Sizing up the competition plays a major part in your hotel’s marketing strategy. Your competitors have just as much sway in shaping guest demand and expectations as you do, and on an even more structural level, the market interaction between your properties determines room rates.
NB: This is an article from Clock Software
But with so many properties on the market, it can be hard to tell who you are truly competing with. Data acquisition will play a pivotal part in your hotel’s success and one of the main points that you will want to cover is developing a compset analysis.
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What is a Competitive Set?
A competitive set or a compset is made up of the hotels that appeal to the same guest segments as your own property and actively drive business away from you. In order to build a competitive set, you need to first determine the factors that make up your share of the hospitality market place.
You need to first consider the factors which define your property’s functions in the hospitality industry:
- Was your hotel built to appeal to a particular guest segment or was it an already established institution which adapted to changing guest demand effectively expanding into other segments?
- How exactly does your property appeal to guests? Does it have to do with its location or is it based on the quality of your auxiliary services such as leisure activities or event planning?
- Does the size of your rooms play into your guest’s choice? Do you often book large groups or do you cater to individual travellers more exclusively?
- Are you tightly connected with corporate customers and cater to their private events or are you more focused on travel for leisure purposes?
- What is your going rate per room? Guests will first and foremost compare prices when booking, which puts you in direct competition not only with hotels aimed at similar guest acquisition but also with ones whose going rates are the same as yours.
For each of these questions, you can find properties with comparable sets of qualities which can appeal to your target guests, but not all of them will act as your direct competition. This is where a comparative set analysis can aid you in determining who your hotel’s true competitors are.
Make up a list of all the property in your area and segment them in the following categories:
- Properties in your neighbourhood;
- Properties which share the same public transit arteries as your establishment (metro stations, bus stations, airport shuttles, major highways);
- Properties near locations most frequented by your guests (concert halls, convention centres, tourist sights, museums, etc);
Room Rate Comparison
The same list needs to note each type of room they offer and their standard room rates. Cross-reference their rates with your own and highlight the properties which list rates similar to your own. Now, these properties will not all end up being your direct competitors but the goal of this exercise is to limit the list for further examination.
Use Guest Personal References
Your hotel’s guest personas will provide the list of guest requirements which appeal to your most lucrative segment. If you haven’t developed a guest persona to this point it is crucial that you have one for the purpose of your comp set analysis.
Guest personas are constructs which provide background information on your desired guests, such as age, sex, the goal of travel, expectations of accommodation, length of say and spending capacity. Hotel brands who wish to develop their loyalty use guest personas to shape not just their marketing strategy but their business model as well.
Hotel upgrades and staff acquisition is based around this model of the perfect guest, which naturally appeals to this segment and draws in more guests of the type.
By using the breakdown provided by your hotel’s guest personas you can further limit the list of potential competitors by checking off which of the properties you have left cover the same requirements as set by your guest persona model.
Test Your Theory
All of this is purely speculative until you perform more independent research into the remaining properties on your list. A great way to begin your search is to make a separate list of each of these properties’ social media channels and review sites, then comb through guest reviews. You will notice that even though on paper many of these properties share the same set of accommodations and services you provide very different experiences to guests.
Hotel reviews which note poor service are likely to be taken to account by potential bookers, acting as a turn-off, which consequently cuts the list for your competitors even shorter. Your goal is to cut your list down to local establishments who perform similarly or better at the same going room rate. Once you have this list you need to test them out for yourself.
You can do this either by booking a stay in each location for the duration most often booked by the same guest segment you are competing for and try out the service on your own, or you can hire secret shoppers who will perform the same task for you.
It would be best if you can see for yourself how exactly the other properties appeal to your guests and consequently adapt your own business strategy to improve on the areas where you are found lacking.
Some of the properties you will test will not yield the same appeal as others, but that does not rule them out of your compset analysis. Such properties are likely to draw less lucrative clients that you are still in competition for.
Tools to Aid in a Cumbersome Task
Comparative set analysis is clearly invaluable to your hotel’s guest acquisition strategy but they also pose questions to your hotel’s efficiency. After testing out the competitors’ services you must ask yourself whether you are rating your own services appropriately or are you selling yourself short by always having to cut rates.
Your property management system (PMS) should provide you with Automated revenue management tools such which can acquire market data from various sources and always provide your establishment with the best asking price for your services. Revenue management software solutions allow hotel management to make safe projections of your hotel’s market value which aids in both determining compset and consequently improving guest acquisition.
By keeping track of your comparative set and your own hotel’s data analytics you can always determine your hotel’s active role in the market securing your position when investing in the property or expanding to new locations.
The post CompSet Analysis and its Role: Hotel Management Practices appeared first on Revenue Hub.