Pick Your Competitive Set Smartly - a Winning Secret

Call this a tale of multiple hotel operators who have made very different choices about what constitutes their competitive set. And - predictably - they will get very different outcomes and hit very different excellence targets.

Your prime competitors - as picked by you - in many ways set limits on how good you will get.

Read that again. The hotels you choose to compete with are the ones that will put limits on your greatness.

And it is your choice as to with whom you compete.

You see exactly the same dynamic in sports, chess, dance, and just about every pursuit where there are winners and losers who are determined by excellence. Great competition creates great results.

Of course I understand the pressures. It just is comforting to tell your property owner or asset manager, our prime competitor is XYZ - when you know XYZ is ranked maybe 75th in a market of 150 per TripAdvisor. How hard is beating XYZ?

That's comforting but unwise.

A good competitor helps you grow. A bad one helps you stagnate.

Writing that, I think of an independent resort I know in a tertiary market - one lacking powerhouse national luxury competitors - that has for years pinpointed its primary competitor as another independent, local resort. The predictable outcome? A clumsy pas de deux where you almost expect either or both to trip over the other's feet. Neither even makes the top 5 resorts in TripAdvisor, in a small market.

That definitionally is a competition that breeds nothing good.

Benchmark against the best, that is the path to greatness. When I talk with luxury resort clients, often I ask, What would Aman do? Or Four Seasons? Or Mandarin Oriental? The point is to put the focus on organizations that do what they do with excellence and also with complete understanding of who they are and what they stand for.

In India, I saw the two primary local luxury hotel operators - Oberoi and Taj - benchmark against each other in ways that made both better and stronger. When Biki Oberoi introduced his Villas resorts - essentially a fanciful, contemporary interpretation of palace stays in the era of the Raj - Taj, which had a portfolio of authentic onetime palaces, responded with expensive and well thought out upgrades of those properties. Both got better, much better, and both customarily find themselves notching high scores in "world's best" rankings. That is a competitive duel that has helped both get stronger.

Yet a hotel also needs to be realistic. I know a Manhattan hotel - a very good property but not a great one - that forever has tried to see itself in the same group as the Ritz Carlton and the Four Seasons in that market. That is not useful, it's delusional.

This hotel would have better benchmarked itself against, say, the Loews Regency, perhaps The Plaza. Each, at least in certain respects, a little better than the Manhattan hotel of which I speak and that is good because it forces you to focus closely on what the competitor is doing and what you can do to get better. And getting that much better is within realistic reach.

The alternative: pick a hotel you obviously ought to be better than, declare it the prime competitor and pat yourself on the back for many victories, however shallow and pointless they may be.

Does it take backbone to tell your property owner, "you know, our chief competitor, beats us with its spa, hands down, and their rooms have had soft goods updates more recently than ours? They look a lot swanker." That is not a pleasant conversation. Arm yourself with appropriate TripAdvisor reviews and also with a plan, and a budget, for beating that competitor so you can emerge as the better.

Tell that owner the benefits for him in seeking to beat that competitor. He just may climb aboard.

Then what? Then choose a still better property as your new competitor.

Keep at it, keep getting better.

This is not a market that is kind to stagnating properties.

Pursue excellence today - and also tomorrow. That is how to stay in the winner's circle.