Hotwire Breaks Brand Promise by Gutting Rating System

Hotwire, the opaque travel website created by Eric Grosse (Expedia President), Karl Petersen (TPG Partner), Greg Brockway (TripIt CEO) & Spencer Rascoff (Zillow CEO) was rated highest in customer satisfaction from 2006-2008 among independent travel websites by J.D. Power and Associates.

Eliminating specific criteria from hotel ratings leaves nothing but an empty and easily cracked brand promise
Photo Credit: DailyCraft | Flickr

Over the past year, I made 18 hotel bookings spanning 41 nights through Hotwire. Based on my most recent experience, however, the tenure of my loyalty is likely to be terminated. It is a shame as customer service was a traditional Hotwire strong point.

A few years ago, Hotwire made a mistake by booking me into a hotel that was incorrectly plotted on their neighborhood map. At the time, their customer care team immediately acknowledged the issue, refunded my booking, suppressed that property from being presented in the subsequent hotel search and provided a $50.00 booking credit for my troubles. The credit in particular was an unexpected and pleasant surprise.

Double Star-Crossed
My experience this week fell at the opposite end of the customer service spectrum. I booked a 3-star hotel in the Las Colinas area of Dallas for a client visit, knowing the area well and knowing that a variety of good 3-star hotels are located in that specific neighborhood. Much to my surprise, Hotwire confirmed a La Quinta.

I have no issue with La Quinta – they are a good chain that offers a consistent, quality product. The problem is that they clearly operate limited service, 2.5-star properties. If I had wanted to book a 2.5-star hotel, I could have selected that classification and paid 30% less per night.

Given Hotwire’s fundamental brand promise: a hotel matching a desired classification, located in a particular area for a specific price, I anticipated this issue could be cleared up with a simple phone call. Ultimately, Hotwire would prove that assessment to be incredibly naive.

Black Sheep of the Family
To confirm that I was not overreacting, I immediately checked Expedia, Hotels.com and Trip Advisor – knowing that they are all sister brands to Hotwire under the Expedia corporate umbrella. Sure enough, all three sites rated the hotel 2.5 stars.

I also checked Priceline for good measure as they also operate an opaque travel site – they too rated the hotel at 2.5 stars.

The issue appeared to be clear – Hotwire had misrepresented a 2.5-star hotel as a 3-star property.

Express Lane to Nowhere
Due to my booking frequency, my call was automatically channeled to Hotwire’s Express Lane queue. Customer Service Rep Brittany was extremely helpful – offering insightful remarks like, “We have a different criteria” – when asked to explain the difference between the Hotwire rating and those of Expedia, Priceline, etc. She also insisted that there were no standards for classifying 3-star hotels and that it would be impossible for me to determine if the hotel was a 2.5 or 3-star property until I personally visited the hotel.

It seemed apparent that Brittany was not able to distinguish between the hotel classification process that categorizes properties according to the facilities and services offered, as opposed to a customer rating, which measures satisfaction, regardless of the classification.

Brittany explained that to establish ratings, Hotwire only averaged the ratings of Expedia, Travelocity & Orbitz. The rationale was that they were the largest online travel sites. That no longer seems to be the case.

A quick search on compete.com revealed that since June, Expedia, TripAdvisor and Priceline are outpacing Travelocity and Orbitz in terms of unique site visitors.

There was no explanation why Hotwire would not use ratings from its sister companies, nor why the other Expedia owned sites would be in agreement and Hotwire would be alone in providing a higher rating.

It is particularly ironic that Hotwire apparently gives greater credence to the ratings assigned by competitors as opposed to its sister brands selling hotels. One would think that it would be much easier to defend the validity of a rating based on internal criteria and applied uniformly across a portfolio of brands under common management than ratings based on unknown criteria by unaffiliated competitors.

Reality Check
It was time to discontinue my conversation with Brittany and do some further background research before pleading my case further. I first decided to check how La Quinta describes its properties.

The La Quinta website and franchise collateral describes the chain as operating “limited-service hotels” and “mid-scale hotels without food and beverage” in the United States.

