Are traditional competitive sets of your hotel obsolete?
An interesting question raised by my industry friend Fabian Bartnick!
Some in the industry believe that the era of the traditional comp sets are no longer relevant because of the rising hyper competition.
Here is my take.
I believe monitoring your traditional competitive set (comp set) still provides value, but you should broaden your horizon and acknowledge that there other forces at play here.
Today, every hotel in the world has not one, but THREE categories of direct competitors that should be taken into account in your revenue management practices:
Official Comp Set:
This is your traditional comp set, included in the property's dSTAR Report by STR or rate shopping report by Fornova. These reports provide real value by benchmarking how well your property is performing against the “official” competition.
Digital Comp Set:
These are properties that dominate the search engine results pages (SERPs) on the search engines for keyword terms that are very relevant to your property's product. Your digital competitors are all the properties with comparable to your property core services and amenities that rank on top or above your property in the search engines. Most likely these properties are not part of your “official” comp set. Ex. Google: which are the hotels listed on page one of Google’s SERPs (Search Engine Results Pages) when you search for your hotel category in your destination Ex. “Boutique hotels in downtown Houston” or “4-star hotels near Times Square Manhattan”. The hotels listed there are your true “digital comp set.”
Ultimately, travel consumers are the ones who decide who are your property’s true competitors; your comp set should not be decided arbitrarily by the owner or the GM. Since Google “owns” the Dreaming and Planning Phases of the Digital Customer Journey, and more recently is increasing very aggressively its presence in the Booking Phase, you are losing more potential guests to your digital competitors than to your dSTAR comp set.
Vacation Rental Competitors:
Today short-term rentals satisfy 1/4 of accommodation demand. In addition to monitoring and benchmarking your “classic” and digital competitors, you should monitor closely Airbnb's, Vrbo's and other vacation rental properties in your market. Research and identify the rental properties in your neighborhood, and what are their typical amenities and features.
Introduce weekly and monthly rates for both rooms and suites. A weekly rate is NOT a daily rate multiplied by seven. A monthly rate is NOT a nightly rate multiplied by 30! Make sure that your CRS, WBE (Website Booking Engine) and Channel Manager can support weekly and monthly rates.
Create an “Airbnb product” emphasizing the value and additional complimentary services guests will experience by booking the hotel at a comparable price, including free breakfast, connected rooms, parking, swimming pool, WiFi, luggage storage, etc.
