Step
3: Conduct a Competitive Assessment
A thorough competitive assessment
will help your hotel:
- Identify its true competitors for different customer
segments, such as short-term transient (<5 LOS), extended stay
transient (5+ LOS), and group bookings.
- Compare competitors’ pricing structures by length of
stay (LOS) and room types.
- Assess competitors’ product and service offerings from
the perspective of your hotel’s various customer segments.
- Analyze your hotel’s rate positioning and value
relative to competitors using tools like the Rate Value Matrix.
- Identify potential threats and opportunities in terms
of pricing and market share.
Key
Benefits of a Competitive Assessment:
The insights gained from this
assessment will be integral to setting the benchmark rates for your extended
stay hotel. As competition evolves and becomes more sophisticated, it’s crucial
to regularly monitor your hotel's competitors, ensuring you stay competitive on
price and value. A quarterly or annual assessment is recommended.
How
to Perform a Competitive Assessment:
1.
Identify Your Hotel's True Competitors
- Compile a list of potential competitors by reviewing market share reports such as STAR,
focusing on direct competitors for each LOS tier.
- Consider competitors outside your direct category, such
as executive apartments or full-service hotels that might cater to your
target segments.
- Ask guests where they would stay if not at your hotel to identify practical competitors rather than
"ego" competitors.
2.
Enter Your Hotel’s Data for Baseline Comparison
- Open the THRM Competitive Assessment tool and input
your hotel’s general data, such as LOS tier structure, common room types,
and the season being evaluated.
- Include data on competitors, such as their number of
guest rooms, brand, room types, meeting spaces, and LOS tier structure.
3.
Conduct Competitor Visits
- Physically visit competitors identified earlier and use
the 'THRM Competitor Property Visit Checklist' to evaluate each.
- Pay attention to guest rooms, function spaces, and
overall impressions. Update your checklist regularly, ideally quarterly.
4.
Assess Competitor Value
- Use the THRM Competitive Value Assessment to
objectively score competitors based on factors like physical quality,
service, room features, and chain image. Compare their strengths and
weaknesses to your hotel, ensuring consistency in the evaluation.
5.
Shop Competitors’ Rates
- Conduct shop calls to anonymously check competitors’
pricing strategies for different LOS and room types. Record their lowest
non-qualified rates and compare against your hotel’s rates.
6.
Analyze Competitor Discounting by LOS and Room Type
- Utilize the THRM Extended Stay Competitive Discounting
Chart to evaluate how your hotel’s discounts compare to competitors,
identifying any trends in pricing at different LOS tiers.
7.
Evaluate Competitors’ LOS Tier Structure
- Compare competitors' LOS tier structures with your own,
observing any changes and assessing potential impacts of future supply in
the market.
8.
Benchmark Against Marriott Extended Stay Properties
- Review LOS tier structures of similar Marriott brands
(e.g., Residence Inn, Towneplace Suites) in comparable markets to further
refine your strategy.
9.
Use the Rate Value Matrix
- The Rate Value Matrix visually plots competitors
relative to your hotel in terms of rate and value. This tool helps
identify market positioning opportunities and threats. Competitors that
offer lower prices and better value should be watched closely, while those
with higher prices and lower value may present an opportunity to steal
market share.
Competitive
Assessment Summary:
By the end of this step, you should
be able to answer:
- Who are your true competitors?
- What are their LOS tier structures, and how do they
compare to yours?
- What are their pricing strategies?
- How does your hotel’s product, service quality, and
value compare across customer segments?