What are the Top Hotel Benchmarking Tips and Strategies for 2022?

“This is a hot topic and one that drives us to understand more about what metrics really matter. Driving the direct channel is a top priority for our hotels so how a guest interacts with the website, the social channels and our paid media is something we look closely at.

Rates and rate disparity for a hotel and the immediate competitor set gives us a good base to plan what metrics we should be benchmarking. To drive the direct channel and achieve the expected results, pricing is a key consideration. Finding out how a guest finds you, what influences their behaviour, whether they are price or experience-led will help us set metrics that are suitable for each individual hotel and then we benchmark how the KPI’s perform month-on-month.

Website traffic is an obvious metric. When website traffic fluctuates, is sales conversion affected and by how much? So we look at website traffic, booking engine traffic, the volume of bookings and the pick-up needed to hit the commercial KPI’s set, which hotels share with us. We compare quarter by quarter and look at the trend lines for the class and region of hotel. We use anonymised data to look at trend lines. We also look at search dates and where the searches are conducted. This will flag up whether there is an emerging market for a hotel and whether that should be explored.

STR and Hotstats are our go-to for understanding our hotels’ competitor sets. These industry-led benchmarking reports give us context. We do benchmark our hotel’s competitors, but we always consider the hotel brand position and the audience profile. A hotel next door is not a competitor if you operate in entirely different markets. One hotel may be getting a high volume of traffic versus another – so yes, it’s something to consider, but do you benchmark the quality of traffic? The proof is in the commercial pudding. Performance is what matters.

The guest experience is the top priority, i.e., the guests’ online journey. We regularly benchmark our sites, speed, images, rendering, changes to the user experience, etc. But most importantly, we try to identify what strategy is driving guests into the booking engine and what is driving conversion (whether it’s the price, a keyword, etc.), tracking the impact of a PR campaign or simply benchmarking the splits between direct business and all other channels.”

“Benchmarking is important especially within your destination. However, I am under the impression that nowadays hoteliers should not benchmark themselves against other players in the same industry, but rather with different industries that share the same values/customers in order to explore adjacencies and learn from nearby industries. In the end, the customers you are targeting have different experiences with different brands: we should be able to ‘tune-in’ with the top brands or at least with the ones we share values with.”

“Channel Mix has been a long-standing metric for digital marketers. But, looking at your own website (or OTA) metrics against yourself needs to evolve. By using Demand360 or Kalibri we can better understand our channel mix against the comp set. Additionally, ROI (or ROAS) by itself is a worthless metric. Again, we must measure against the competitors, which you can do with Expedia Travel Ads. We also need to understand where in the customer flywheel that paid spend affected the customer journey and how it affected the hotel’s total performance and segments.” 

“In my opinion, benchmarking and the focus it has in hospitality is overrated, especially in these challenging times. There are so many (additional) differentiators in a pandemic like this, it is impossible to compare yourself objectively. So maybe this is the time to stop focusing on benchmarking/comparisons?

Another part in this is that by comparing ourselves with others, we look at logic, try to find explanations or validation for our results. It is focused on the past, a place where we have zero influence on the results. It also paves the way for having preset conditions of realistic goals to achieve. This kills any form of creativity or aiming for exceptional results, beyond expectations.

The power of creating results lies within your circle of influence. Focus only on this and you will definitely outperform the competition.”

“Benchmarking ourselves within our market and against our competitors will be the key to determining our success. We will no longer be able to look for monthly or annual growth as 2020 and 2021 are distorting our statistics. Hence, we will need to use external sources for Benchmarking. OTA analytics, STR, conversion rates, Google, social media etc. will all form part of our toolbox for analysing success.”

“The past two years have changed the game for hotel operators. The only thing predictable for 2022 budgeting is uncertain, volatile demand. As a hospitality consultant, my main objective is to help hoteliers produce reliable business plans and my area of expertise is creating an automated digital environment. I have seen a movement in hotels not benchmarking themselves against their competitors, as in the past 18 months, competitor properties have been temporarily closed (converted to quarantine hotels and so on). There is a trend of not being reliant on staff due to shortages and instead to be more touchless and operate digitally.”

“We currently have a number of tools that we’ve used to benchmark in the past. However, these tools are no longer valid. Booking patterns and customer behaviour have all changed, and I think that as we get used to the new way of doing business, new tools will emerge. It is evident that when talking to hoteliers and senior management, things are very different and everyone is trying to find the best and most cost-effective way to work. For example, most companies used to measure RevPar but now they are measuring TRevPar.”

“When I was VP Sales, Marketing and Revenue for the Library Hotel Collection, I spent very little time worrying about what KPIs other hotels were hitting or missing. We were focused on our own growth; let the competition worry about what we are doing. We were on our own journey of continuous improvement. Sure, we were open to observing new trends and exploring new technology, but only if the tech helped to support our targeted growth goals or solved an obstacle that we identified.

We competed each day with how we performed yesterday, always striving to outdo past performance. That independent journey helped to consistently put us top of the list on Tripadvisor, which helped us attract new guests and create loyalty that gave us a powerful advantage in market share and profitability.

