The idea of a competitive set is not new to the hotel industry. A quick Google search will result in 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 within your market, you have a privileged understanding of your hotel, the neighborhood, and the city you are located in. Travelers regardless of their purpose within your market might have a very different perspective and comprehension of this. At Rate Yield, we don’t believe that a hotel is limited to only one comp set, but rather competition that differs based upon the guests you are seeking to appeal.
For benchmarking, you will likely want to pick hotels that resemble you the most in terms of location, services offered, pricing and star rating. The comp set definitions found online are mostly aligned with the benchmarking comp set.
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 the 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 during his visit into the city. They may seek 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 and per diems designated by their company.
For leisure travelers, the traditional view of a comp set 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 selecting 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 to accommodate for this, 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 comp sets based on segmentation, day of week or seasonality. Not all competitors are created equal and consequently should not have an equal bearing on your suggested pricing. Furthermore, with our advanced competitive set module that includes weighted scoring, hotels can include competitors which 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 below.
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
