two chess pieces reflecting battle for hotels to set a pricing strategy in volatile times

To effectively measure success and maximize the Revenue Generation Index (RGI), a hotel must carefully select its competitive set (comp set). The comp set should be relevant and strategically chosen to attract the same guests that the hotel aims to capture.

NB: This is an article from Demand Calendar

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A well-chosen comp set allows a hotel to benchmark its performance accurately and implement strategies that enhance market share.

Steps to Select the Optimal Comp Set

1. Identify Your Target Guest Demographics

Begin by understanding your hotel’s primary guest demographics regarding psychographics and spending power. Consider factors such as:

  • Purpose of Travel: Are your guests primarily business travelers, leisure tourists, or a mix?
  • Psychographic Profiles: What are your typical guests’ interests, lifestyles, and values? Are they looking for luxury, budget-friendly options or unique experiences?
  • Spending Power: What is your guests’ average spending capacity? Do they prioritize value for money, or are they willing to spend more for premium services?
  • Booking Behavior: How do your guests typically book their stays (e.g., through OTAs, direct bookings, or travel agents)?

By clearly defining your target audience, you can ensure that your comp set includes hotels that appeal to the same type of guests.

2. Analyze Location and Proximity

Geographical location is a critical factor in selecting your comp set. Competitors nearby are more likely to vie for the same guests. Consider:

  • Local Competitors: Hotels within a similar geographic area, such as the same city or neighborhood.
  • Destination Appeal: Hotels that benefit from similar local attractions, business districts, or transport hubs.

3. Compare Similar Attributes

Ensure your comp set includes hotels with similar attributes to your property. These attributes may include:

  • Price Range: Hotels that operate within the same price bracket as your hotel.
  • Hotel Class: Properties that offer a similar level of service and amenities, such as luxury, mid-scale, or budget.
  • Amenities and Services: Competitors provide comparable amenities like pools, restaurants, conference facilities, and fitness centers.

4. Evaluate Online Presence and Reviews

In today’s digital age, a hotel’s online presence and reputation significantly influence guest decisions. Include competitors who have:

  • Strong Online Reviews: Hotels with comparable review scores and guest feedback on platforms like TripAdvisor and Google.
  • SEO and Digital Marketing: Properties that appear in similar search engine results and have a solid social media presence.

5. Consider Market Segments and Seasons

Different types of guests may stay at different times, affecting your comp set. Tailor your comp set based on:

  • Weekday vs. Weekend Guests: Business travelers during weekdays and leisure tourists on weekends.
  • Seasonal Variations: Family vacations during holidays and solo travelers during off-peak times.

Read the full article from Demand Calendar