Setting up a right profitability management approach starts with understanding your market and benchmarking against the right hotels. It’s also a way to attract the right guests. One of the best ways to do that is identifying the hotels that are most like your own vis-à-vis key count, F&B services and outlets, conference space and other offered amenities. In the hospitality industry, choosing a compset if the first step toward a winning market-share formula.
For a consumer, one of the biggest costs of travel is booking a hotel room. The pricing trends of hotel rooms stem from a complex business strategy. In order to compete with fellow hotels, businesses will price their rooms at specific amounts. Throughout the traveling industry, competitive pricing is commonly used to attract customers to support an establishment. Hotel compset is a type of competitive market throughout the hotel industry. Here is why a hotel compset is important in the hotel industry.
What is Competitive Pricing?
Competitive pricing is conducted by dissecting factors including similar nearby hotels and knowing what rates to stick to during certain time periods. When changes occur in the hotel market, businesses using the hotel compset strategy can adjust accordingly. This means hotels must stay up to date on current pricing trends in order to survive amongst fellow competitors. The goal of competitive hotel pricing is to earn as much revenue as possible. Now that you know what competitive hotel pricing is, it’s time to learn about hotel compsets.
Hotel Compsets Explained
Compsets aren’t only for benchmarking. The traveling public make compsets of their own. When travelers are browsing through hotels, they typically check out at least a few different options in their area. A hotel compset (short for hotel competitive set) is a group ranging from anywhere to four or more similar hotels. The little differences between them can be small. For a guest, a slightly less stunning view, different room design and a bit more convenient distance may be some miniscule differences. Knowing the hotel compset your hotel falls under is crucial. This powerful insight will allow you to make necessary changes that can put you above your fellow competitors. “Being the best choice in your area is key, especially amongst your hotel compset group. When you are the best in your rank, you’ll get the most amount of business,” wrote Lana Wall, business writer at Research papers UK and Writinity.
A Quick Guide to Hotel Compset Identification
Identifying the hotel your business falls under isn’t always an immediate discovery. After analyzing a few distinct features of your hotel, you can make connections to your hotel and those with similar aspects in your area. Here are some features to analyze to discover the hotel compset that represents your business.
Having too many negative reviews is a huge detriment to your business. While pretty much any hotel has some disadvantageous reviews, not having more positive reviews to outbalance the negative ones is a huge downside. Hotel owners should strive to gain as much customer satisfaction as possible. Providing guests with a top tier service allows you price your hotel rooms and services at higher prices. The quality of a hotel’s service is reflected through its reviews; this fact is why hotel reviews impact the competitive pricing experience for hotel owners and businesses.
When trying to seek out what hotel your business is part of, location along with facilities matters. Trying to compete with hotels in different states, ones in a different city, or in other geographical locations doesn’t make sense. “Focus on the hotels in your area that are most similar. Don’t try to compete with hotels that aren’t in your general area,” recommended Kurtis Walton, from a marketing blogger at Draft Beyond.
The range of rooms in a hotel play into the hotel compset identification process. As a hotel owner, you want to compete against hotels with similar room choices to your business. For example, maybe your hotel has three types of rooms. If a nearby hotel also has those same types of choices, you fall amongst that compset.
Products & Other Amenities
Different hotels may have amenities and products that others around them don’t. Amenities like pools, free breakfast, on-site activities and a bar are not present at all hotel locations. This means you should only compete with hotels with similar amenities and products.
Hotel compsets are important for both consumers and hotels; the latter utilize compsets to gain profit and market share, while the former use them to get the best deals possible.