For years, revenue managers used historical data as a "compass" to navigate rates and inventory. Due to the pandemic, however, historical data lost much of their relevance, as 2020 and 2021 were statistical anomalies, to say the least. In this scenario, other information became more important, such as on-the-books reservations, pick-up, pace, and, of course, comp set. Some hotels have closed and consumer behavior has shifted. 

The challenge, 
however, is how to clearly identify the proper comp set
: is there only one or multiple competitors? 
How should a hotel judge it's performance, when most of the traditional KPIs have become meaningless?

Raul Moronta
Raul Moronta
CRME, CHIA, Chief Commercial Officer at Remington Hospitality

The traditional competitive set selection process in the US has always been driven by financial models, which are developed to satisfy financing and banking requirements. As such, they are usually based on aspirational comp sets in order to show future growth opportunity and return on investment. Regardless, hotels should always have external validation to compare their performance as opposed to only looking at year-over-year factors and get a true measure of current market conditions. In order to determine a relevant comp set, however, hotels should consider the following areas: number of rooms, location & distance from the property, meeting space square footage, and property type or class. However, reality is that in very few instances you can come up with a perfect competitive set of hotels where all properties equally compete on all market segments.

In most cases, hotels compete with different hotels on different market segments, such as Corporate, Transient, OTA, FIT, Group Association or SMERF. Hotels should identify these sub comp sets and create targeted strategies to compete at each level. As the competitive landscape changes, so should the selected competitors. Companies such as STR, Kalibri Labs, and others have developed a number of tools and reporting to do just that, which help our hotels determine how to maximize their revenue streams better than our competitors. 

View all 15 views in this viewpoint