The Importance of Hotel Benchmarking
Hotel Benchmarking: The Basics
Explore key pointers within hotel benchmarking that will bring success to your business.
Hotel benchmarking, what a powerful decision-making tool! But, are you confident in using this knowledge to boost your business? Are you comparing your hotel’s relevant metrics to others? Are you obtaining the benchmarking results that your business needs to be able to grow your direct bookings? If you’re not 100% confident with your answers, keep on reading. Here, we will walk you through the basics of hotel benchmarking so you can up your game and boost your direct reservations.
Today, many hoteliers have to act in a reactive way, adapting quickly to the constant shift in demand. But how can you guarantee it will be done well? With new software and advanced analytics available, it’s now much easier to assess your data and gain detailed insights without compromising on time.
Hotel benchmarking allows you to track business performance and explains how it compares to your competitors. It allows users to identify your brand’s strengths and areas for improvement, giving you a clear picture of your positioning whilst differentiating yourself from your competition. This is done with accurate and reliable data, enabling you to create a successful hotel direct channel growth strategy.
1. Understand exactly who you’re comparing yourself to
After working around such an international hotel client portfolio, I strongly believe that you can learn from hotels all around the world. Look at it this way: being able to compare your results to hotels in completely different parts of the world that have a similar profile and receive a similar number of direct reservations is a huge learning opportunity. You can shift from a strictly competitive attitude to a learning mindset in this way, resulting in considerably richer insights and conclusions.
This is why figuring out who your competitors are is the first step towards outperforming them. Consider more dynamic compsets instead of the standard idea of a compset to maximize your benchmark strategy.
2. Determine which metrics are important
Many hoteliers still consider that occupancy and ADR are the most important metrics to benchmark. However, there are many other factors that are equally important such as your hotel’s online reputation or price disparities.
As a hotelier, it’s critical to examine and compare the metrics that matter most to your hotel’s strategy while keeping track of their evolution. An interesting area to dive into is your direct channel performance. Having access to this data is highly useful, as it provides you a good understanding of your hotel’s progress at each stage of the booking funnel, not simply a small percentage of website traffic that it’s converting.
3. Examine your data in depth
One of the most difficult tasks for hoteliers is determining where to improve marketing campaigns and strategies in real-time, based on the results of benchmarking tools. Filtering your hotel’s benchmarking data by search dates, travel party, or even traffic source can provide a great deal of information about your hotel’s strengths and limitations.
Let’s look at an example. Imagine filtering your hotel’s average booking value data for a specific travel group: couples. When you use this filter, you’ll be able to see how much couples spend on average on your own direct website for accommodation, and compare the findings to your compsets.
4. Compare against previous periods
Even though benchmarking is built on the idea of comparing results against previous time periods, whatever worked for your brand previously may not necessarily be successful moving forward.
Relying exclusively on historical data can be outdated, especially within the current climate. Therefore, in order to acquire a more accurate picture, it is essential to look at other additional data sets such as this week’s performance to last week’s. As a result, you will gain a more accurate picture of your performance.
5. From benchmarking to action
Hoteliers may be left wondering what to do when there’s a large discrepancy between their outcomes and their compsets. To be able to take advantage of growth opportunities and find new revenue-generating ideas, it’s critical to look for ways to improve your metrics. This means not simply focusing on poor results, but also when your results exceed the competitors.
Furthermore, once you’ve implemented adjustments based on benchmarking findings, you should track the progress over time to observe how these changes could affect business’ future outcomes.
Getting started with hotel benchmarking
There are a variety of benchmarking tools accessible in the hotel landscape, but finding the right tool for your business can be a challenge. This is why THN has released BenchDirect, the first benchmarking platform designed particularly for your hotel’s direct channel. With BenchDirect, we’ve adopted an entirely new approach whereby we can provide the real-time data about your hotel in comparison to the market and competition.
And that’s not even the most interesting part. Did you know that it will always be a FREE service for hoteliers? Don’t believe us? Check it out for yourself and sign up for a free account to join the 12,000+ hotels that have already started a journey to improve their hotel’s direct channel performance.