The Gloves are On: Yelp to Add Health Inspection Grades to Reviews
By Marc Stephen Shuster Partner, Berger Singerman | December 29, 2013
This article was co-authored by James D. Gassenheimer a partner in the Miami office of Berger Singerman.
Whether or not you are a Yelp fan or user, the stark reality is that people are using it more and more in their daily lives to find quality hotels, popular restaurants, nearby supermarkets, and other things of interest – particularly when traveling. Beginning this year, with the New York and San Francisco markets, Yelp will be leading the way toward the inclusion of health-inspection grades in online reviews. In short, the results of health inspections, previously limited to little-known governmental websites or hard records, are about to graduate to the big leagues of the internet, and go viral.
Let's first review some history in order to put this in context. Our most recent article discussed the "TripAdvisor Effect" and how it's now taken center stage in the consumer hospitality experience. Hoteliers, by choice or by necessity, must face the reality that a few bad reviews on a travel site can significantly harm their businesses. Restaurateurs (and amenity-driven hotels that have restaurants) must contend with the same issue while dealing with two other online review behemoths, Zagat and Yelp. In addition, the hyper-growth in the relationship between online/mobile advertising and technology has created 1) an ever-changing list of proactive optimization steps operators must take, on sites like Localeze, Facebook, and Google+, to stay competitive, and 2) continually-evolving advertising strategies to consider, such as Google mobile pay-per-click ads and the panoply of flash/deal-per-day sites. Our collective call to action then, and even more so today, remains for businesses to shift more resources away from traditional advertising spends, and, instead, toward managing their online social media and reputation management, both from a public relations and a legal perspective.
With all of these new issues to be monitored, considered, and executed, Yelp decided to give operators yet another issue to keep them up at night -- health-inspection grades. In a city near you, Yelp will likely soon begin augmenting reviews with health scores that local municipalities (through their health departments) provide about a given restaurant. What this means is that previously obscured information, found only by physically visiting the restaurant or by scouring the rarely-read government sites of state agencies or government archives, will now take center stage on one of the most visited sites on the Internet. "What previously could only be found at City Hall, or more likely physically going to the restaurant and directly experiencing the problem, is now open season when you visit Yelp.com," says Eric Lewis, Executive Managing Director of Cushman & Wakefield in New York.
In addition to restaurants and hotels having to contemplate the fact that their level of cleanliness is on display for the world-wide-web to see, they must also consider the source. This rating is not coming from a disgruntled online reviewer like you might have on TripAdvisor; this is coming directly from government entities. Putting everything else aside, this is the utmost in perceived legitimacy – state and city agencies whose sole job it is to ensure that properties such as restaurants are complying with, and abiding by, the health code. Joe from Manhattan telling the world that your steaks are awful is scary enough. But when the State or City of New York, on the other hand, tells the world that you have roaches under your coffee machine and no hand-washing facilities near your food-preparation area or toilets, we now move into petrifying territory.
When it comes to the impact of restaurants' poor health inspection scores on the hotels in which they reside, there is little available in the way of studies. This is not unexpected, given the fact that these scores and grades have almost always remained the "dirty" little secret of which the public-at-large was unaware. This is not to say, however, that hoteliers did not recognize the negative impact poor restaurant rankings could have on their hotels. It was only a couple of years ago that New York eateries within the Plaza and Andaz 5th Avenue were found to be hiding their poor grades, despite being legally mandated to post their "B" and "C" rankings in a conspicuous place.