In today’s highly competitive tourism landscape, hotels must constantly adapt their strategies to the scenarios they face if they want to ensure the success of their business. One of the most effective strategies is using competitive benchmarking for revenue management. Have you heard of it before? If you’re not sure how it works, keep reading.

Benchmarking compares the performance of our property with that of competitors. Through this comparison, it offers a valuable opportunity for reflection and growth, helping us understand where we stand within our target market and, above all, learn from others to improve.

Thanks to benchmarking, it becomes easier to gain a clear view of objectives and challenges, as well as to analyse data and better understand demand dynamics for specific offers. In particular, competitive benchmarking is a direct comparison process with competitors, allowing us to understand how our business performs against the most aggressive players in the market, including pricing levels.

From this perspective, we can test different pricing strategies and discover which rates are most attractive to customers across different segments of our business.

By identifying practices that competitors are already using successfully, we can develop targeted strategic plans that help us reach new business goals—and exceed them.

Comparing ourselves with other properties is also important to understand their marketing strategies and campaigns. For example, if you notice that your email open and response rates are quite low, it may be useful to look at how competitors are running their email marketing campaigns. Through this analysis, you can discover best practices to adopt and refine your strategies to make them more compelling and targeted. As they say, “learn from the best,” right?

Among the most important metrics to evaluate in benchmarking are occupancy, ADR (Average Daily Rate), and RevPAR (Revenue per Available Room). Analysing your performance across these three indicators—compared to competitors, of course—will help you make more informed decisions and develop more effective strategies.

Let’s look at what these metrics represent. Occupancy is the percentage of rooms sold compared to those available over a given period. It is calculated by dividing the number of rooms sold by the total number of available rooms.

Average Daily Rate (ADR) indicates the average price earned per sold room. It is calculated by dividing total room revenue by the number of rooms sold.

Finally, RevPAR (Revenue per Available Room) represents the total room revenue divided by the total number of available rooms.

Analysing these indicators in relation to competitors helps you assess your position in the market.

The days when balancing supply and demand alone was enough to set room prices are over. Today, many factors must be considered to improve revenue performance. In revenue management—where the goal is to maximise revenue through effective pricing and demand management strategies—competitive benchmarking is a valuable ally.

By analysing performance data, pricing strategies, and competitors’ marketing initiatives, a hotel can discover opportunities for improvement and implement targeted strategic actions. This not only helps increase market share but also significantly maximises profits. But let’s take it step by step.

One of the first questions to ask is: how can I understand who my real competitors are?
Every hotel or accommodation facility may compete with others, even very different ones. The real deciding factor is the attention of the final customer. However, there are certain characteristics that help define who your competitors are.
First of all, geographical location, then category and service offering can help distinguish competitors from non-competitors. Other factors include property size, price range, and reputation—meaning how the property is perceived by customers.
These are just some of the variables that play an important role in identifying competitors.
There are various benchmarking tools that allow properties to understand their performance levels in the market or compare them with competitors. This information becomes extremely useful for decision-making, so my advice is to integrate it into your revenue management strategy.
Among the most useful insights are occupancy levels compared to competitors, the days of the week generating the highest revenue, and the dynamics influencing performance.
One of the greatest advantages of benchmarking is the ability to identify market gaps or weaknesses in competitors’ strategies and discover new growth opportunities.
If you’re thinking that maybe you should change your strategy to maximise your results, get in touch with me. Together we will build a tailored action plan designed for you and your property.