For La Quinta, a consistent brand experience is essential – properties failing to meet brand standards negatively impact the perception of the chain as a whole. Properties offering great service reflect positively on the brand.

However, La Quinta does not want hotels to start offering substantially upgraded facilities and unique services as they create guest brand expectations that will not be fulfilled at other properties in the chain. Brand clarity is paramount to creating appropriate customer expectations.

That’s why the La Quinta head office does not allow its hotel developers or managers to offer full service restaurants, room service or evening turn-down service. It is also why La Quinta provides a consistent product and great customer experience across its 800-property portfolio.

Class Dismissed
There was one additional dimension considered in the ratings – customer feedback. Low reviews are reportedly used to downgrade the hotel – it was unclear if they are ever used to upgrade the hotel to a higher class.

The problem with this approach is that customer satisfaction does not dictate the classification of the hotel; it merely describes how well the hotel is performing within its classification.

To use an extreme example, a horribly operated 5-star hotel, could hypothetically have extremely low customer satisfaction, but if it operates five-star facilities with a five-star service menu that is ineptly executed, it does not make them a 2-star hotel; just a rotten 5-star hotel.

Hotwire includes the guest satisfaction rating for each property during the search process – one can imagine seeing a 95% positive rating in a specific classification could provide a fairly clear indication of the guest experience compared with a 60% positive customer rating for a property in a neighboring classification.

To make matters worse, Brittany repeatedly stressed that the hotel brand is completely unrelated to the classification of any specific hotel.

Even more interesting is that the only tangible examples Hotwire provides in its description of the star-levels is a listing of the representative hotel brands, but more on that later.

Hotwire inexplicably includes the La Quinta Inn & Suites logo in its 2-star, 2.5-star and 3-star classifications. Especially for a brand that prides itself on consistency, this is not helpful to the brand or the consumer. This would seem to be the result of misapplying customer reviews to drive hotel classification upgrades & downgrades.

Same Game, New Rules
The next step was not to ask Hotwire for answers – that approach was futile; what was needed was a little more research to make my case more compelling.

First, were definitions from the major hotel booking sites of each hotel classification:

One can clearly see that Hotwire’s classification descriptions are woefully deficient compared with other major travel sites.

What makes matters worse however, is that for many years, Hotwire provided concise and informative hotel classification descriptions.

Below is an example from July, 2008 – the last date a valid Hotwire archive is available from The Internet Archive:

	Midscale 3 star
Examples: Holiday Inn, Radisson, Doubletree These midscale establishments place a greater emphasis on style, comfort and personalized service than hotels with lower star ratings. These full-service properties usually feature traditional lobby décor, baggage assistance, on-site dining, room service and a gift shop. Additional onsite amenities — such as a business center or fitness center — may also be available.
	Value 2.5 Star
Examples: Holiday Inn Express, AmeriSuites, Country Inn and Suites These limited-service establishments offer more than the basic level of accommodations and are ideally suited for the value-conscious traveler. Additional features may include on-site dining, a residential look and feel in the lobby, larger-sized guestrooms, and a fitness or business center. Guestrooms are comfortably appointed and may offer a few extras, such as additional space or a dedicated desk or work area. These properties are usually located within walking distance of shopping or dining facilities.
	Economy 2 Star
Examples: Days Inn, La Quinta, Comfort Inn These limited-service establishments are expected to offer clean, basic accommodations with a few extra features, such as a coffee maker. These properties may offer some business services but usually lack meeting rooms, baggage assistance and fitness facilities. Onsite dining is usually limited to coffee or Continental breakfast; offsite dining is usually located within walking distance. Public access and guest reception may not be available at all hours.

The improvements are obvious: Representative hotel brands are listed only once. Key points of differentiation are identified. Customers are provided with reasonable expectations for property features & service delivery.

The last point is particularly important as Hotwire allows hotels to withhold feature listings (reflected as icons in the user interface) in order to improve product opacity. I guest blogged on the topic of deducing participating Hotwire hotels for the Into the Soup blog earlier this year.

