Rethinking Hotel Competition: Challenging the Status Quo in the Travel Industry

In the ever-evolving landscape of the travel industry, traditional practices often face scrutiny under the lens of innovation and progress. One such practice that warrants reevaluation is the way hotels determine their competitors. For decades, hotels have adhered to a rigid framework, selecting 4-5 competitors based primarily on proximity, segment / brand similarity, and price positioning. While these criteria have served as reliable markers, are they truly reflective of the complex dynamics shaping today's hospitality landscape?

At SpotQuest, we contend that the conventional approach to identifying hotel competitors may be too narrow, particularly in three distinct circumstances.

Firstly, the rigid categorization of hotels into star ratings and segments overlooks the nuanced differences that set establishments apart. While classifications such as upscale or midscale provide a semblance of order, they fail to capture the diverse array of reasons why travelers choose one hotel over another. Factors like room size, service exclusivity, location advantages, etc. can significantly influence consumer preferences, transcending standardized categories.

Secondly, emerging destinations present a unique challenge to the traditional model. In locales where the hospitality infrastructure is still nascent or limited, the pool of comparable hotels within the same category may be sparse. In such instances, hotel executives must adopt a more expansive mindset, considering factors beyond conventional metrics to gauge competition accurately.

Lastly, the principles of supply and demand, coupled with the purpose of travel, introduce a layer of complexity that defies traditional categorization. Travelers often have specific intents, whether it's attending a conference, embarking on a beach holiday, or exploring cultural attractions. In scenarios where only a handful of hotels cater to a particular purpose with unparalleled access and experience, these establishments inevitably vie for the same market share, irrespective of their brand or category association.

In light of these observations, it becomes evident that the current industry practices surrounding hotel competition warrant a paradigm shift. Hoteliers must embrace a more holistic approach that transcends conventional boundaries and embraces the multifaceted nature of consumer preferences and market dynamics.

By challenging the status quo and rethinking how hotels identify their competitors, industry stakeholders can unlock new opportunities for innovation, differentiation, and strategic growth. It's time to move beyond the confines of proximity and segment similarity and embrace a more nuanced understanding of hotel competition in the dynamic landscape of the travel industry.

SpotQuest aims to lead this charge, providing thought leadership that fosters dialogue, stimulates innovation, and reshapes the future of hospitality. Join us in reimagining the possibilities and charting a course towards a more vibrant, inclusive, and competitive hotel landscape.

Action:

At SpotQuest we initiated an effort to deeply study and profile the 2700+ micro neighbourhoods across United States, identifying the brand strength of each hotel brand operator in each individual micro neighbourhood.

Interested to learn more, enrol here to get the series of insights in above (and more market and location) studies.... Link to register: https://lnkd.in/dyUGiNnz