Hotel Benchmarking is an essential tool in the hospitality industry. Well, with it you can collect and analyze information about different establishments. The purpose is to evaluate the performance of a hotel company to identify areas for improvement. With this, hotels can position themselves in the market more competitively.
Through this process, you can discover best practices from leading accommodations and apply them to improve the profitability of your own property.
In this article, we will explore what Hotel Benchmarking is and what its benefits are.
WHAT IS HOTEL BENCHMARKING?
Hotel Benchmarking consists of the analysis and collection of information on hotel operations. The objective is to evaluate the performance of different areas of your company (internal Benchmarking) and the competition (external Benchmarking). This way you can make a comparison to identify which aspects you can improve. To study performance, factors such as the quality of the product or service, efficiency, customer service, profitability, among others, are taken into account.
Furthermore, with Benchmarking you can determine the position of your company in the market. But not only that, you will also identify the best practices of other accommodations and thus apply them to your business. All this is done with the purpose of improving the productivity and profitability of the establishment.
WHY APPLY HOTEL BENCHMARKING
The main reason for applying hotel benchmarking is to understand how the hotel market works. Because this will help you avoid risks and obtain benefits. Emphasizing this last aspect, below we show you some of the advantages of this study:
It allows the business to enter a culture of change and learning. Since the hotel market is constantly changing, Benchmarking prevents us from becoming stagnant or outdated.
It helps improve our competitiveness by knowing where we are positioned and how we perform against other leading accommodations. Since we can implement strategies to grow market share.
Increases performance. By knowing how your competitors are performing, you can locate opportunities to adopt processes that offer better customer satisfaction. Consequently, you will have greater operational efficiency and profitability.
Greater growth opportunities. Hotel Benchmarking allows you to identify new growth opportunities in different areas. For example, in the area of digital marketing, in reservation management and the diversification of products and services.
Clarity in decision making. By having a more complete picture of your hotel’s operations, you will be able to make informed decisions to improve management.
Encourage business learning. Benchmarking fosters a culture of learning and training in hotels. Well, it implies that employees must study to be updated on best practices. This in turn promotes the motivation of staff to perform their duties.
HOW TO APPLY HOTEL BENCHMARKING
Below we show some tips or steps to carry out Benchmarking successfully:
IDENTIFY THE MARKET DEMANDS
To apply hotel Benchmarking well, you need to know well the market segment in which you operate. Well, this will be the main source of data you are looking for. In this sense, you must identify the profile of the guest who arrives at your hotel. It is important to know what your needs and preferences are. Well, this way you will have more information about market standards and, thus, build your competitiveness.
In addition, it is important that you study market trends, its short, medium and long-term projections. This way you will see if your hotel is aligned with them.
MEET AND SELECT YOUR COMPETITION
The second important hotel benchmarking tip is to select accommodations that are direct and indirect competition. In turn, this will help you understand what strategies, tools, techniques and processes they use. You will also be able to see what their strengths and weaknesses are. All this is key to competing well.
It is recommended to take into account competitors that are not exactly the same, for example in size or market profile. Well, these can also provide interesting data.
IDENTIFY THE COMPARISON CRITERIA
After you have selected your competition, you must know what the comparison criteria will be. In this case, the most common criteria are the price of the rooms, hotel occupancy, their online reputation, location, the services and products they offer, among others.
Also, it is important to remember that these criteria are measured with metrics such as ADR, RevPAR, occupancy rate, among others.
COLLECT AND ANALYZE DATA
The next step is to collect data or information from competitors. One way to do this is through surveys and reports, social networks, websites, among others. The information can be qualitative and quantitative.
Once the data is obtained, it must be processed to obtain the results. These results must be measured in order to compare them with the data of your hotel or establishment.
MAKE THE CHANGES
Finally, with the market demands clear and the results of the competition analysis, you continue to make changes. That is, this study allows you to identify weak areas, therefore, you must take actions to improve them. This may involve making investments in technology, personnel training, facility renovations, among others.
In summary, hotel Benchmarking is a useful tool for establishments to better understand the hotel market and improve their competitiveness.
By applying this method effectively, hotels can make informed, data-driven decisions. They can also promote a culture of learning and change and stay current in an ever-evolving market.
If you need help with a Benchmarking study, do not hesitate to contact the specialists. At IHCS we can advise and help you so that your hotel or resort is competitive and increases its income.