Benchmarking: Moving beyond traditional comp sets and year over year comparison
— 15 experts shared their view
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?
Understanding your competitors today will be vital in shaping your strategy and measuring your performance and success. Depending on your property, the services you provide, your market and your location, your competitive landscape may have changed drastically over the past year. You may now face multiple competitors, including some that were not considered direct competitors before.
To determine your current comp set, we must first get back to the basics in understanding your customer base:
- Who are your customers? – It's important to have a clear understanding of who your potential guests are, review how to segment them and then re-evaluate who else is targeting them.
- What do they want? – Behaviors are changing, so what your customers are looking for (and need) may have changed—and with that their choices. Ask yourself where they would go if you didn't have availability.
- What do they value? – Price sensitivity and perception of value has also changed, so revisit how your services and products are valued by the customer and who else is similar.
Past metrics to measure against competitors are still valid—you want to know your market, rate and RevPAR penetration—but what has really changed is your base. Before looking at these metrics, look at who should be included and how often you may need to adjust your comp set. Market and industry conditions are still changing rapidly.
There are other metrics that could also help you determine your performance and success from a bottom-line perspective. Remember, it's not only about ADR but about net ADR and net RevPAR as well as total revenue and profit contribution, and for these metrics there's really only one hotel you can compare against: your own.