Chapter 12: The Hospitality Sector

Question 1: Explain the difference between the categorization, classification and grading of accommodation.

Answer Guide: Categorization refers to the separation of accommodation into types (distinguishing between hotels, motels, boarding houses, guesthouses). Classification distinguishes different examples of accommodation on the basis of certain physical features, such as the number of rooms with private bath or shower and so on. Grading identifies accommodation according to certain verifiable features of the service offered.

Question 2: Airbnb has access to more properties than the leading hotel chains. What factors have led to the existence and continued growth of this competitor?

Answer Guide: Interest in the sharing economy has grown as platforms have made it easier, via apps, to access shared opportunities (consider Uber as well). Some market segments prefer the different type of experience gained when using Airbnb over a hotel. As Airbnb grew, so it also worked activity to address barriers (such as issues raised by cities over rental controls and room sale taxes). It has also included financial protection for the guest (by holding the fee for 24 hours after check-in) and by offering insurance for the host against property damage. It has also expanded its range of listing to include experiences such as sightseeing and classes delivered by local people.

Question 3: Several countries in Europe have a mandatory (rather than voluntary) grading system. What are the benefits of a mandatory system? Are there drawbacks to this?

Answer Guide: A mandatory system can ensure that the traveller can make comparisons across all hotels. It ensures that the system controller is aware of all properties being offered as tourist accommodation. While a mandatory system may be perceived as overly regulatory it does provide the visitor with a level of confidence when booking in advance.

There is a concern that the existence of review sights (such as TripAdvisor) is making the need for formal rating obsolete.