Hotel Competition Analysis: What is it, Importance and How to Do
In the hotel industry, knowing your competition is like having a treasure map.
More precisely, competitive analysis is your guide to understanding what makes your hotel stand out and where you can improve.
So, let’s dive into what is competitive analysis, its importance it, and how to do it to boost your bookings and profits.
What Is Hotel Competitor Analysis?
A Hotel Competitive Analysis is a strategy that hotels adopt to evaluate and compare their services and pricing within the same region with their competitors.
A handy Hotel competitor report helps them to make effective decisions for the future and generate a feasible amount of profitability.
Also, it gives them an insight into the different services, pricing, and other factors that their competitors offer.
This way hoteliers can assess how well they are doing against their competition.
The hotel industry competitive analysis is the right method to maintain a suitable brand image among your customers and also with the chance to stand one step ahead of the competition.
There are generally four to five different direct competitors of hotels at a particular location which needs to be kept in mind while doing the analysis.
Plus, don’t forget to add indirect competitors in your hotel competition benchmarking.
A key finding from PACE Dimensions indicates that future competition will primarily come from indirect hotel competitors, like online hotel booking platforms and media companies which requires hotels to create better competitive strategies in order to survive.
Importance of Hotel Competitive Analysis Data To Get Ahead
Here is why analysis of your hotel competitors is important to stay ahead in the game:
Strategic Positioning: Competitive analysis helps hotels identify their unique selling points (USPs) and position themselves strategically within the market. This assists in attracting a specific audience that aligns with their offerings and brand.
Pricing Strategies: By examining competitors’ pricing structures and rates, hotels can develop competitive yet profitable pricing strategies. This ensures that their room rates remain appealing to potential guests while still generating revenue.
Market Trends: Staying informed about market trends and industry shifts is crucial. Competitive analysis provides valuable insights into what’s currently popular and in demand which allows hotels to adapt and stay relevant.
Marketing Insights: Analyzing competitors’ marketing efforts and campaigns can inspire effective promotional strategies. Hotels can learn from successful marketing tactics and tailor their own campaigns accordingly.
Service Enhancements: Guest feedback gathered during competitive analysis can highlight areas where hotels can improve their services. Plus, it also addresses the areas that can lead to higher guest satisfaction and loyalty.
Occupancy Optimization: By monitoring competitors’ occupancy rates and booking patterns, hotels can better plan their own occupancy and revenue management strategies. This helps maximize bookings and revenue.
Revenue Growth: Competitive analysis helps hotels identify untapped markets, niches, or segments that may present growth opportunities. Hotels can then target these areas with tailored offerings.
Cost Control: Examining competitors’ cost structures can provide insights into cost-saving opportunities. This can lead to more efficient operations and better profit margins.
Guest Loyalty: Understanding guest preferences and what competitors are doing to enhance guest experiences can help build guest loyalty. Meeting or exceeding guest expectations is key to repeat business.
How to Perform Competitor Analysis for Your Hotel
In the fiercely competitive hotel industry, understanding your competitors is essential to gain a competitive edge. A thorough hotel competitive analysis (also known as SWOT analysis) helps you identify your strengths, weaknesses, opportunities, and threats which allows you to develop effective strategies to attract more guests and enhance your overall performance.
In this step-by-step guide, we’ll walk you through the process of conducting a comprehensive hotel competiton analysis.
Step 1: Identify Your Competitors
Begin by identifying your direct and indirect competitors which also known as hotel comp set analysis in hotel industry.
Direct competitors are hotels that offer similar amenities and target the same customer segments.
Indirect competitors are establishments that provide alternative accommodation options.
Look for hotels within your geographical vicinity, but also consider global competitors. Websites, online travel agencies (OTAs), and industry reports can be valuable sources for competitor research.
Example: Suppose you own a boutique hotel in downtown Chicago. Your direct competitors might include other boutique hotels in the area, while indirect competitors could be large chain hotels or vacation rental platforms like Airbnb.
Step 2: Analyze Online Presence and Reputation
Evaluate your competitor’s online presence, including their website, social media accounts, and online reviews.
Analysis of their branding strategies, user experience, and the level of engagement with their audience.
Examine guest reviews to identify common strengths and weaknesses.
For doing so, online reputation management tools can provide valuable insights into your competitors’ performance and sentiment analysis.
Example: By analyzing your direct competitor’s online presence, you might discover that they have an engaging website with a visually appealing booking interface, active social media accounts that showcase positive guest experiences, and consistently positive online reviews praising their personalized service.
Step 3: Evaluate Pricing and Packages
Analyze your competitor’s pricing strategies and compare their rates to yours.
For accessing the pricing data of your competitors you can use tools such as MakCorps Hotel Price API. Using this you can get real-time hotel pricing data including amenities from 200+ OTAs for any given location.
With this API you can not only pricing data of your competitors on all the major OTAs.
Which helps you determine whether their rates are higher, lower, or on par with your own. And you can set your hotel room prices accordingly to gain a competitive edge.
Example: By conducting a competitor pricing analysis, a luxury hotel identifies that nearby competitor charges significantly higher rates for similar amenities.
After recognizing an opportunity, they adjust their own prices slightly below their competitor’s rates and position themselves as an attractive alternative for price-conscious guests seeking a lavish experience.
As a result, the hotel experiences a surge in bookings through capturing a larger market share which ultimately results in boosting its revenue.
Step 4: Assess Service Quality
Gather information on the service quality offered by your competitors.
Consider factors such as cleanliness, staff friendliness, speed of service, and guest satisfaction.
Mystery shopping, reading guest reviews, and conducting surveys can provide valuable insights. Identify areas where your competitors excel and areas where they fall short.
Example: Through guest reviews and personal visits to your competitors, you discover that one of the boutique hotels excels in providing personalized attention to guests, while another hotel receives mixed reviews regarding cleanliness and housekeeping.
Step 5: Explore Marketing and Advertising Efforts
Study your competitor’s marketing and advertising strategies to understand how they attract and retain customers.
Look for their presence in print and online publications, social media campaigns, email newsletters, loyalty programs, and partnerships with local businesses.
Analyze their messaging, promotions, and target audience to make advantageous marketing decisions.
Example: Your analysis reveals that one of your competitors actively partners with local tour operators, restaurants, and spas to offer exclusive discounts to their guests which leverages these collaborations as a unique selling point.
Step 6: Stay Updated on Industry Trends and Innovations
Keep abreast of the latest trends and innovations in the hotel industry. Follow industry blogs, attend conferences, and join professional associations.
This knowledge will help you identify emerging opportunities and stay ahead of the competition.
Example: You learn that several of your competitors have started implementing mobile check-in and keyless entry systems to enhance guest convenience and streamline the check-in process.
Conclusion
Conducting a perfect hotel industry competitive analysis is not a cup of tea for everyone and requires a lot of effort.
But by following our guide one step at a time you can get the leverage to set your business operations in a profitable manner.
Conduct a SWOT analysis to get a deeper understanding of your business and also about your competitors to accordingly optimize your business strategy.
Don’t forget that merely copying your competitors would not yield much result.
Setting apart your own unique vision in front of the customers with the best possible amenities can help you shape your winning strategy.
And since we are conducting a competitive analysis, one thing that truly matters is continuously watching your competition to maintain a positive brand image in front of your customers.
Adopt the above-mentioned strategies and build a powerful hotel brand image.
Frequently Asked Questions:
Is There Any Tool That Provides Historical Hotel Pricing Data?
Yes, MakCorps is a tool that provides historical hotel pricing data.
Additional Resources:
Here are a few additional resources that you might be needing for better hotel competitor analysis:
