If they execute well, you get to learn from it. If they fail to get results from their strategy, you get to learn from it. No matter the outcome, you learn and benefit. If something works, you might be able to take a similar strategy and make it your own. Even if something fails, there might be an opportunity to improve upon an otherwise good idea (though bad ideas should always be discarded).
If you want to stand out from the crowd, you must analyze the competition. Here are several steps you can take.
Identify Your Competition
It all starts here. If you don’t know who you’re competing with, you can’t develop a legible strategy to compete with them. You need to understand who your competition is, what they’re doing to attract customers, and how well their strategies are working.
So, before you do anything else, determine who you’re up against. Make a list of hotels (and restaurants if you’re a full-service hotel) that’s appealing to the same target audience, and begin to analyze what they’re doing right, and what they could be doing better. Most of all, identify your top 10 competitors.
Every hotel should conduct a SWOT analysis, not just on themselves, but also on their competitors.
What is a SWOT analysis? It’s a test that evaluates your Strengths, Weaknesses, Opportunities, and Threats.
Here are examples of each:
- Strengths. If the cost of labor is affordable, and you’re in a good location, that could be a strength.
- Weaknesses. A weakness might be the high cost of the land or taxes.
- Opportunities. Opportunities might include tourist attractions or annual events that draw large crowds.
- Threats. Disruptive technology, low-cost alternatives, and an abundance of competition could be threats to your hotel.
Again, these are just examples of items that could be slotted under Strengths, Weaknesses, Opportunities, and Threats in any business. You need to conduct an analysis on a case-by-case basis to understand where you and your competitors stand. An honest and in-depth assessment of your hotel can give you a holistic view of how your business stacks up, and what you can do to make the most of your situation.
Track Your Competition
There are many ways to keep tabs on your competition, and they don’t necessarily require a lot of time or effort. Meeting Minds has an article on 10 ways to track your hotel competition – you should study this list and implement relevant tactics.
From signing up for your competitor's email newsletters to scanning their blog posts, social media profiles, and website content, insights can come from a variety of sources. Not only can you find out what their room rates are, you can also discover what kind of people they’re booking.
In this way, you can keep a finger on the pulse of what hotels in your locality are up to, and what you can do to compete with them and outmaneuver them, or zig when they zag, so you always have a unique value proposition.
You need to be proactive in differentiating your business. Once you’ve done your homework, you should have a better idea of things you could be improving in your business or on your property, and things you could be doing better. It’s more than likely that your competitors are doing some things better than you are, and you need to pay attention to those things if you want to establish your hotel as a force to reckon with.
Build your strategy based on the information available to you, and execute against it. If you don’t act, nothing will change.
Measure, Analyze & Tweak
There’s no such thing as a perfect strategy, but the difference between having one and not having one is monumental. A strategy at least gets you moving in a direction. Since a parked car can’t be steered, you need to start moving. And as you begin to build momentum, you’ll identify problems with your strategy. An airplane, when in flight, is off course 99% of the time. It’s because of constant tweaking and adjustment that it’s able to reach its destination.
Strategy is the same way. If you know where you’re going, you can keep adjusting along the way to arrive where you’re trying to get to. But if you don’t know where you’re going, and you aren’t doing anything to get there, you need to break through the paralysis of analysis and start acting.
Sign up for Gourmet Newsletter
Subscribe to our newsletter to get access to exclusive content.Get this newsletter