Our primary KPIs other than ADR, Occupancy, revenue and profitability were our ratings on Tripadvisor and other review sites. I highly encourage all hoteliers to focus on NPS as a leading KPI. Additionally, the actions needed for great reviews, guest loyalty and retention are EXACTLY the same actions that inspire employee loyalty and retention, and don’t we all need that these days.”

“Hotel owners and operators continue to struggle with profitability. Even with demand returning in more leisure markets with top-line revenues back to 2019 levels, the struggle with employee retention and understaffing will continue. That being said, benchmarking will shift to a more TRevPAR (Total Revenue) and GOPPAR (Gross Operating Profit) versus the historic RevPAR benchmarking. From a marketing standpoint, an increased focus on benchmarking for conversion and share-shifting from competition will be a focus! And yes, you can shift business from your competition using digital marketing so you better know which ones are most successful for your properties.”

“At the moment, we benchmark our competitors’ rates in order to anticipate their strategies through STR, HQ Revenue reports daily, online booking platforms and the competitors’ website. For level of service, product and location site inspection, we are using Trust You reports. As for our future benchmarking strategy, we are planning to use a platform for monitoring events from our competition.”

“Today, every hotel in the world has not one, but THREE categories of direct competitors that should be taken into account in your revenue management practices and you should benchmark your property against:

• Official Comp Set: This is your traditional comp set, included in the property’s dSTAR Report by STR or rate shopping report by Fornova. These reports provide real value by benchmarking how well your property is performing against the “official” competition. Unfortunately, monitoring and benchmarking only this “official” comp set is no longer sufficient. There are two additional categories of competitors that are after your property’s business 24/7 and their effectiveness in taking market share from your property quite often far exceeds the one of your official comp set.
• Your property’s Digital Comp Set: These are properties that dominate the search engine results pages (SERPs) on the search engines for keyword terms that are very relevant to your property’s product. If you are a boutique hotel in downtown Houston, search Google using the keyword term “boutique hotel downtown Houston”. If you are a 4-star hotel near Hyde Park in London, do the same and search Google for “4-star hotels near Hyde Park in London”. Do a similar exercise if you a hotel with a rooftop bar in Manhattan. Or a spa hotel on the Magnificent Mile in Chicago.
• Your property’s Short-term Rental Competitors: Short-term/Vacation rentals now constitute almost one third of reservations for accommodations in your area. In 2020, Airbnb and Vrbo accounted for 29% of total lodging revenue in the U.S., Europe and elsewhere. So, in addition to monitoring and benchmarking your “classic” and digital competitors, you should monitor closely Airbnb’s, Vrbo’s and other vacation rental properties in your market. Research and identify the rental properties in your neighborhood, and what are their typical amenities and features.”

“I think the most common thing to start with is price, as it can often show where the competition is heading in their strategy to acquire customers. Secondly, I would benchmark online conversions and keyword targeting to understand where the competition is pivoting their strategy. For example, ask yourself the following: what are they placing on their ads? What are they bidding for in the auction pool on Google Ads? How much money are they spending on ads? (this often shows how well a campaign is performing and what to target – use a program like SEMrush for this information), what are they communicating the most on their Facebook ads, on social channels, and so on.

Also consider the conversation taking place in the market for your location and niche within the hospitality and travel industry. This is a good place to start when you have no idea where to start. For us personally, we are benchmarking and constantly pivoting our strategy based on the customers’ feedback. As much as we can theorise as marketers and strategists, we don’t have a crystal ball to tell us all the details. For us, the voice of the customer has never been more important as we navigate the seasons ahead.

This is vital data to help you establish your strategy, pivot and build conviction that what you’re doing is not just a hypothesis. We will use this data to benchmark against the competition and what their customers love and hate about their stay and offer. This is our main focus moving forward because giving the market exactly what it is starving for is the fastest way to ensure a high volume of bookings.”

“As an advisor to our hoteliers, we are sharing benchmarks relevant to the individual hotel partners. Mostly to keep an eye on the international key feeder markets, which are difficult to forecast. We continuously watch trends and adapt when we see a shift to help our hoteliers stay ahead.”

“As soon as Covid-19 spread out, several properties experienced a dramatic decrease in occupancy and revenue due to low tourism volume. The main focus now is maximizing ADR without looking at the occupancy which inevitably went down. Due to ups and downs with COVID restrictions, benchmarks will be very dynamic and volatile depending on the situation, and the comp set will vary based on the new goals on a regular basis. We cannot have static benchmark strategies anymore in order to fight against sudden changes.”

“Benchmarking allows organizations to adapt and grow through change and against competitors. Therefore it is important to analyse your benchmarking strategy for 2022 and understand where and what hotels needs to change in order to improve performance. The hotels must identify performance gaps throught the analysis of data and find the best opportunities for improvement. Hotels must innovate and adapt to the markets and find a way to attract domestic tourism, since staycations will be a key trend for this year.

Q1 of 2022 will determine the recovery from the big changes brought by the pandemic, so this year’s strategy must include knowing and evaluating the strategies of one’s competitors, knowing their rates and sales conditions. A strong benchmarking strategy will help hotels decide the right rate only when it is combined with insights from revenue management.”

“We compete against the market, not just a few direct competitors. We measure RGI (revPAR market share) in comparison to last year against multiple sets of competitors (location based, class based, aspirational) and the overall market.”

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