The idea of a competitive set is not new. A quick Google search will find you hundreds of definitions and step-by-step guides with a very similar train of thought: look at the quality of the hotel (star rating & reviews), the location, and the facilities (including meeting rooms and on-site services).
As a hotelier in your market, you have a privileged understanding of your hotel, the neighbourhood and the city you are located in. One that most travelers do not have. At Rate Yield, we don’t believe that a hotel has only one comp set, but rather competition differs depending on the client you are trying to attract.
For benchmarking, you will likely want to pick hotels that are the most similar to you in terms of location, services offered, rates, star rating. The comp set definitions found online are most aligned with the benchmarking compset.
For corporate groups, meetings and events, clients will likely make decisions based on meeting facilities, number of guest rooms available, proximity to office buildings or convention center, weekday rates and brand or loyalty points for the meeting organizers.
For individual business travel location will be important as the traveler has a specific purpose for being in the city. They may want to have breakfast available, room service, a gym or other conveniences offered at the hotel. Brand and loyalty points may be a consideration, and the price will matter as business travelers have budgets designated by their company.
For leisure travelers, the traditional view of a compset does not represent the shopping experience. Allow me to demonstrate with a personal example. I plan to travel to New York City over Thanksgiving weekend with my husband and two young children (3 and 1 years old). We have two other trips planned this year so the most important factor I am looking at when picking a hotel is the price. I also need to consider that my one-year-old still sleeps in a crib, so we need space in the room for that, the kids go to bed early so a suite would be ideal, and I don’t mind traveling from a hotel that is not centrally located because my son will be impressed by the subway, a bus or even a ferry. Lastly, we will be going by car so the cost of parking will be a consideration for me. I had originally planned on staying in Brooklyn, but unfortunately the hotels in Brooklyn do not satisfy my needs for the price I am willing to pay. Instead, I am considering hotels in New Jersey or Staten Island which have offerings closer to what I am looking for.
At Rate Yield, we believe that you should be able to account for different compsets based on day of week or season. Not all competitors are created equal and so they should not have an equal bearing on your suggested pricing. By developing our competitive set module with weighted scoring, hotels can include competitors they aren’t part of their benchmarking comp set at a lower level of significance. This allows the pricing suggestions to better reflect the options that travelers have when visiting your city.
If you’d like to know more about our groundbreaking benchmark pricing, schedule time with one of our representatives here: BOOK A DEMO.
About Rate Yield
Rate Yield was created in 2019 by seasoned Revenue Management consultants with over 30 years of experience within the field. Rate Yield RMS was designed to adapt to small hotels, inns, resorts as well as large hotels in city centers. With settings and thresholds that can be modified against a hotel’s unique market trends, Rate Yield makes it more accessible than ever to implement AI in revenue management strategies. With real-time insights, agile strategy development, modules for budgets and forecasts, as well as a tool for displacement analyses, Rate Yield provides a complete software that will help your hotel to yield more revenue, period! To learn more, visit us at www.rateyield.com.
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