In this guide, we’ll explore why competitor analysis is vital for hotels and provide actionable steps to succeed in outperforming your rivals.
A Guide to Competitor Analysis for Hotels
The hotel industry is competitive by nature. Since the dawn of civilization when the two innkeepers in town would jostle for business, hotels have always needed to compete and win business.
One of the most important steps here is understanding your competitors. If you don’t know what you're competing against, it’s impossible to know where you need to improve and invest in order to stand out.
In this guide, we’ll show you why competitor analysis is so important for hotels and walk you through the steps needed to succeed.
Why is Competitor Analysis Important for Hotels?
Competitor analysis is a valuable activity for hotels for a few key reasons:
- It helps you make sure your hotel is on the right track in terms of the services you offer, your customer support, your facilities, and more
- It allows you to calibrate your prices so you aren’t over or under-charging, and are competitive with other hotels in your market and area
- It allows you to identify areas for improvement and can help you find inspiration for new services to offer
How to Do a Hotel Competitor Analysis?
Carrying out a successful competitor analysis is a multi-step process that will look slightly different for every hotel. Let’s dive into the key steps involved.
IDENTIFY YOUR COMPETITORS
The first step in your competitor analysis is identifying the hotels you are competing with. Typically, these will be hotels in your local area that target a similar demographic of customers and charge similar rates.
These businesses can negatively impact your bottom line by taking customers away from you. Take the time to compile a list of all your main competitors carefully. You might also want to consider businesses that don’t directly compete, but may still target your customers, like Airbnb rentals and hostels.
DECIDE WHAT TO MEASURE
Once you have your shortlist of competitors, it’s time to start measuring how they compare with your hotel in important areas. There’s a long list of potential comparison points to focus on, but it’s a good idea to whittle this down to a few important metrics.
Some examples could include:
Guest experience
Pricing
Marketing strategy
Quality of facilities
Occupancy rates
Online review scores
These are all areas that impact the success of a hotel and how likely guests are to want to stay there. If your competitors are performing better than you in these areas, it’s not good news, so you’ll want to keep a close eye on these points.
SCORE YOUR COMPETITORS
Once you’ve decided on the metrics you want to measure, go through your list of competitors and rank them in each area.
This takes time and a lot of research, but the information is usually available. Some information — like room rates — is easy to locate and objective enough to easily score and rank. Other metrics like customer experience are more subjective and will require reading reviews and conducting surveys.
In the end, you should end up with a detailed table showing how each of your competitors performs in each key area, and how this, in turn, compares to your hotel.
Some Tips for Successful Competitor Analysis
Let’s check out a few best practices to keep in mind when doing competitor analysis. There are many possible routes to success here, but if you pay attention to these tips you’ll be in a strong position.
BE HONEST WITH YOURSELF
All your competitor research will be useless if you aren’t able to also look at your own hotel objectively and honestly. If you can take a clear, unbiased look at your strengths and weaknesses, and how these compare to other hotels, your results will be much more reliable and you’ll be able to take informed, confident decisions to improve.
USE THE RIGHT TOOLS
With the help of the right tools and platforms, competitor analysis goes from a near-impossible task to a manageable, realistic activity. Fortunately, there are tons of data collection, analysis, and competitor ranking tools out there. Tools like Sprout Social, for example, allow you to find out what your competitors are doing on social media and how you can improve.
In Hotel-Spider, we have tools that allow you to research market trends and gain valuable insights about what other hotels are doing and what’s working in your industry right now.
HAVE A PLAN FOR USING WHAT YOU'VE LEARNED
All your research is worth nothing if you don’t know how to put it into action. Your team should have a clear plan for what happens next after your competitor analysis. Take the time to discuss what next steps you should take to implement the lessons you’ve learned and plan out the concrete actions to take in order to reach your goals and overtake your competition.
WORK WITH HOTEL SPIDER
One of the biggest competitive edges you can gain in the hotel industry is to use the right Property Management Software. Hotel-Spider is here for that exact purpose — our suite of tools including a Channel Manager, Booking Engine, and Central Reservation System are all designed to help you perform better and breeze past your competition.
Schedule a demo with us to learn more and get started.
