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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