April 27, 2012

Benchmarking Skills...1,...2,...3

One of the most important knowledge for a Revenue Analyst / Manager is recognizing competitor market.

Many Independent hotels in Gulf Countries are telling us "We are already number 1 in our market". When you dig-in their reports, you realize than their hotel is performing 75% above in RevPAR than the remaining hotels, resulting of them being benchmark with inferior hotel products, because it looks good for the owner.

The above might lead to dangerous strategies because you never push your limits from analytical and sales development process. The hotel team goes on "cruise control" when they feel the company is performing at Number One position.

Normally, everyone tends to benchmark against the best within their own industry. People are inherently fearful of change, and benchmarking opens the door for unexpected results to surface.

There are several factors to consider such as location, room categories, number of units (rooms, seats, parking bay, spa treatment room...), star ratings, restaurants, spa, health club, etc. because the hospitality unit best seller is not always our main competitor.

The objective of that post is to determinate the strategy of hotel within market.


Benchmarking is the process of comparing one's business practices from other competitors. There is not single benchmarking process that has been adopted and it is useful to create and maintain a daily database of best practices.

The cost of benchmarking can be reduced through the usage of several internet resources that appeared in the last decade such as MKG, The Bench, STR, TRI Hospitality, Hospitality SIG, Intelligent Spa making make the benchmarking process quicker and more efficient.

Basically, a benchmarking report must answer to the following questions:
- How many competitors are? current and potential competitors, identify them....
- How many rooms competitors have?
- What is their pricing strategy?
- Quality of products and services they offer?
- What are competitors distribution channels?
- Identify competitors facilities?
- What are their differences with us?


Don't be afraid to place a higher star rating hotel in your competitive set, or a brand hotel (Sheraton, Marriott, Radisson, Hilton, Novotel, Sofitel), because those hotels drive a mix segmentation (FIT, Corporate, Leisure Individuals, Web, Groups), and for that reasons there are successful.

Dear Hoteliers / Hotel's Owners,


You should really pay attention to your benchmarking reports because it has a vital aspect on your sales strategies and staff efficiency.


If you have been number one in RevPar (Total Room Revenue / Number of Room Available) for over 6 months, it may be the time to remove a low performing hotel figures, and modified your competitive set with a higher brand. 


This may result of you loosing your number one ranking, however you will place different strategies (price, market mix, yield, forecast...) to gain it back, resulting on an overall performance.

Sooner or later everyone realizes that benchmarking is a necessity for company survival. 


Revenue Regards,


The Profit Therapy Team

1 comment:

  1. It is a business strategy that is used by manufacturers and service-oriented companies alike. While it may involve learning from one's competitors, benchmarking is more focused and narrowly defined than competitive analysis.

    benchmarking for best practice

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