Every hotel should undertake both an external and an internal analysis on an annual basis. Here’s what you need to know about performing an external analysis.
An external analysis provides hoteliers with a view of what is happening within the market. This includes consumer trends (demand) and competitors (supply). By understanding the behaviors of both consumers and competitors, a hotel or hotel company can better position themselves to be prepared to meet the needs of — and overcome the challenges specific to — their market.
Questions to ask during an external analysis include:
- Is there any new product that has entered the market since the last analysis that can be considered competition?
- What type of new inventory is entering your market?
- Has any inventory left the market? If so, why? Was it permanently closed? Is it closed for renovations intending to reopen?
- When was each competitor’s most recent renovation?
- Is there construction nearby any of my competitors?
- Have any of my competitors switched flags or management companies since the last analysis?
- What benefits have been added or lost with this change, such as distribution partners, group sales resources, and central reservation contribution?
- Have any of my competitors implemented revenue management systems or changed distribution partners since the last analysis?
- What are the reviews my competitors are receiving on social media sites?
- Are there any significant citywide events that are driving demand? If so, what is the volume of this demand and what dates are to be impacted?
- Are there any citywide events that are no longer returning?
- Have any large corporations moved into or out of our market during the past year? For example, what office sites may now be vacant or are newly occupied? What future economic developments or redevelopments are planned? What is their timing?
- Have any large companies in the market been acquired recently?
- Have any of your primary accounts changed their travel procurement procedures?
- Is there any significant change to how consumers are traveling to the market this year, such as driving versus flying?
- How is the booking process on the competitor sites?
- What are the market’s booking policies, including cancellation periods? What are the market’s cancellation percentages?
- Does the market offer channel-specific booking or cancellation policies?
- What is the landscape of the airlift coming into your destination?
- Have you or your competitors added new fees, such as a resort fee, facility fee, energy surcharge, parking, etc.? If any fees are already in place in your market, have there been any major changes?
Excerpted from HSMAI’s Evolving Dynamics: From Revenue Management to Revenue Strategy — The Study Guide for the Certified Revenue Management Executive (CRME) Certification, by Kathleen Cullen, CRME.