How to Eyeball the Competition

Hotels Understanding the Traveler's Point of View

By Bhanu Chopra CEO, RateGain | July 02, 2017

The hospitality industry worldwide has witnessed disruptive growth over the last few years. With an explosive influx of all kinds of hotels, both big and small, competition is at an all-time high. However, this is great news for travelers as they are spoiled for choice, with a variety of options to choose from. Combine this leverage for travelers with the internet emerging as a strong search and transaction channel, and with the role of Online Travel Agencies (OTAs) getting stronger each day, hoteliers are now under immense pressure to ensure high visibility across all leading online platforms with an aim to drive a maximum number of bookings.

A recent research indicates that almost 60% travelers make their bookings through OTAs as compared to 27% of bookings are made through the hotel's own websites. There is no doubt that OTAs play an important role in the hospitality ecosystem and how your hotel is priced, ranked and rated on all these platforms, definitely needs to be tracked and monitored closely as part of your hotel's pricing strategy.

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Having said that, a key challenge that most hotels face in this cut-throat competitive era is the ability to define their key competitive set correctly, which they need to monitor closely and factor it in their pricing and distribution strategy to ensure increased bookings and revenue.

"If a traveler is considering booking my hotel, which other hotels apart from mine is he most likely considering?" If you get an answer to this one, you have probably hit the nail right.

Competition monitoring should be a primary element of your hotel's pricing & distribution strategy as the need to react to market changes at a lightning speed is the key to your hotel's success. That being said, the first and foremost step in this direction is to be able to define your hotel's most relevant comp-set. Most hotels today define their comp-set based on traditional factors such as geographic proximity & star rating. This clearly shows that hotels have failed to improvise on this method for long now and are clearly ignoring other important factors such as eyeball competition. So what exactly is eyeball competition? Let us find out in the next section as we discuss the challenges in the current method and introduce you to the concept of eyeball competition:

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Eco-Friendly Practices: Corporate Social Responsibility

The hotel industry has undertaken a long-term effort to build more responsible and socially conscious businesses. What began with small efforts to reduce waste - such as paperless checkouts and refillable soap dispensers - has evolved into an international movement toward implementing sustainable development practices. In addition to establishing themselves as good corporate citizens, adopting eco-friendly practices is sound business for hotels. According to a recent report from Deloitte, 95% of business travelers believe the hotel industry should be undertaking “green” initiatives, and Millennials are twice as likely to support brands with strong management of environmental and social issues. Given these conclusions, hotels are continuing to innovate in the areas of environmental sustainability. For example, one leading hotel chain has designed special elevators that collect kinetic energy from the moving lift and in the process, they have reduced their energy consumption by 50%  over conventional elevators. Also, they installed an advanced air conditioning system which employs a magnetic mechanical system that makes them more energy efficient. Other hotels are installing Intelligent Building Systems which monitor and control temperatures in rooms, common areas and swimming pools, as well as ventilation and cold water systems. Some hotels are installing Electric Vehicle charging stations, planting rooftop gardens, implementing stringent recycling programs, and insisting on the use of biodegradable materials. Another trend is the creation of Green Teams within a hotel's operation that are tasked to implement earth-friendly practices and manage budgets for green projects. Some hotels have even gone so far as to curtail or eliminate room service, believing that keeping the kitchen open 24/7 isn't terribly sustainable. The May issue of the Hotel Business Review will document what some hotels are doing to integrate sustainable practices into their operations and how they are benefiting from them.