5 Criteria for Choosing Effective CompSet

Category

Revenue Management

I’ve set up 100+ small hotels as my competitors.

And helped 10+ small hotels create CompSets (competitor sets).

This is my 5 criteria for choosing “EFFECTIVE” CompSet:

1. Location & Proximity

Hotels in the same area are more likely to be my direct competitors.

Consider potential competitors within a 3-5 km radius of the hotel.

2. Hotel Class & Star Ratings

If I position the hotel as a 3-star hotel, it makes sense to compare my hotel to other 3-star hotels as well.

Hotels with similar star ratings usually have similar levels of service and facilities.

Travelers also have similar expectations from the same star-rating hotels.

3. Branded vs. Independent

Branded hotels operate under larger chains or franchises.

They benefit from brand recognition and loyalty programs under the brand owners.

Travelers expect different experiences when choosing to stay in branded and independent hotels.

4. Facilities & Amenities

Often, hotels with the same star ratings might not provide the same facilities and amenities.

If my hotel has a swimming pool, I should compare myself to other hotels that have swimming pools as well.

5. Guest Segmentation & Demographics

Hotels in the same area with similar star-rating and facilities can serve different groups of customers.

Some hotels might be strong in the offline segment while some can strong in the online segment.

I can also drill down each segment, for example:

Choose competitors that serve similar segments as our hotel.

Now I'm able to narrow down hundreds, if not thousands, of hotels into a handful of numbers using these 5 criteria.

I can craft my CompSet effectively now which usually consists of 3-8 similar competitors.