The $64, 000 Question: Who Really is Your Hotel's Competition?

By Bonnie Knutson Professor, The School of Hospitality Business/MSU | November 24, 2013

No matter how game show formats might change over time, the design remains the same: If you answer the question correctly, you win a prize. There is a strong similarity between this game show design and the hotel business today - especially as it relates to identifying your competition. If you can answer the BIG question, you can win the prize. And the BIG question is: Who, really, is your competition? The prize, of course, is increased sales and increased profits.

Unfortunately, many hotel managers and owners don't know who their competition actually is. Oh, they confidently give you an answer when you ask them. And it's probably based on the Star Report, scouting other hotels' reader boards, or additional covert actions. But, more often than not, that answer is incorrect or only partially correct. Why? Because the hotels which management identify as competitors are identified from management's perspective, not from the perspective of the people who truly know the answer: your guests. An example: A hotel with an upscale seafood restaurant was developing a new three-year marketing plan for its eatery. When I started working with them, one of my first questions was, naturally, "Who is your competition?"

Their reply came quickly and confidently. "Oh, that's easy. We're up against 'Restaurant A' and 'Restaurant B' and other fine dining places like these.

"Are you sure?" I asked.

"Oh yeah. Our competitors are all the fine dining, white tablecloth, upscale seafood restaurants in town."

But when I asked their guests ( both hotel guests and locals ), however, the answer to the competition question was quite different. To them, the competition was not 'Restaurant A' and 'Restaurant B' and other fine dining, white tablecloth, upscale seafood restaurants in town. It was Red Lobster.

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Coming up in January 2018...

Mobile Technology: Relentless Innovation

Technology has become a crucial component in attracting and retaining hotel guests, and the need to enhance a guest’s technology experience is driving a relentless pace of innovation. To meet and exceed guest expectations, 54% of hotels will spend more on technology in 2018, and mobile solutions in particular will top the list of capital investments. Many hotels are integrating mobile booking, mobile keys, mobile payments and mobile check-in into their operations. Other hotels are emphasizing the in-room experience, boosting bandwidth and upgrading flat screen TVs to more easily interface with guest mobile devices. And though not yet mainstream, there are many exciting technology developments on the near horizon. The Internet of Things (loT) is taking form in some places, and can be found in guest room control systems, voice activation systems, and in wearable sensors that can be used for access and payment options. Virtual reality headsets are available at some hotels so guests can enjoy virtual trips to exotic locations or if off-property, preview conference facilities and guest rooms. How long will it be before a hotel employs a fleet of robots for room service, or utilizes a hologram as a concierge, or installs gesture-controlled walls that feature interactive digital displays? Some hotels are already using augmented reality for translation services, or interactive wall maps, or even virtual décor. This pace of innovation is challenging property owners and brands to stay on top of the latest technology trends while still addressing current projects. The January Hotel Business Review will explore what some hotels are doing to maximize their opportunities in the mobile technology space.