It’s Important to Know the Competition
The secret to good revenue management is knowing who your competitors are and how they tick. In the revenue management world, we refer to this as “who is in your compset?”. Having an effective compset allows you to benchmark how your property is performing; these are the properties to which you compare your sales and prices to, as they are likely the ones you are competing with for guests. Knowing who should be in your compset, however, is not an easy task.
In the independent hotel market, while there may be properties that are similar to each other, no two hotels are exactly the same. Hotels differ in their age, location, style, proximity to destinations, and hospitality, just to name a few attributes. So how do you effectively develop a compset, that reflects who your true competitors are?
In the “good-old-days”, a revenue manager would benchmark their property by physically surveying their competitors. They would go to that competitor property, ask for a tour, and take notes on amenities, location, cleanliness, room design, and hospitality among several other aspects. They would then compare how their own property performs relative to this competitor, and whether or not their room rates are reflective of that difference (or similarity) in performance.
While this physical benchmarking is still a great way to understand the competition you have in your hotel community, it no longer plays as strong a role in determine room rates. Guest opinions, and their reviews, are now the gold standard that defines how a hotel is performing, and what the value of that hotel is. The Spiegel Research Center found that online reviews have a direct and quantifiable impact on consumer behavior. That’s where Innskeeper Revenue Management can help. Using your own hotel revenue goals, who your compset is, and guest reviews of your property, we can provide daily room rate goals that are reflective of the guest-perceived value of your property relative to your competitors.