America, hotels are typically granted a star ranking from the government tourism ministry at the date of the hotel's opening, which may not be modified as the property ages.

From the private sector there are the independent ratings guides such as the Michelin Red Guide, England's AA and RAC guides or in the United States the American Automobile Association guide. Others, for example Leading Hotels of the World or Relais and Chateaux, recommend hotels that they have selected to include in their guides that meet their requisite standards. These latter agencies are not entirely independent, since they receive a fee for agreeing to list the particular hotel in their guide and for bookings at the hotel via their reservation service.

The International Standards Organization and the World Trade Organization met in 1998 to jointly discuss harmonizing hospitality standards. However, the delegation got only so far as to recommend that as a first step standards be set in key areas of housekeeping, front office, and food and beverage and nothing was implemented.

Similarly, the European Union addressed the issue at a Forum in December 2002, but no definitive steps have since been taken towards creating a European-wide hotel standards system.

Scott Antel, partner and head of Ernst & Young's Russia/CIS hospitality consulting practice and Tanya Yegorsheva, a senior manager in the group.