What are the best benchmarking strategies for hotels to optimize revenue management?

1 Why benchmarking matters

Benchmarking is not just about tracking numbers and rankings, but about understanding the factors that influence demand, supply, and pricing in the market and how to leverage them to increase occupancy, RevPAR, and ADR. This process can help you set realistic goals for your hotel based on market conditions and customer preferences. Additionally, it allows you to monitor your performance against competitors and the market to identify both gaps and strengths. With benchmarking, you can adjust your pricing and distribution strategies according to market trends and demand patterns. Moreover, it provides insights into customer behavior, preferences, and satisfaction levels. Finally, benchmarking can help you improve quality and service standards to enhance your reputation and loyalty.

2 How to choose your benchmarks

When selecting the best benchmarks for your hotel's performance, it's important to consider your hotel's size, location, category, and target market. This will ensure that the benchmarks reflect your hotel's characteristics and positioning, and are relevant for your customer segments and distribution channels. Additionally, you should pick benchmarks that align with your hotel's vision, mission, and values, and that support your revenue management strategy and tactics. Furthermore, make sure the benchmarks are based on reliable, accurate, and timely data that is easy to access and analyze.

3 How to collect and analyze benchmarking data

If you want to collect and analyze benchmarking data, you need the right tools and methods. Depending on the type of data you need, you can use different sources and techniques. For instance, online tools and platforms such as STR, OTA Insight, RateGain, and Revinate can provide benchmarking data on occupancy, RevPAR, ADR, market share, customer reviews, and ratings. Additionally, mystery shopping and audits can be used to collect benchmarking data on competitors' quality and service standards, facilities, amenities, and customer experience. You can also use surveys and feedback from customers to gain insight into their satisfaction, preferences, and expectations. Utilizing tools such as Net Promoter Score (NPS), Customer Satisfaction Index (CSI), or Customer Effort Score (CES) can help you analyze this data.

4 How to use benchmarking data to optimize revenue management

Once you have collected and analyzed benchmarking data, you need to use it to optimize your revenue management. Identifying your hotel's strengths and weaknesses and creating action plans to improve performance is one way to do this. You should also evaluate your pricing and distribution strategies, segment your customers, and tailor your offers and promotions to their needs. Enhancing quality and service standards can help with customer loyalty and retention. Lastly, monitoring your results and tracking your progress is essential for celebrating achievements and learning from failures.

5 How to avoid common benchmarking pitfalls

Benchmarking can be a powerful tool for revenue management, but it can also have some pitfalls if not done properly. To avoid common benchmarking pitfalls, you should focus on the most relevant and meaningful indicators for your hotel, considering the context and factors that affect your benchmarks such as seasonality or market changes. Additionally, you should use benchmarking data to inform decisions and actions, and review your benchmarking data and results regularly to ensure you are not relying on outdated or irrelevant data. By following the best benchmarking strategies for hotels, you can improve your revenue management and achieve your goals.