RM - How to define your competitor set
At one of our recent revenue management meetings we were asked how does a new property define its competitive set. Following are the basics:
1. You must establish your real competitors, both online and offline. You consider properties of similar star ratings; similar room counts and similar location. Use your local knowledge and search engines to help identify these competitors. Some OTA extranets include competitor set pages that are very helpful with this process.
1. POC (Point of Comparison): Consider properties that are similar in all areas including rates sold. If there are few similarities, they are unlikely to be competitors. The more POCs, the more likely they are in your competitive set.
2. POD (Point of Differentiation): After you have found the similarities what are unique differences? This unique difference could push them out of consideration as a competitor. E.g., if you are purely a leisure resort and you are comparing against a Wellness Resort you are clearly not competitors and they should not be included in your competitor set / if you are a property with corporate target market a property that targets family market should not be included.
These processes help you establish your competitor set and what makes your property different. You should now work on a SWOT (Strengths, Weaknesses, Opportunities and Threats)analysis, that helps your analysis further.
This analysis should be revisited frequently.