Why Healthy Competition Matters in Hospitality
Albert BarraDecember 7, 2018 · 2 min read
It is common knowledge that monopolies are double-edged swords: if a hotel has the power to set and manage prices as it sees fit, it may initially achieve high returns due to a lack of alternatives. But in the long run, the absence of competition will ultimately cause it to lose its way for lack of benchmarks; meanwhile, the dissatisfaction of its captive guests will mean that, at the first opportunity to switch, they will throw themselves into the arms of the first alternative that comes along. As Kotler aptly said, “no loyalty can withstand a two-cent discount.”
When people say that “competition is good,” many repeat it like parrots, yet deep down they do not fully believe it; it is more of a principle followed out of sheer habit than conviction.
Why is competition good? If we are talking about healthy competition, we must say that it is not only good, but also necessary.
As we noted at the beginning of this article, the best way to improve our performance is by having goals to achieve and benchmarks to follow.
Believe it or not, competition makes it easier for us: how many hotels set their rates based on those of their competitors? In my view, when done systematically, this can create a risk of becoming overly reliant on it. It keeps us alert when making decisions about changes and strategies, pushes us to innovate, optimise time and resources, review and correct, and so on.
In short, it keeps us alive and productive, always pursuing continuous improvement.
And unhealthy competition? It exists and will continue to exist, no matter what we do. What matters is charting our own course regardless of what the rest of our competitors—poor competitors though they may be—do.
How can we benefit from competition? By building ties, sharing experiences and successful management practices. By benchmarking, surrounding ourselves with those we consider the best in their field and learning from them, of course. But also by contributing value so that the benefit is mutual.
Let us compete, strive for excellence, and the rest will follow.
As we noted at the beginning of this article, the best way to improve our performance is by having goals to achieve and benchmarks to follow.
Believe it or not, competition makes it easier for us: how many hotels set their rates based on those of their competitors? In my view, when done systematically, this can create a risk of becoming overly reliant on it. It keeps us alert when making decisions about changes and strategies, pushes us to innovate, optimise time and resources, review and correct, and so on.
In short, it keeps us alive and productive, always pursuing continuous improvement.
And unhealthy competition? It exists and will continue to exist, no matter what we do. What matters is charting our own course regardless of what the rest of our competitors—poor competitors though they may be—do.
How can we benefit from competition? By building ties, sharing experiences and successful management practices. By benchmarking, surrounding ourselves with those we consider the best in their field and learning from them, of course. But also by contributing value so that the benefit is mutual.
Let us compete, strive for excellence, and the rest will follow.