Benchmarking is not a new practice for hoteliers. Hotel marketing and revenue teams have been leveraging data for a long time, but for digital marketers wanting to set up the right strategy, understanding the market and being able to compare past, present and future performance against the competition is essential.
Choosing the right comp set can really help in gaining insight and to make better informed decisions for your hotel digital marketing strategy, after all understanding who your competitors are is the first step in outperforming them right? Without context, your website sessions, conversion rate, and website revenue might as well just be ‘numbers’. The right comp set can add the required context to help you really understand how your hotel website is performing relative to others. We have a few ideas to help you get started in building your comp set.
What is a comp set?
In simple terms your “comp set” is your competitive set, the hotels that your potential customers are comparing you against when searching for a hotel to book on-line. Typically, these are the hotels you are competing against in your immediate area but there is so much more to consider.
If you use an STR report or another similar tool to benchmark your hotel’s performance (traditional metrics like rate, occupancy, RevPar etc), a good starting point is to use an average daily rate or similar to determine which hotels most closely match your own pricing strategy. This could include hotels that are a different star-category to your own. For example, a very good 4-star hotel may offer the same rates as an average 5-star property. In Hotel Benchmark we use Average Order Value which can help you in benchmarking against similar hotels. Think about an Average Order Value as the total amount a customer is spending on your hotel website before they check-out. It could include accommodation as well as any ancillary products like dinner, a spa treatment etc
This is an example from the Old Course Hotel which offers website users the opportunity to purchase additional services alongside their accommodation, and subsequently will have a much higher Average Order Value than a hotel that only sells accommodation on-line.
If you aren’t benchmarking against hotels that offer similar services and amenities, you may be missing properties that are appealing to the same audience as your own. If you are a corporate hotel with meeting space, an executive floor and a business centre and appeal to business travellers it doesn’t make sense to include hotels with spa facilities which appeal more to a leisure audience. Compare each hotel’s offerings to yours and decide whether it could be a good fit for your comp set.
The size of the hotel and number of bedrooms is another factor to consider in selecting hotels for your comp set. A customer searching for a small boutique hotel is less likely to be looking for a large property and vice versa. In our What is a good conversion rate for a hotel website?article from December, 2020 we looked at how hotels with a larger number of rooms might have a lower conversion rate than a hotel with less rooms and less ancillary services which could be attracting visitors to their site, browsing at restaurants but not booking accommodation. If you are a small hotel, comparing yourself and your results against a bigger hotel could mean your comparisons are skewed.
Use review sites like TripAdvisor to evaluate hotels that earn comparable reviews to your own hotel. You can find guest review scores on other sites like Google or Booking.com that can also help in identifying hotels that are scored/rated similarly to your property.
Brand or Independent
Knowing whether to include independent hotels in your comp set if you are part of a large chain or a brand and whether as an independent you should benchmark against chain hotels essentially requires you to consider this question alongside all of the other factors we have discussed. If you are an independent boutique hotel benchmarking against one of the chains boutique brands you would probably be on the right line.
Regularly evaluate your comp set
Once you have created your comp set, make sure to re-assess it frequently to ensure you include new hotels and remove any hotels that have closed. Hotels in your original comp set may have made significant changes, possibly moving to a lower or higher star category which might make them more or less relevant to your comp set. With Hotel Benchmark you can update your set every 30 days to ensure you can view any new hotels that are subscribing and add those that are relevant into your competitor set.
If you would like more information on our free benchmarking resource, contact one of our team on e-mail: firstname.lastname@example.org