Competitor set (comp set) for your hotel

Explanation — What is a CompSet | Competition Set | Competitive Set?

In a CompSet (Competitor Set), you define the five to ten strongest competitors for your hotel. The most important part is that the competitors address the same target group as you! Which hotels are your guests still looking at? Which hotels are shortlisted?

‍

This is often the first and biggest mistake that is made. The hotels that the hotelier would like to have as competitors are included in the CompSet!

‍

By the way: CompSet is often replaced by Competition Set, Competitor Set or Competitive Set.

Customize your CompSet!

As is so often the case, your guests are decisive for your competitor set! So take a close look at your target groups. I'm sure you know why guests choose your hotel and what they value the most.

‍

Once you've figured that out, look at the booking process from the eyes of your guests. The best case scenario is to ask some of your guests why they chose your hotel, which hotels they might still like to go to and why. Then select competitors for your CompSet based on these decision criteria.

‍
You'll soon notice that not all guests always choose where they're going first!
We often hear the following sentence from hoteliers: “We don't have enough competitors in the area who are on the same level as us.”

‍

Many hotels make the mistake of only choosing hotels in their own area in their CompSet. It's not always wise. Because it can be exactly the other way around, especially for holidaymakers. There are several places to choose from or the hotel determines the holiday destination.
So make your CompSet dependent on your target groups and include hotels in your CompSet that attract the same guests as you!

‍

Know your strengths!

Once you've identified your competitors, find out what exactly sets your hotel apart from your competitors and where they Strengths and Weaknesses lie down. What are the decisive criteria that motivate your guests to book at your hotel?

‍

First, compare the following criteria with your competitors:

• Price level
• Service quality
• Location

Because these criteria will play a role in every decision. To do this, you can create a tabular overview:

Determine the ADR For each hotel, give a score for the location or take over the score of an OTA. Guest satisfaction is a good indicator of quality, which can be determined, for example, via rating portals. It never hurts to look at other hotels yourself from the guests' perspective!

It is important that you recognize where your strengths and weaknesses lie. Because when you know that, you can fully concentrate on it and consciously focus on them.

‍

In addition, you should definitely use your Unique Selling Points Identify (USP's) vis-à-vis your competitors. The USP's set you apart from your competitors and represent an important, if not the most important, decision criterion in the booking process for your guests. You should also definitely know the USP's of your competitors!

Analyze your competitors carefully and search the websites. This gives you a feeling for the different focal points and special features.

‍

With the information collected, you can now decide how you want to position your hotel on the market in the future. Don't be afraid to revise decisions you've made in the past and reconsider your market position. Continuously monitor your competitors to identify when changes are necessary. It is important to remain flexible and adapt to current developments. It is even better to be a pioneer with new ideas and innovations. Impress your guests with creative innovations that outshine your competitors.

‍

Analyze your performance!

There are various key figures to analyze your performance compared to your competitors.

‍

MPI (Market Penetration Index)

The MPI sets its own hotel occupancy in relation to the occupancy of the CompSet. It indicates what share of the market your own hotel serves.

‍

ARI (Average Rate Index)

The ARI compares its own average price with the average price of competitors.

‍

RGI (Revenue Generated Index)

The Revenue Generating Index (RGI) determines revenue per available room in relation to RevPAR the competitor in CompSet (selected competitors).

Attention! The key figures should never be viewed in isolation from one another. If the MPI is very high and the ARI is low, this could be an indicator that prices are too low. If the ARI is very high and the MPI is low, the prices may be too high.

‍

CompSet & Pricing

In big cities, competitors' prices often play an overriding role. There is a high level of competition, so prices must be constantly monitored.

‍

Many medium-sized hotels in rural areas or smaller towns rightly notice that this does not apply to them. However, it is often concluded that revenue management therefore does not work and that a revenue management system would be out of the question. If you're one of these hoteliers, read on, because that's a fallacy. As a result, many hotels leave money behind. Because revenue management starts with the hotel's own demand. And this doesn't have much to do with the competitors' prices. happyhotel is a Revenue Management Software that monitors demand behavior within your defined competitive set! If your demand increases for specific dates, happyhotel recognizes this and raises your prices. At first, this has absolutely nothing to do with your competitors! However, if you don't adjust your prices to the booking behavior of your guests, you won't realize the opportunity for higher sales.

‍

However, creating a CompSet is by no means superfluous! Quite the contrary — it serves your own classification and positioning on the market, gives you an overview of your competitors and, if necessary, helps you come up with new ideas.

‍

Nonetheless, the demand for your CompSet can be determined and incorporated into your pricing strategy. A rate shopper, a system that supports your pricing with a view to your competitors, is suitable for this. Your competitors are a puzzle piece for your pricing. They should never be viewed alone, but always together with your forecasts, your current occupancy and your pickup.