Hotel Benchmarking - Why It Is Essential And How To Do It Right!
The Hospitality Industry is a competitive industry with numerous players, hard to please customers and dynamic marketing trends. The Hospitality Market is brutal. If there is a flaw in your hotel, it will be amplified online and word of mouth, while most of your plus points will be overshadowed. The negatives are a big deal while the positives are expected from the guests. That’s by hotel benchmarking is essential.
What Is Hotel Benchmarketing? Why Is It Essential?
If you want to be the best, you need to compare yourself with the best. Hotel Benchmarking is the assessment and comparison of your hotel’s performance with that of your competitors and the best players in your business segment.
For proper benchmarking, you need to compare your business with your competitors - with whom your business is competing, and the top players - someone who is your business role model. Through this, you will be able to understand the position of your business, what your competitors are doing, how you can do it better than them, and what more can you do.
If you want to survive in the hospitality industry, you need to understand the market and the target audience. One of the ways you can do so is by understanding your competitors, and what are they doing to sustain the business. This is especially helpful if you are entering a new market.
In fact, even if you are a long time player, benchmarking can ensure that you stay on top of the game. Customers have numerous choices in hotels, resorts and homestays. Will the customer choose you? This question will be answered when do perform hotel benchmarking.
Tips For Doing Hotel Benchmarking The Right Way
Hotel Benchmarking is a vast topic and is determined by various factors. However, to give you a basic idea, we have listed a few basic tips for doing it right. With these, you will get a basic idea of the things before you progress to more advanced benchmarking concepts and techniques.
1. Understand Your Market
Before you undertake hotel benchmarking, you need to understand the market under which the hotel is operating. The market consists of the target audience, distribution channels and businesses. You need to understand what your audience wants, what are your competitors offering and the mediums through which you can distribute your offerings. Being familiar with it is the first step in the process.
2. Understand Your Competitors
If you don’t understand with whom you are competing against, you will not be able to understand what you need to do to reach the top of your hotel segment in the area. You need to know and understand your competitors to sustain in the business.
What are your competitors doing? How are they able to attract the guests? Should we do the same? What can do it better? What more can be done? These are a few of the questions which will be answered when you will understand your competitors.
3. Keep Track On The Relevant Metrics
Data is essential for hotel benchmarking, however not all data is. Before you go ahead, you need to understand which metrics are important for benchmarking. If you go around looking for information which you don't require will simply waste your time and distract you.
The few important metrics are Occupancy Rate, ADR, RevPAR, ALOS, Direct Channel Performance, Market Penetration Index and OTA Performance.
4. Be Specific With Your Data
If you go around doing data analysis in a broad or vague fashion, you will get confused and waste your time. For example, if you are a homestay in Baga, Goa, don’t start doing data analysis of all the homestays in India. Conduct analysis for homestays in and around Baga only.
The more specific you go, the more useful and accurate data you will get. Analyze competitors based on audience, budget, amenities, location and other similarities.
5. Keep Comparing Past Data
Having the current data is great, but comparing it with the past data will give you more insights than you can imagine. You should not only compare your past performance with the present one, but you need to also compare the entire hotel benchmarking data involving your competitors.
You will be able to see whether or not your competitor has improved and what else they are offering. You can use the data to understand new emerging marketing trends and how your hotel can make use of them.
6. Keep Measuring And Evaluating Your Performace
You need to keep measuring and evaluating your performance. This is why hotel benchmarking is helpful. Benchmarking gives you a standard by which you can evaluate your hotel.
Measuring your performance will help you understand your strengths and weaknesses. If numbers are not up to your satisfaction, you will be able to understand your performance by consistently evaluating your performance!
By following these tips, you will be able to perform hotel benchmarking efficiently. Understanding your market is essential since your business operates within it. You need to know your competitors, what are they doing and what can you do better than the competitors. Read our blogs to understand the hospitality industry and its various trends.