Competitive set analysis for hotels: Understand your competition

What is a competitive set?

A competitive set is a group of rival properties that are selected by a hotel in order to benchmark its performance against similar businesses.

This allows the property to conduct a hotel competitive set analysis that can generate all manner of insights on pricing strategy, market positioning, patterns of demand, weaknesses and opportunities.

Now that we have this competitive set definition, let’s dive deeper into the use of comp set analysis; specifically how this tool might be used by small, independent hotels to improve their performance against their main competitors.

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Why is a competitive set important?

A hotel competitive set is important for a couple of key reasons: it provides your hotel with a performance benchmark by analysing your local rivals, and it gives you the data and insights you need to improve that performance and make better business decisions:

• Performance comparison: A competitive set evaluates key metrics like occupancy, ADR and RevPAR, allowing you to easily compare your performance against similar hotels.
• Pricing strategy: It helps you to optimise rates by giving you insights on fluctuations in competitor pricing and demand.
• Market positioning: It helps you to understand where your hotel sits in the market in relation to your major competitors, and can highlight potential points of differentiation, such as untapped target audiences or undersupplied amenities in your area.
• Guest experience: It can reveal guest preferences, and opportunities to better cater to your target market.
• Demand forecasting: It allows you to more accurately predict seasonal trends and booking patterns by looking at competitor rates and availability.
• Strategic decision-making: It can reveal your most effective approaches to marketing, investments and internal operations.

Competitive set analysis: How to do it

How do you find the competitive set that will give you the insights you need to outperform similar properties to yours? And how do you generate those insights?

You can conduct a comp set hotel analysis by following the basic steps below.

1. Identify your competitors

The first step is to create your competitive set. Search for similar properties in your local area – the ones that your target market will tend to browse and compare with your hotel. Look for listings with comparable price points and amenities, and who target similar guests to you, whether families, couples or solo travelers.

2. Compare metrics and features

Consider the areas of your hotel business that you feel you could improve, or that you believe represent an untapped opportunity, then hone in on relevant key performance indicators that allow you to benchmark competitors in these areas. Metrics might include:

• Pricing: Daily rates, seasonal pricing, luxury rooms, package deals.
• Occupancy trends: Availability across low and peak seasons, weekdays vs weekends.
• Guest experience: Reviews and ratings, common guest feedback.
• Amenities: The unique selling points your competitors offer.

3. Use analysis and template tools

It’s time to analyse your competitors. Any number of tools can be used to gather the relevant data – Google Maps, filtered searches on metasearch platforms and OTAs like Booking.com, Expedia and Airbnb – but a far quicker and easier option is to use a purpose-built comp set analysis template or tool, like Little Hotelier Insights, which lets you to instantly compare the rates of up to ten competitors, up to 90 days into the future.

Competitive set marketing: How to use your competitive to improve your offering

You’ve identified your main rivals. You’ve gained access to the relevant data. Now it’s time to turn insights into action. Here’s how to use competitive insights to make smarter decisions.

Pricing adjustments

By analysing competitor rates and availability, you can set dynamic pricing that maximises both bookings and revenue. If you notice that your competitors are booked out for an upcoming local event, you can increase your prices, safe in the knowledge that demand will outstrip supply. Pro tip: in quieter periods, avoid a ‘race to the bottom’ by focusing on the value you offer, not just the price of your rooms.

Improve guest offerings

Fill local amenity gaps. If no one is catering to corporate travellers, for example, consider offering amenities like a business centre, conference facilities or in-room workspaces. Highlight any unique features your competitors lack, by making it clear that you’re the only hotel in the area to have this amenity.

Enhance your listing

Use competitor listings as inspiration for your own. Identify what they do well, and better it. Identify what they do badly, and capitalise on it. Consider investing in professional photography and videography to put your hotel in the best possible light.

Track performance

There’s no finish line for competitive set efforts, because quality accommodation providers will be doing exactly what you’re doing. Monitor, analyse and optimise your strategies on an ongoing basis, periodically checking for new competitors to add to your set.

I don’t have to overthink Little Hotelier. Little Hotelier delivers, and it makes a huge difference when you trust a system. I absolutely love Little Hotelier’s efficiency which conclusively supports my aims and objectives as a hotelier.

Claire Moseley,

Owner

Derwent House

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Examples of how competitive sets can be used to market your property

Some real-world competitive set examples can help to clarify exactly how a small, independent hotelier might use this strategy to enhance their offering and outcompete their rivals. A few brief examples to illustrate the value of competitive sets include:

Crafting a compelling listing based on competitor insights

• Competitor listing title: “Cozy beachfront studio with a great view.”
• Your listing title: “Oceanfront Escape! Breathtaking Views + Private Balcony” (more descriptive and engaging).

Using pricing insights to run targeted promotions

• Competitor pricing: Rates are lower for weekdays than for weekends.
• Your pricing: A “Stay 3 Nights, Get 10% Off” weekday deal encourages longer stays without significantly reducing rates.

Improving your property’s visual appeal with competitor insights

• Competitor photos: Basic bedroom shots, no lifestyle images.
• Your photos: The guest experience is highlighted through imagery of people enjoying a cozy reading nook, a firepit with marshmallows, or a sunset view from the patio.

Optimising guest experience and reviews for stronger word-of-mouth marketing

• Competitor: Guest reviews mention weak, slow or intermittent WiFi.
• Your hotel: Invest in fast internet with good coverage across your property, and market your hotel as a “Remote Work-Friendly Stay with Super Fast Wi-Fi.”

Analysing your competitors is a data-intensive exercise, so to fully capitalise on competitive sets, you need help from smart tools that can collect and crunch all the relevant numbers. 

And in Little Hotelier you have exactly that…

By Dean Elphick

Dean is the Senior Content Marketing Specialist of Little Hotelier, the all-in-one software solution purpose-built to make the lives of small accommodation providers easier. Dean has made writing and creating content his passion for the entirety of his professional life, which includes more than six years at Little Hotelier. Through content, Dean aims to provide education, inspiration, assistance, and, ultimately, value for small accommodation businesses looking to improve the way they run their operations (and live their life).