Most importantly, Hotwire’s former classification descriptions are well aligned with the descriptions provided by the other major online travel agencies.

The burning question is why would Hotwire intentionally eliminate its rating descriptions and introduce so much ambiguity into the hotel selection process? It certainly was not to benefit the consumer in any way.

It also seems I was not alone in failing to notice Hotwire’s new ratings criteria (or lack thereof.) Bidding advice sites BidonTravel.com, still lists the old criteria on its site.

Grade Inflation
Beyond erasing its previously clear and definitive rating criteria, another obvious problem is that Hotwire, whose rating system is based on 1/2 star increments, compares its ratings against Travelocity and Orbitz, groups that rate hotels in full-star increments.

This creates a structural statistical anomaly that makes the ratings unreliable. Here’s why. Think of the Travelocity and Orbitz rating scales like an educational grading system, but on a 5 point scale. Let’s say a 2-star hotel, like a 2.0 grade point average, equals a “C” – average. A 3-star hotel is the equivalent of an above average, “B” grade or a 3.0.

Orbitz and Travelocity, without the benefit of being able to grade using pluses or minuses, can only provide whole letter grades. As a result, hotels falling between 2.5 (B-) and 3.49 (B+) are all lumped together as straight “B” properties.

While this sells the 3.49 properties a bit short, assuming competent management, these hotels would tend to exceed customer expectations. The problem arises with the 2.5-star properties that receive a rounding related “bump” up the rating scale. All things being equal, these hotels may disappoint individuals seeking a 3-star property.

Also, because Orbitz & Travelocity grading differentials reflect full point increments, any rating variation from those two groups has greater impact than Expedia rating variations that only reflect 1/2 point changes. Unfortunately, by using Travelocity and Orbitz as reference points for hotel classifications, Hotwire structurally tends to round 2.5 star properties up to 3 stars.

If Hotwire wanted a more accurate and consistent rating process, it would use groups that rate in 1/2 star increments like Expedia, Hotels.com, TripAdvisor and Priceline.

This rating inflation is not new as the chart below illustrates:

Hotel rating inflation has resulted from transitioning from a hurdle basis to an average basis

Traditional rating systems like AAA, the Mobil (now Forbes) and Michelin had trained staff armed with specific criteria that must be satisfied to attain a particular rating. If a hotel did not surpass the define facility/service quality threshold, sometimes missing by relatively small criteria, they did not attain the higher rating.

Partly in reaction to hoteliers and hotel brands constantly lobbying for higher ratings, exceptions and standardized ratings across brands, Online Travel Agencies began to apply more lenient mathematically based scoring formulas that classified hotels based on average scores in lieu of definitive, hurdle-based criteria.

Close Only Counts in Horseshoes, Hand Grenades… and Hotel Ratings
As the chart shows, by moving to averages, hotels receiving lower scores are able to attain higher ratings by getting close enough for rounding to boost them into the next category. With full point scales, this resulted in a 1/2 point shift downward in hotel standards. This is why true 2.5-star hotels that do not meet written 3-star standards get graded as 3-stars by Orbitz & Travelocity.

Groups using 1/2 star increments are a bit better off, with the shift only shifting 1/4 point downward. As hotel ratings have traditionally been on a full or half star level, the quarter point differential has been detrimental enough to negatively impact travelers.

The double-whammy of Hotwire using full-point ratings as data points for its half-point scale, plus the introduction of lower grade hotels benefiting from a generous rating process results in Hotwire mistakenly rating a property like the La Quinta as a three-star hotel.

This process would arguably help the opaque travel site display a lower retail price for a specific hotel classification, helping support the “four-star hotels at two-star prices” advertising tag line. In some cases, those 2-star prices may be sourced from true 3.5-star hotels that were rounded up to 4-stars when the competitive sites were canvassed.

