Home » Knowing your competition: hotel benchmarking
Knowing your competition: hotel benchmarking

Knowing your competition: hotel benchmarking

In the hotel industry, as in other markets, competition is very high, therefore, it is necessary to carry out studies or analyses to find out who are the hotels that compete with ours. In this way we can apply changes or strategies to differentiate ourselves in the market and thus position ourselves to achieve the […]

In the hotel industry, as in other markets, competition is very high, therefore, it is necessary to carry out studies or analyses to find out who are the hotels that compete with ours. In this way we can apply changes or strategies to differentiate ourselves in the market and thus position ourselves to achieve the objectives of the company. In this article, IHCS shows you how to carry out a study to analyse your hotel’s competition.

 

Competitors’ aspects to assess

In this order of ideas, in order to know our competition well, several concepts must be taken into account. Firstly, we must know the reality of our business well. For this, we must consider factors such as:

  • The location: where is our hotel located, what differentiates it and what advantages does it have for the customers who visit us?
  • Size of the hotel: How many rooms does our hotel have and what are the services offered in them?
  • General services: Apart from the services that come with the rooms, what other services do we offer? Do we have a spa, swimming pool, conference room, restaurant, among others?
  • Adaptability: It is important to ask ourselves if our hotel can be adapted to various customer profiles or segments.
  • SWOT analysis: Finally, it is necessary to carry out an analysis of the weaknesses, threats, strengths and opportunities that our independent hotel has. This will help us to find strategies to correct the mistakes and block the threats, and to enhance the strengths and exploit the opportunities.

Secondly, we should know that a competition analysis mainly takes into account the strengths and weaknesses of the local competition. In this way, a comparison can be made with our establishment and we can see where we stand. For this it is necessary to evaluate concepts such as benchmarking analyses. In addition, aspects such as occupancy ratio, ADR, RevPAR, market share of our hotel and competition.

 

Knowing your competition – Hotel Benchmarking

In order to know our competition well, we must apply concepts such as hotel benchmarking. This consists of analysing and collecting information on the performance or operation of the competition, but not only of the competition, but also of our accommodation. Now, to evaluate the performance, elements such as the quality of the product or service, efficiency, customer service, profitability, among others, must be taken into account.

Benchmarking is an analysis that allows us to make such a comparison with the local competition. We can also determine the position of our hotel in the market. In addition, we can identify the best practices of other establishments and thus replicate them in our own. In the end, all this is aimed at increasing the productivity and profitability of the hotel.

One of the reasons for applying hotel benchmarking is to understand how the hotel market works. In turn, this will help to avoid difficulties and gain advantages.

benchmarking de hotel

Benchmarking advantages

  • Promotes a culture of change and learning. In the hospitality industry changes are constant, therefore Benchmarking allows companies to adapt and not become outdated.
  • It improves the competitiveness of the company. By knowing where we are in the market and how our accommodation is performing against the competition and those who are leading, strategies can be put in place to improve deficiencies.
  • Increases performance. When you know how your competitors are performing, you can find opportunities to apply methods to improve your hotel’s performance. This translates into better customer satisfaction and, consequently, higher profitability.
  • Increases opportunities for growth. Benchmarking allows you to achieve or grow in areas such as reservation management, diversification of services, among others.
  • Clarity for decision making. When you have a clearer vision of how your hotel operates in relation to the competition, you have greater clarity to make wise decisions that positively affect the management of the business.
  • Encourages professional growth. This study also fosters a culture of learning and professional development in hotels. Part of the applications that Benchmarking brings are related to the updating of practices which in turn requires, for example, staff to be up to date and to study. This, in turn, encourages staff’s motivation to learn and study.

 

How to apply a Benchmarking study in our hotel

Here are some tips or steps to carry out a Benchmarking study successfully:

Take into account the market segment

When applying benchmarking, you must take into account the market segment in which you operate. So you cannot do a competitive analysis without using market segment information, as this is one of the main sources of information you are looking for.

In addition, it is important to study market trends, short-, medium- and long-term projections. This way you can see if your hotel is aligned with them.

 

Select the competition

The second step is to select the competitive set, i.e. those hotel establishments that are direct competitors. Select 3 to 5 hotels and remember that in order for the study to be as accurate as possible, it is good to select those that attract the same market segment.

You may also have competitors that are not exactly the same, for example, in terms of size or concept. But perhaps they are hotels that can provide useful information.

Determine the main criteria for comparison

Once you have selected your competition, the next step is to establish what the comparison criteria will be. The most commonly used and most important criteria are room rates, hotel occupancy, location, services and products, and online reputation. In addition, it is essential to remember that these criteria are measured with concepts or metrics such as ADR, RevPAR, occupancy rate, among others.

 

Collect and process the data

The next step is to carry out the collection of information related to our competitors, and as mentioned before, this has to do with tariffs, services, occupancy, among others. One way could be through surveys, reports, websites, social networks, among others.

Once the data has been obtained, it should be processed to obtain the results. With the results of the analysis of the competition and those obtained by the analysis of the business itself, a relation is carried out. This relation allows us to determine weaknesses and strengths, two aspects that are necessary to implement effective marketing strategies that can improve the profitability of the business.

Remember, if you need help to carry out a Benchmarking study in your hotel, IHCS is there to help you. Let our experience take your hotel to the next level.

Rate this post

Do you want to keep up to date with news and advice about the hotel sector?

We help you to develop and optimise your hotel project.

The 1st consultation is free!
Hotel Consulting
We use our own cookies and those of third parties in order to analyse the browsing of users and improve our services. If you continue to browse, we consider that you accept their use. You can obtain more information, or find out how to change the settings, by clicking on more information