Hotels are driven by benchmarking to understand their performance versus their competitors.
NB: This is an article from Demand Calendar
If the hotel is performing better than the competition, everyone is happy. These are the winners, and they tend to keep doing what seems to work. Benchmarking only confirms that what they are doing is the right thing. On the other hand, if the hotel is performing worse than competing hotels, general managers and owners will put a lot of pressure on the team to shape up. These hotels are the losers, and they play the game of catching up.
Subscribe to our weekly newsletter and stay up to date
However, once they think they have caught up, the winners have taken a step forward and are still ahead of the competition.
Can benchmarking help losers take action and create a plan to surpass the competition, or would it distract the team from creating a strategy that would make them a winner? Let’s start with the benefits and challenges.
The benefits of using benchmarking in hotels
The definition of benchmarking is the process of comparing a hotel’s performance against industry standards or other hotels. There are several potential benefits of using market benchmarking in the hotel industry.
Understand the market: By accessing benchmarking data, a hotel will get a better understanding of the size, seasonality, and demand patterns of the market. This information will trigger hotels to at least capture their fair share of the market.
Setting goals and targets: Benchmarking can help hotels set realistic goals and targets for market share performance based on what is achievable at a specific destination.
Identifying areas for improvement: By comparing a hotel’s performance to a comp set of comparable hotels, it is easier to identify the KPIs where the hotel is falling short and needs to improve.
Calculating how much money the hotel leaves to the competition would be an eye-opener for many hotels and trigger actions to capture at least the hotel’s fair share of the market.
The challenges with benchmarking
There are a few challenges that hotels may face when it comes to benchmarking, including the following:
Data quality: Even if the instructions from benchmarking companies are clear, the data reported by hotels may not always be reliable or of high quality. The actual data might need to be corrected, but changes in KPIs will be more accurate if reporting errors are consistent.
Data availability: Not all hotels participate in exchanging data for benchmarking, so the hotel does not get the total overview of the market. Still, trends tend to show how the market has evolved.
Determining appropriate comp sets: It can be challenging to determine which competing hotels are most relevant and meaningful to benchmark for a hotel. This may require a lot of research and analysis, and several comp sets might be needed for an accurate comparison.
Ensuring data privacy: Hotels may be reluctant to share sensitive data with other hotels, but the worry is exaggerated since benchmarking companies manage all data securely and never share data for a specific hotel.
Even if there are a few challenges, the benefits outweigh them, so all hotels should subscribe to market benchmarking from a hospitality benchmarking company.
Read rest of the article at Demand Calendar
The post Can Hotel Benchmarking Help Losers Take Action and Create a Plan appeared first on Revenue Hub.
