Hotel Price Competition Analysis

Rate setting: understand your comp set first

Knowing your competition is key to hotel revenue management and attracting guests. Learn about 5 key factors to inform your comp set and determine the best hotel prices.

In order to set the right hotel rates for your property, you need to know how much other properties in your market charge. After all, guests have a choice when it comes to where they stay. When faced with a range of similar properties, guests often make a decision based on the hotel prices in front of them – so it’s crucial that your prices are competitive.

But who exactly is your competition? How do you know where else potential guests shop before booking a room at your property?

You may already be making a mental list. Perhaps you’re thinking of the hotel down the street, or the B&B round the corner? But how are you making your selection: on instinct alone? Instinct has its place in the decision-making process, but it’s important to take a step back and examine the facts and nuances behind your assumptions. Especially when it comes to revenue management and setting hotel prices for your business.

Here are some key factors that should inform your competitive set:


More often than not, travellers look for a location first and an accommodation second. It is clear that location determines your competition when determining hotel rates. However, your property does not necessarily compete with every hotel in your neighbourhood or even town. That said, your competition could be situated further from your property than you might think. Be sure to consider properties in your entire region.


A property’s average daily rate (ADR) is a great indicator of whether or not it should be included in your comp set for hotel prices. You can see how much a property charges for specific room types by researching the property’s listing on OTAs like, as well as their property website. A property which charges well above or below your typical ADR should probably not be included in your hotel rates competitive set.

However, you also need to consider whether or not other properties are accurately priced before classifying them as your competition. Does the ADR match the quality of the accommodation? Would a guest feel over- or undercharged after staying there?

Accommodation Type

Are you a hotel or B&B? A roadside inn or resort? Guests often seek a specific type of accommodation to match their travelling needs. Be sure that the competition you add to your list includes properties of a similar class to help rate managers determine hotel prices. Just as some potential guests look for specific property types, they might have a particular allegiance to certain chains. If you’re not a chain hotel, consider whether you compete for business with local and international chains.

Quality and Amenities

In any business, the quality of a product and/or service has a big influence on how much it costs. The same goes for accommodation providers. Be sure to fill your competitive set with properties that match yours in quality to determine the best hotel rates. A property’s room types and amenities can be good measures of quality when analysing competition. Do you offer a gym and pool? Do you have a restaurant? Some guests make the final call on where to stay based on a property’s rooms, amenities and overall quality.

Traveller Type

Does your hotel property primarily attract the solo midweek business traveller? Maybe families staying for a weekend or longer holiday? Does some of your business come from groups? To help determine the most realistic competition, it’s a useful exercise to identify your property’s target traveller and compare these profiles with other properties in your region.

Your BookingSuite Competitive Set

Using BookingSuite RateIntelligence, you can update your competitive set and manage your hotel prices with confidence. With a clear pricing overview of your competitive set and a forecast of your local market demand, setting your hotel rates is easy and efficient. Learn more about BookingSuite rate intelligence tools

1 Comment

  1. Amber Castle
    April 30, 2018

    Well written


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