Hotel properties receive rankings based on Revenue Per Available Room (RevPAR), which incorporates the Average Daily Rate (ADR) and the hotel occupancy in its calculation. Hotels define a competitive set of similar service level hotels within the same geographic area.
Benchmark your competitors' rates in order to anticipate their strategies, list who your competitors are and keep tabs on everything that they are doing from rates to marketing campaigns.
- So how will your competitors selling strategies by segments evolve?
- How will that impact your demand to come to your hotel?
- Are you benchmarking your hotels GDS performance?
- Do you know you hotel's GDS market share?
Check the public rates of your competition, at least once a week. Also check periodically pricing by length of stay (LOS) i.e. 2 nights stay by arrival day, 3 nights stay by arrival day etc.
Benchmark on the following criteria:
- Level of service
- Distribution channels
Market share reports help you to understand your performance versus your competitors, both in terms of occupancy and average rate.
They can provide the following information:
- MPI - Market Penetration Index (your occupancy results versus the average occupancy of your competitors)
- ARI - Average Rate Index (your ARR versus the average ARR of your competitors)
- RGI - Revenue Generator Index (your revenue share of the market, the market being your hotel and the hotel competitors)
Your RGI should be above 100 (Index base 100). If not, that would mean that some of your competitors convert more business than you do.
Reading the day-by-day RGI, when do you achieve the lowest score?
- For week-days, week-ends, events, when is the low demand periods?
- Do you have the right market segmentation?
- Is your price positioning by segment correct?
- It is also important to compare yourself to the right competitors!
Develop a checklist to evaluate your competitors in terms of product & quality: Score the quality of your competitors over the following measures:
- Welcoming and openness of the employees
- Quality and cleanliness of the bedroom
- Food & Beverage outlets and other services
You can of course also put into the mix score from hotel review sites like TripAdvisor.