Obviously you have a good understanding of your hotel, your target audience and your commercial approach.
NB: This is an article from Canary Technologies
But how well do you know your competitors? What sets them apart and how does your hotel measure up?And more importantly: how can you use this knowledge to optimize your pricing, marketing and conversions? The answers to these and many more questions lie in hotel competitive analysis.
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What Is a Competitive Analysis in the Hotel Industry?
A hotel competitive analysis is an important revenue management tool. It helps you analyze the unique selling points (USPs), strengths and weaknesses of your hotel and other players in the market. This shows how you’re positioned in your destination’s overall offering and helps point your commercial strategy in the right direction.
Why Is Performing a Hotel Competitive Analysis Important?
A hotel competition report offers important insights into your positioning in relation to your top competitors. It also allows you to benchmark your performance against similar properties to see who is doing better and why.
This, in turn, reveals opportunities where you can maximize rates during certain periods or win more business with targeted promotions.
In short, a good competitive analysis helps you optimize your rate, marketing and distribution strategy and achieve a higher topline.
How to Determine Your Hotel’s Competitive Set
Before you get into your hotel competition report, you need to define your competitive set, or compset for short. For that, look at hotels around you. Identify the ones that are most likely to take business from you. They’re the ones your guests compare your property to and might choose over yours. Your closest, most direct competitors will make up your compset.
To find which hotels these are, go through the following five Ps.
Start by checking hotels that are close to yours. Location often plays a big role in booking decisions. That makes nearby properties some of your top competitors, especially if you’re close to major attractions or event venues.
There’s an exception to this rule though. If your hotel offers a niche product and the only comparable property is across town, it still belongs in your compset.
Apart from location, price is one of the easiest factors to compare for potential guests. Look at hotels with similar rate structures as yours. They’re likely to attract a clientele with a similar budget and idea of what’s good value for money.
Look at what experience, ambiance and setting you offer guests. Are you running a budget, upscale, luxury or boutique hotel? Find similar properties, so you can compare apples to apples.
This covers your room types and amenities. Make a list of what you offer first. It should include accommodation categories, F&B venues, spa and gym facilities, meeting and event spaces, your casino or other entertainment services, and anything else you offer guests on-site. Then check which hotels have a similar set-up and add them to your compset shortlist.
Think about the reasons guests have for visiting a hotel:
- Corporate guests come to town for business meetings or conferences.
- Families want to enjoy a holiday with fun activities for everyone.
- Couples look forward to pampering themselves at your restaurant and spa during a relaxing getaway.
- Tourists are keen to explore the surrounding area and discover the local culture.
Which of these apply to your property? And which hotels around you target guest demographics with similar travel purposes? They’re additional candidates for your compset.
After going over your five Ps, you should have a list of close competitors. Pick three to five of them as your primary compset. Now, it’s finally time for your competitive edge analysis to see how you’re positioned in your market.