While the consumer may benefit from lower prices, there is a risk that guest satisfaction levels may decline due to the lower quality hotels being included in the classification. It is difficult to say if overall consumer value is eroded, but cases similar to transacting “3-star” La Quintas should theoretically be occurring with greater frequency at Hotwire than at Priceline.

Same as it Never Was
What pains me is Hotwire has no excuse to present an inferior hotel classification system for the following reasons:

1. Hotwire can leverage the ratings of their sister companies
2. All Expedia site operate on a consistent the 1/2 star rating system
3. Hotwire previously used appropriate hotel classification definitions

Even more interestingly, under Expedia’s newly launched “Unpublished Rates” product that presents opaque, Hotwire-sourced inventory in the Expedia search results page, the old Hotwire hotel category definitions are used.

As one can see below, the star rating descriptions used to merchandise the product use La Quinta Inns and Suites as an example of a two-star hotel.

	Quality 3-star hotels These quality establishments make comfort and personalized service their priority. These full-service properties usually feature: An inviting, relaxed lobby On-site dining Room service Family-style rooms A business administrative or health and fitness center may also be available. You can find these hotels in downtown or resort areas, and also in smaller, suburban cities. Our 3-star suppliers include Holiday Inn Hotels and Resorts, Radisson Hotels & Resorts, DoubleTree, and other respected hotel brands.*
	Midscale 2.5-star hotels These midscale establishments offer solid service that’s more than just the basics. Features often include: Guestrooms with couches and dedicated desks On-site dining An attractive, inviting lobby A business administrative or health and fitness center may also be available. These properties are usually located near shopping or dining, and can be found in both downtown or resort areas and smaller cities. Our 2.5-star suppliers include Holiday Inn Express, AmeriSuites, Country Inns & Suites, and other respected hotel brands.*
	Economy 2-star hotels These economy establishments offer reliable accommodations with a few extra features. Features may include: In-room coffee maker Cable TV Alarm clock Continental breakfast Off-site dining is usually located within walking distance. Our 2-star suppliers include Comfort Inn, LaQuinta Inns & Suites, Days Inn and other respected hotel brands.*
How we calculate our Star Ratings: Take the average rating on three top travel sites Factor in customer feedback Adjust the ratings downward if a majority of customers say we should

While Expedia does not go as far as replicating the original Hotwire ratings, it is substantially better than Hotwire’s own communication regarding hotel classifications.

The question is how Hotwire can defend its lack of ratings specificity on its own website, when purchases of identical inventory, under the same transaction model, made through sister company Expedia are merchandised using much more specific criteria.

Again, the La Quinta does not align with the Expedia “Unpublished Rate” criteria for a 3-star hotel.

Iron-clad, Stonewalled Policies
Armed with my research, I mustered the courage to make another call to the Hotwire Express line to plead my case.

This time I spoke with CSR Melissa who was staunchly protective of the company, including the adamant belief that Hotwire star ratings had nothing to do with the Hotwire business model.

While I was explaining how that assessment was considerably off the mark, Melissa curtly replied,

“If you are not happy with our policies, you should book elsewhere.”

Wow, thanks Melissa. She pretty much confirmed that I really should have booked elsewhere all those other times I had used Hotwire as well.

That remark pissed me off. Time to escalate to a supervisor.

Kim, the Hotwire customer service supervisor, was a bit more apologetic and after stressing that this would be a one-time exception based on the frequency of my patronage, my reservation could be refunded.

What about accurately fulfilling the purchase with a legitimate 3-star hotel (as rated by Hotwire’s Expedia owned sister websites) at the price point originally quoted by Hotwire? No, that was not an option.

What about letting me select a different 3-star hotel in the same neighborhood at a new price to keep me as a Hotwire client. No Go. Apparently, Hotwire has also elected to discontinue the process that worked so well before when an issue arose.

No, in short, Hotwire would rather negate a transaction from a frequent and loyal customer than stand behind their brand promise. That is a sad statement.

I declined the offer to cancel the booking, preferring to satisfy my curiosity and follow Brittany’s original advice that one could not truly evaluate the classification of a hotel unless the property was personally visited. I decided to see for myself.

