STR Makes Overdue Change To Tier Structure

Smith Travel Research's announcement that it next year will begin using the terms "midscale" and "upper midscale" to define the midprice tiers is a welcome change, although from a travel buyer's and manager's perspective, the industry's undisputed category-maker could have done more.

The meanings around the wordy designations "midprice with food and beverage" and "midprice without food and beverage" have diminished over the past several years. As STR vice president of communications and digital media Jeff Higley explained, fewer and fewer midprice hotels include full-blown restaurants, while those previously designated as "without" are adding more food choices for travelers.

Noting this trend, Business Travel News in 2007 actually stopped using the with/without F&B labels for midprice tiers, at least in its annual U.S. Hotel Chain Survey. As a confirmation of this decision, the first year those labels were dropped, buyers rated Marriott's SpringHill Suites--a brand we previously had designated as "midprice without F&B"--as the midprice brand with the best food quality.

For STR, whose guidelines many hoteliers and analysts follow as the industry standard, midscale now represents most of the brands that were "without F&B," and upper midscale represents most of the "with F&B" tier. Even so, STR's done more than just slap new labels on the existing tiers, Higley said. STR evaluated price points and amenities offered and did a little shuffling. Holiday Inn and Holiday Inn Express, once in two separate tiers, now both sit together in the upper midscale tier, for example.

When we first got wind a few months ago that STR was exploring a tier overhaul, I wondered if they were going to divide the upscale tier. That tier includes an odd combination of such full-service brands as Doubletree, Crowne Plaza and the flagship Wyndham brand as well as a number of limited-service brands, such as Hilton Garden Inn, Hyatt Place and, as a matter of fact, SpringHill Suites. While buyers have high opinions of many of these brands, many still buckle at referring to them as upscale.

Higley said STR's upscale tier is based purely on price point, even though the amenities vary wildly at hotels within this grouping. While this makes perfect sense from an industry data-analysis standpoint, it still is a bit confusing from a travel management standpoint. It's also difficult for us to present solid, apples-to-apples data after asking buyers to rate the various hotel chains each year. Is it informative, for instance, to directly compare buyer opinions of Doubletree and Hilton Garden Inn--two Hilton brands that Hilton itself would indicate represent two disparate experiences--within the same category?

In the past, we've handled this by designating a "select-service" tier for the Hilton Garden Inns and SpringHills of the world and shuffling within the tiers a bit, but it's a somewhat arbitrary decision to determine which brands go into which group. Do we need a new sub-tier? Is the term upscale descriptive enough on its own to cover all these brands in the travel management world? Or is this just the sort of minutiae that concerns only those of us who spend too much time reading industry data reports?

As we consider these questions, at the very least I'd like to thank STR for enabling me to never again find a way to gracefully work "midprice without food and beverage" into a sentence or chart.