2.
Star Ratings
AAA Tourism operates the NSW
star classification system which is published online and in the NRMA
Accommodation Guide. The
various rating are defined as follows:
1 star | Establishments offering a basic standard of accommodation. Simply furnished. Resident manager. |
2 star | Well maintained establishments offering an average standard of accommodation with average furnishings, bedding and floor coverings. |
3 star |
Well appointed
establishments offering a comfortable standard of
accommodation, with above average furnishings and floor
coverings. |
4 star |
Exceptionally well
appointed establishments with a high level of facilities,
plus quality furnishings offering a high degree of comfort.
High standard of presentation and guest services
provided. |
5 star |
International
standard establishments offering excellent facilities,
outstanding appointments, furnishings and décor with an
extensive range of first class guest services.
A number and variety of room styles and/or suites
available.
Choice of dining facilities, 24 hour room service,
housekeeping and valet parking.
Porterage and concierge services available as well as
a dedicated business centre and conference facilities. |
½ star |
The additional half
star indicates establishments offering similar standards to
the full star, but offering more comfort by providing
additional features and items. |
Different guests demand
different standards of quality and service.
Some guests will only stay at 4 and 5 star properties.
Others are happy with the lower tariff offered by 1 and 2
star properties.
Standard economic theory suggests that the lower the price the
higher the demand.
However, in the accommodation industry, the reverse is the case.
The more expensive 4 and 5 star properties have consistently
enjoyed higher occupancy rates than the less expensive 2 and 3 star
properties.
Star | Occ % |
---|---|
1 | 15.7 |
2 | 43.9 |
3 | 49.2 |
4 | 61.1 |
5 | 46.5 |
The table indicates that
As expected, the higher the
star rating the higher the tariff.
In non-Sydney motels the average tariffs for the 2012/13
financial year are set out below:
Star | Tariff |
---|---|
1 | $79.51 |
2 | $83.74 |
3 | $113.74 |
4 | $160.93 |
5 | $426.39 |
As accommodation revenue per room can be expressed as Occupancy Rate x Tariff the annual revenue generated by each room can be expressed as follows:
Star | Revenue |
---|---|
1 | $4,569 |
2 | $13,403 |
3 | $20,432 |
4 | $35,899 |
5 | $72,408 |
On average, each room in a 3
star country motel generates $7,020 more in accommodation revenue
annually than each room in a 2 star country motel.
The really big jump is between
the 3 and 4 star motels, with 4 star rooms generating $15,466 more
in annual accommodation revenue than 3 star rooms.
A 20 room motel upgrading from 3 to 4 stars might therefore
enjoy a revenue increase from $408,640 to $717,980.
Most of this revenue goes
straight to profit, because the costs of servicing a 4 star room are
little different to the costs of servicing a 3 star room.
This is an important point that motel buyer should bear in mind. Renovations that lead to star rating upgrades are generally very successful, and result in increased revenue and profits.