The way we manage competitive sets is probably my favorite part about Rate Yield and my favorite topic of conversation as a business development professional. In all aspects of business, defining and understanding your competition is of utmost priority. In my opinion, it is the single most important thing that needs to be assessed before starting any sales or marketing strategic planning. Which is why setting up the competitors in Rate Yield is the first thing we do for implementation.
How many competitive sets do I have?
How should I use them?
How often should I look at them?
So let’s look at each question and see how Rate Yield is designed to help you manage them.
First of all, how many competitive sets do you have? In reality, you have as many competitive sets as you have customers. In practice, that is pretty difficult to manage. Our recommendation is to create different competitive sets for different seasons and to play around with the level of importance you assign to each competitor.
Within Rate Yield you can select any number of hotels that you wish to follow. Each competitor is assigned a weight that can be modified by day of week or by season. Seasons can be defined by specific dates, which means you could create a season for a high impact event or for an entire low season. For each season you can modify which competitors to consider for your property.
Whether you are considering a season where corporate travelers take the lion's share of business or one where families are coming to your market, your competitive set may be different. Rate Yield enables you to reflect those differences in your RMS, with no limit to the number of seasons you create.
How do you use them? If you are a STR user, you will likely select one or two compsets to benchmark against. You may want to set an aspirational compset or you may want to select hotels at your level. In Rate Yield, you could use any compset you want, so long as you understand where you fit in it. You may want to consider a competitive set for group business to consider when using the event evaluator. While we can’t know the quotes being offered by competitors, knowing their public rate on the group dates can help with estimations and directions.
When it comes to your competitors for individual travelers, it is important to keep an eye on guest review scores, placement on search engines, strategies used on their own website as opposed to OTAs and any mobile or member strategies they have in place. Understanding these strategies can help you determine what actions your hotel should be taking to capture your fair share of business.
How often should you look at them? I would imagine most hoteliers are keeping up with new builds and major renovations. That being said, I believe that a competitive set is something that should be reviewed at a minimum once per quarter. If you find that you are pacing behind last year and you can’t figure out which competitor is stealing your share, perhaps it is worth it to widen your selection. Consider hotels that are more highly rated offering exceptional pricing or those that are generally of a lower quality but the value for money is great. If you have selected a competitive set once and you continue to compete with the same group of 5-10 hotels, you will be missing out on opportunities when other hotels in your market change the game.
Rate Yield makes it easy to manage your competitive sets dynamically and to modify them over time. It is in keeping an open mind and thinking outside the box that you are truly able to keep up with the competition and steal market share.
