What is a Competitive Set (Comp Set)?

A competitive set (Comp Set) refers to a group of hotels that are most similar to yours in terms of location, pricing, target market, and amenities. Hotels use Comp Sets to benchmark average daily rate (ADR), occupancy rate, and revenue per available room (RevPAR).

Why is Defining a Comp Set Important?

• Helps set competitive room rates
• Identifies strengths and weaknesses compared to competitors
• Allows for better marketing strategy adjustments
• Provides insight into market trends and customer behavior

Selecting the right competitive set ensures that your hotel can compete effectively and maximize revenue opportunities.

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6 Simple Criteria for Defining Your Hotel's Competitive Set

1. Location

Hotels within the same area are natural competitors, as travelers often choose accommodations based on proximity to key attractions, business districts, or transportation hubs.

• Hotels near an airport usually compete with other airport hotels
• Hotels in the same business district compete with each other
• Hotels near a conference center target similar corporate guests

Tip: Use Google Maps, Booking.com, or other OTA platforms to identify nearby competitors.

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2. Star Rating

A hotel’s star rating plays a significant role in defining its competitors, as guests typically compare hotels with similar standards.

• 5-star hotels compete with other 5-star properties
• 3-star hotels compete with similar mid-range hotels, not luxury resorts

Avoid selecting hotels with drastically different star ratings as competitors, as they cater to different customer expectations and pricing strategies.

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3. Room Rates

Travelers tend to compare hotels within the same price range. Therefore, a hotel’s average daily rate (ADR) should be considered when defining a Comp Set.

• If your hotel’s ADR is $100 per night, competitors are likely in the $90-$120 range
• Hotels with significantly lower or higher rates may not be true competitors, as they attract different customer segments

While price is important, other factors like amenities and target markets should also be considered.

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4. Target Market & Guest Segments

If your hotel caters to a specific type of guest, your competitors should be hotels targeting the same customer group.

• Business hotels compete with others offering business-friendly amenities like meeting rooms and high-speed Wi-Fi
• Budget hotels compete with hostels and economy hotels attracting backpackers
• Luxury resorts compete with other high-end vacation destinations

If your hotel serves multiple guest segments, you may need to define separate Comp Sets for different market groups.

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5. Hotel Type

The type of hotel also influences competitive positioning.

• Boutique hotels should compare with other boutique hotels rather than large chain properties
• Resorts should compete with other resorts rather than city hotels
• Serviced apartments should benchmark against similar extended-stay accommodations

Choosing competitors with the same hotel type ensures more accurate comparisons in terms of service offerings and guest experience.

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6. Amenities & Services

A hotel's amenities significantly impact guest decisions and should be factored into Comp Set selection.

• If your hotel has conference rooms, your competitors should also offer meeting facilities
• If your hotel has a swimming pool and a fitness center, compare it to hotels with similar recreational facilities
• If your hotel is family-friendly, look at competitors offering family rooms and children’s play areas

Selecting competitors with similar facilities allows for better benchmarking in pricing and marketing strategies.

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Conclusion

Defining your hotel’s Comp Set goes beyond just looking at room rates. It requires evaluating six key factors:

1. Location
2. Star Rating
3. Room Rates
4. Target Market & Guest Segments
5. Hotel Type
6. Amenities & Services

Once you’ve identified the right competitors, you can use this data to optimize pricing strategies, enhance marketing efforts, and improve your hotel’s market positioning.