If you’re running a hotel business, you need to have performance metrics and know what your competition is doing so you can do it better. Therefore, it’s important to understand hotel benchmarking and how to use it to your advantage.
But what is hotel benchmarking? In this article, we’ll give you a hotel benchmarking definition and explain the advantages of hotel benchmarking. We’ll also provide some common hotel benchmarks that you can use to measure your hotel’s performance, as well as instructions on how to identify your competitors and perform competitor analysis.
What Is Hotel Benchmarking?
Hotel benchmarking is a process of measuring your hotel’s performance against other similar hotels (competitors) in order to identify areas where you can improve. This process can be applied to any area of your hotel business, such as revenue, occupancy rate, customer satisfaction, and more. By benchmarking your hotel’s performance, you can see how you stack up against your competitors and make changes to improve your hotel’s overall performance.
There are two types of hotel benchmarking:
- Internal hotel benchmarking: This is when you compare your hotel’s performance against other hotels in your company. This can be helpful in identifying which hotel locations are performing well and which ones need improvement.
- External hotel benchmarking: This is when you compare your hotel’s performance against similar hotels that are not in your company. This can be helpful in identifying areas where your hotel needs improvement.
Advantages Of Using Benchmarks
There are many advantages of hotel benchmarking, such as:
- Helps you identify areas where your hotel needs improvement.
- Helps you find ways to improve your hotel’s overall performance.
- Helps you track your hotel’s progress over time.
- Helps you make decisions about where to allocate resources.
- Helps you measure your hotel’s performance against your competitors.
Common Benchmarks In The Hotel Industry
There are many hotel benchmarks that you can use to measure your hotel’s performance. Some common hotel benchmarks include:
- Revenue per available room (RevPAR)
- Occupancy rate
- Average daily rate (ADR)
- Length of stay
- Customer satisfaction score
How To Identify Your Competitors
When starting hotel benchmarking, it’s important to identify your competitors and see what makes them successful. Then, you can use that information to improve your own hotel’s performance. Here are some tips on how to identify your hotel’s competitors:
- Look at hotel directories: Hotel directories, such as TripAdvisor, can be a great way to find similar hotels in your area.
- Ask your customers: Your customers can be a great source of information about other hotel options in your area.
- Search online: A simple Google search can help you find hotel competitors in your area.
- Check out hotel booking sites: Hotel booking sites, such as Expedia and Booking.com, can be a great way to find similar hotels in your area.
How To Perform A Competitor Analysis
Once you identify your competitors, you need to perform a competitor analysis in order to benchmark your hotel’s performance. Competitor analysis includes:
- Researching your competitors: This involves gathering information about your competitor’s hotel, such as their location, room rates, amenities, etc.
- Comparing your hotel to your competitors: This involves comparing your hotel’s performance against your competitor’s hotel in areas such as revenue, occupancy rate, and customer satisfaction.
- Identifying your hotel’s strengths and weaknesses: This involves identifying what your hotel does well and what it could improve on.
- Developing strategies to improve your hotel’s performance: This involves developing strategies to improve your hotel’s performance in areas such as revenue, occupancy rate, and customer satisfaction.
By performing a competitor analysis, you can benchmark your hotel’s performance and identify areas where you need to improve.
How To Use Your Data To Create Performance Metrics For Your Hotel
Once you have your data from your competitor analysis, you need to create the performance metrics we mentioned above and compare them to those of your competitors. To do this, you need to:
- Choose the metric you want to track: You can choose from metrics such as revenue, occupancy rate, customer satisfaction, etc.
- Set a target for your hotel: Once you choose the metric you want to track, you need to set a target for your hotel. This will help you measure your hotel’s progress over time.
- Calculate the performance metrics for your competitors’ hotels: Once you have your target, you need to calculate the performance metrics for your competitors’ hotels. This will help you benchmark your hotel’s performance against each competitor’s hotel.
- Compare the performance metrics of your hotel and your competitors’ hotels: This will help you identify areas where your hotel needs to improve.
- Come up with a strategy for improvement: This involves coming up with a strategy for improving your hotel’s performance in areas such as revenue, occupancy rate, customer satisfaction, etc.
Final Thoughts
As you can see, a lot goes into hotel benchmarking. However, it’s a critical process for any hotelier who wants to improve their hotel’s performance. By following the tips and advice in this article, you’ll be well on your way to benchmarking your hotel like a pro!