In the main, the ratings are based on a 5-6 hour assessment of each property by Qualmark inspectors - people "with years of real-life tourism business experience" - taking into account 160 different criteria including cleanliness, management, customer service, cultural responsibility and facilities. And the organisation has also recently started using visits by mystery shoppers to give more emphasis to the actual customer experience.
So, going back to my colleague's question, the 5-star hotel she stayed at should have been "exceptional" and "among the best available in New Zealand".
If it failed to reach that standard then one of the Qualmark criteria is that the business has to "establish and maintain procedures for the prompt handling of complaints".
And if that isn't satisfactory then you can always go to qualmark.co.nz/feedback.php. The organisation promises: "Any concerns raised will be investigated further by Qualmark the next time the business is assessed."