HOW DOES THE COMPETITION COMPARE?

No one operates any sort of accommodation business in isolation. Even if you are the only hotel on a remote island with no local competition, you are nevertheless competing with other islands, however far away. Customers and guests always have a choice.

It is vital that you take the time to investigate where you fit into the local range of options available to corporate users, leisure guests and meeting planners. This knowledge about your existing direct competition and any new ones will enable you to:

• evaluate your own performance;
• identify and exploit competitor’s weaknesses;
• combat competitor strengths;
• get new ideas;
• maybe identify new prospects.

There is really no need to be scared of this activity. It doesn’t involve anything illegal: you won’t need to put on a black polo-neck jumper and get involved in breaking and entering! Most of the information you need is freely and legally available.

One of the key benefits of any systematic competitor evaluation is the buy-in from the team. I recommend that as many people as possible are involved – receptionists, chefs, housekeepers. You should include overnight stays with simple feedback reports at the end. You can really boost the willingness of receptionists and reservation specialists to go for rate maximisation after they have seen the competition.

Benchmarking

This is a slightly different evaluation, which can be used in a couple of different ways.

• 1Reference: You can choose a hotel on which you would like to model your offer, as a sort of reference point. This does not have to be any competition to you and could even be in another country. You choose it because you consider that its offer will suit your local market. (Be careful about importing services and facilities without checking their local applicability and the costs.)
• 2Evaluating: The other use for benchmarking is in evaluating your business performance. You can check your occupancy and average rate against your local colleagues or a national average. You can also look at food and beverage margins or staff turnover against industry norms.

Another benchmark is the ‘Common Accommodation Standards’, which will apply to all providers of accommodation in Britain from January 2008. These standards will replace the current star and diamond systems administered by the different organisations. They have been agreed by VisitBritain, VisitScotland, the Wales Tourist Board, the AA and the RAC to help customers understand the quality rating given to particular establishments. Any move to reduce confusion must be a move in the right direction but with five categories of ‘hotel’ and five categories of ‘guest accommodation’, it may take the consumer some time to understand the benchmarks and be able to compare one establishment with another.

Your competition is likely to be from those establishments in the same categories and the same start rating but this may not always be the case. Your local knowledge and feedback from clients will tell you your real competition.

Who are your competitors?

These will generally be properties that are also supplying or have the opportunity to supply your current customers. The most important consideration here is that you will be competing with different hotels depending on your different facilities. For instance a hotel that you compete with for corporate business may well not be competition for your meeting facilities. Be realistic about the number of hotels you choose for each of your segments (rooms/meting rooms/restaurants/leisure) and choose no more than five.

What is their offer?

Check your competition’s total offer in the segment that you have decided is competitive. Look at how their service and facilities compare with yours and make sure that you follow the whole experience from start to finish. Check how long they take to respond to an e-mail or a telephone request for information. Are there any aspects of competitive service that you could usefully incorporate?

What are their prices and rates?

This is the start of your evaluation of comparative values. Once you have a summary of their facilities, their prices and rates you can consider whether you think customers will pay more or less for your offer. Does your room product justify an extra £ 10 compared to the competition?

Who are their customers?

This information is sometimes difficult to gain. Nevertheless you will probably find that many of your customers are also customers for your competition. Sometimes it is common knowledge when there are a number of large corporate accounts in an area. You can also check their meetings boards to see who is using the meeting rooms, but don’t forget to wear a hat and a false beard!

How do they promote themselves?

Do they do anything different to you? Do they have a specialist sales executive? Find out everything you can about how they reach their market including their memberships of representation organisations.

How are they organised?

Much of your local competition will be organised in a very different way to you. They could have similar ownership but with a manager, or they could be part of a chain or franchise. All this is very useful information. Find out how many staff they employ and what their turnover is. Maybe some of your staff now work there or vice versa? What is the working atmosphere like?

What are their strengths and weaknesses?

You now need to make sense of all this information. Listing strengths and weaknesses is a good way to summarise information into a usable form. List what they are good at and how it compares with you. Focus on how they meet customer needs and the particular benefits they deliver.

Then list all the areas that they are less good at. Do these give you an opportunity to exploit? These summaries will help you evaluate your competitive edge.

How to gather the information

There are a wide variety of sources of competitive intelligence:

Common contacts

Contact anyone who also talks to your competitors:

• Customers: are they satisfied?
• Ex-employees: anything significant?
• Suppliers: what are they buying/investing in?
• Distributors: have they heard anything from users?

Industry

Make the most of any information they have given out:

• Associations: statements or comments made at local meetings.
• Interviews: maybe something in the local press?

Their own publicity

What they say about themselves:

• Press releases: details may be biased.
• Job advertisements: difficulty in keeping staff or maybe they are expanding?
• Marketing campaigns: what are they planning next?
• Websites: maybe something interesting announced in advance?

Intelligence gathering

This is not really espionage!

• Personal visits: make a good excuse to be a prospect.
• Leaks: you never know where they come from!

Counter intelligence

You could take the view that ‘All’s fair in love and war’ and therefore not worry that your rivals are probably approaching your hotel on the same basis. However the market is tough and you don’t want to give up any advantage unless you have to. The most secure organisation is one where the whole team is focused on the business objectives. If you make sure that all your sales procedures are in place and that you don’t give out price information without a thorough investigation, at least you won’t make your rivals’ job very easy.

KEY POINTS

• Ensure that your product (rooms/restaurant/meeting rooms/ leisure) continues to meet the needs of your market.
• Position your hotel in line with your stated vision.
• Make a list of hotel features and then list the different benefits for each of your major market segments.
• Maintain consistency in your corporate identity.
• Check the outside look of your hotel every day and encourage your team to also consider it their responsibility.
• Constantly monitor the atmosphere inside the hotel.
• Make sure that you and your team constantly check the competition and report back.