I also realized that, unfortunately for the consumer, if Hotwire is contacted upon guest arrival, the only recourse is for the hotel to resolve the issue, not Hotwire. Enhancing facilities and/or services to a higher star level is not in the cards.

Maybe that is the plan – Hotwire puts the burden on the hotel, leaves the customer in the lurch, and washes its hands of the issue due to nebulous standards for hotel classes.

Living the Wildlife
Staying at the La Quinta went mostly as expected. Considering that the property is located within a mile of the company’s corporate headquarters, it is well maintained, with a competent staff.

How thoughtful of the hotel to provide a live pet in the room to keep me company

The good news was that the hotel’s facilities and services generally performed according to LaQuinta brand standards. The bad news was that the property is a limited service, 2.5 Star hotel.

Here’s a run-down of the missing 3-star amenities as described by other OTAs that detailed their standards:

• No On-site Dining (aside from morning self-serve breakfast bar) – Priceline
• No On-site Restaurant and Bar, no Baggage Assistance – Expedia
• Not Serving Breakfast, Lunch & Dinner; no Room Service; No Valet Parking or Fitness Center – Travelocity
• No Fitness Center, Room Service or Concierge Service – Orbitz
• No Medium-sized Restaurant serving Breakfast through Dinner; No Room Service, Valet Parking or Fitness Center – Hotels.com

Just because the hotel was a 2.5-star facility with 2.5-star services does not mean there were no surprises. La Quinta is known among animal lovers for offering over 700 pet-friendly hotels across the nation.

In this particular property, I found both a lizard and a bug climbing the walls of my room – expanding the definition of pet friendly… Always the optimist, I am assuming:

1. This is an experimental program designed to out-do Kimpton Hotels and their goldfish
2. PETA objected to the critters being caged
3. Both the lizard and the insect eat bed bugs

This experience provides an excellent demonstration of the difference between a hotel classification and the customer rating. Regardless of the lizard and bug, the hotel remains a 2.5-star property. Because of the lizard & bug, the hotel gets a lower customer rating as a 2.5-star property; it does not suddenly transform into a 2-star hotel.

Do I blame La Quinta for the lizard & bug? My response may surprise you – No. I blame Hotwire as I had no business staying in that particular hotel in the first place. By not standing behind their brand promise, Hotwire was the root cause a contributor to the process that created the negative experience.

The logic behind this decision is simple – If Hotwire is rewarded with my loyalty and patronage for delivering positive travel experiences (that are delivered by travel suppliers,) why wouldn’t the same standard hold true for the negative experiences?

In conclusion
While the La Quinta I booked falls within the revised description of the hotel classification provided on the Hotwire website, I have to agree wholeheartedly with CSR Supervisor Kim when she agreed that Hotwire’s hotel rating policy “makes no sense.”

Hotwire’s hotel rating process is inconstant with industry standards as well as the hotel rating standards applied by other Expedia controlled websites. This lack of consistency undermines Hotwire’s core brand promise and is fundamentally customer hostile in nature.

Consumers with concerns that follow Hotwire’s advice to visit the property before lodging a complaint will find themselves unable to prove that the hotel fails to meet a specific hotel class standard, as no standard exists as a benchmark for comparison.

It is especially incomprehensible that Expedia would allow inconsistencies to occur across their portfolio of travel brands – particularly on the opaque site that relies so heavily on consistently booking properties that are aligned with customer expectations.

One can only hope that Hotwire realizes the damage its lack of a rating policy is causing. Hotwire desperately needs to return to its earlier policy of hotel rating transparency and a dedication to resolving customer issues instead of canceling reservations.

As Priceline’s market capitalization is currently double that of Expedia’s and growing, it would seem that Expedia would want its Hotwire brand to compare favorably relative to Priceline’s name your own price product.

Bottom line, I’m currently researching my next trip – using the Hotwire rate as a baseline price for a hotel class in the destination, but then planning to under-bid it and name my own price on Priceline.