Many hotels think that they capture their fair share or more than their fair share of the market when looking at benchmarking data. The figures can be misleading since they are accumulated over time and do not show the necessary granularity.
Benchmarking as an eyeopener for hotels
The hotel industry has excellent market data. Any hotel can participate in benchmarking by contributing their data and in return receive market data. At any given day hotels know how much of the market they captured the day before.
Research shows that hotels that benchmark themselves against the market are more successful than other hotels. These hotels probably have a better understanding of the market, seasonality, day of week demand patterns and they also have a more outside in view than other hotels. So the market for accommodation is always based on all the reasons for travel for a specific day. The total demand for accommodation at a destination, therefore, matches the need for any given day precisely. No single hotel can change the overall demand with sales, marketing or any other activities unless they create reasons for travel. A hotel can capture a share of the total market.
The challenge is to capture as much of the demand as possible about the capacity for any given day. All hotels would like to know how well they succeeded in capturing the market on any given day, week, month or year. Is your hotel better or worse than other hotels to capture the demand? This is the most critical question. Once you have benchmarking data or facts about the market, you get an answer to this question and can create a strategy on how to capture at least your fair share of the market.
Lack of data leads to bad decisions
What could the reason be that you do not capture your fair share of the market?
The most common reason is a lack of reliable data. If the hotel does not participate in any benchmarking it is impossible to analyze if the hotel captures its fair share of the market.
Even if the hotel participates in benchmarking it is sometimes hard to thoroughly analyze the data day by day to find any patterns that could tell a story why money is left on the table for the competition.
Another reason is that the hotel made strategic decisions on how to capture more of the market demand based on a hunch rather than solid facts.
Sign up for benchmarking to analyze
The most crucial decision for a hotel is to benchmark the performance against the market or a competitive set of hotels. It is easy to sign up with STR, Benchmarking Alliance or Fairmas and the annual fee is reasonable.
The daily reports will show how well the hotel captures the demand in the market compared to the competition. Based on the facts in these reports, the hotel can make better decisions and become more successful in capturing the market.
Powerful to combine market data with reservation data
Demand Calendar takes the analysis of market data one step further by combining market data with the reservation data from the hotel PMS. The hotel can easily detect and analyze gaps in the performance and create a strategy to close these gaps to capture a higher share of the demand in the market.