How to identify your competitor hotels and why it matters

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Identifying which hotels are your competitors is really important when making your sales strategy. As always in sales and marketing, it all starts with knowing your product, in our case your hotel. Let’s take it from there.

Some of the things you need to take into consideration about your hotel are the target market, the pricing strategy and all the facts like its size, category, location, etc. All of these will determine the hotel’s positioning in the market. As long as you have a clear understanding of your positioning to your market, it’s time to determine which are your competitors and create an efficient competitive strategy.


What is a Competitive Set Analysis?

A Competitive Set (‘CompSet’) is a group of hotels that are competitive to yours. The Competitive Set Analysis is the report we create in order to track these competitors and make important decisions about the hotel’s strategy. sales and revenue

 Why do I need a Competitive Set Analysis?

If you are planning the opening of a hotel, the Competitive Set Analysis gives you an understanding of the market. You can evaluate the supply and demand of the destination and help you make a rational financial projection. 

If you are already operating in the market, you can use the Competitive Set Analysis, this time to reveal if there are missed opportunities for your business. Do you have a fair market share?


Now, let’s see which factors we take into consideration, in order to create an efficient CompSet:


The first thing that comes to mind when we think of competition is which are the closest hotels and not unfairly. The location is where we will start to make a proper analysis of the competition.

Accommodation Type

An additional approach is the type of accommodation. Rooms to let, for example, are not the same product as a hotel. It is good to make this distinction in Competitive Set Analysis, but it is not absolute, as we will see below.

Price or Category

Most of the time we compete with hotels of the same or close category. Even when this is not formal or clear, the price shapes the category or character, if a hotel for example is budget or luxury.

Size – Capacity

The size of a hotel can be a factor when it comes to competition. A different pricing policy will be followed by a hotelier who will have at his disposal 100 beds and a different one who will have 20 beds. In addition, they can compete at various levels based on size, such as host group. On the other hand, as we will see below, it is not absolute.

Apart from the above factors, there are also a few more that may reveal competitive hotels, that we do not see as competitors. When creating a CompSet, we need to consider if a guest would choose another hotel for his/hers stay. So, maybe a traveler prefers budget hotels in general, but when doing online research he/she runs into a hotel more pricey with fantastic reviews and decides to give it  a try. Now, if you have a budget property, you would not consider that hotel as a competitor. Nevertheless, at times it can be.


So let’s see some other factors we need to consider:

Target Purchase or Positioning

A factor of competition is the audience we are addressing. Each hotel has an ID “family”, “adults only”, “suitable for couples”. Depending on this identity, it is addressed to the respective market. sales and revenueExperience

Personalized experiences and experiential travel will become even more important in the new era that is emerging for tourism. The hotels have realized this and are already “selling” the experience compared to the accommodation. This is an extremely important factor when it comes to competition. The search for a traveler can be determined by the experience he wants to have. For example looking for a hotel for yoga retreat, wine tasting or spa services.

Online reputation and reviews

A traveler is very likely to set the good reviews of an accommodation as a filter in his search, thus filtering his online presence. This, in turn, shapes a different competition.

Pricing Policy

The strategy followed by our competing hotels is something we have to follow. It does matter if the hotels in our market are used to “killing” last minute prices or if they make aggressive offers. Even the booking policy, the cancellation policy and the minimum stay for example are factors that influence the traveler’s decision, today more than ever.


In short, competition analysis plays a very important role in shaping the sales strategy. If done wisely, it gives the hotel a unique advantage over competitors. Above all, it gives you a different but important perspective for the development of your hotel business.


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