Your Hotel Is Not Competing with Who You Think: Understanding Your True Market Position
If I were to ask you right now what your hotel’s actual position is within its destination, would you be completely certain of the answer?
I am not talking about its official category, average rate, or what the website says. I am talking about something more important: the place your hotel occupies in the guest’s mind.
Because there is an enormous difference between what we believe we are and what we truly represent to the market.
And when that difference is not identified in time, it often translates into lower occupancy, pressure on pricing, uncomfortable reviews, and a constant feeling that “something is happening” while the competition continues to move ahead.
The reality is that many hotels are consumed by day-to-day operations. Between incidents, meetings, budgets, staff, suppliers, maintenance, distribution, online reputation, and a thousand other urgent matters, there is barely any time left to look up and observe what is happening beyond the hotel’s walls.
Positioning is not what you say you are. It is what the guest believes you are.
One of the most common mistakes in Hospitality is confusing identity with positioning.
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Identity is what we want to convey. Positioning is what the guest actually perceives.
You may have a spectacular refurbishment, an impeccable website, and a carefully crafted visual brand. But if guests constantly mention slow service, odours, noise, inconsistent cleanliness, or a lack of attention, that is precisely what you will ultimately be known for.
You may have the most beautiful architecture on the planet, but if guests complain about the smells all the time, you end up being the smelly hotel.
The market simplifies. Guests label. And those labels are tremendously difficult to change.
That is why I always insist on one idea: what matters is not so much what you sell, but what the guest believes you sell.
Online reputation platforms are not simply a showcase for scores. They are a mirror. An uncomfortable one at times, yes. But an extraordinarily useful one.
When you analyse reviews rigorously, you begin to discover which aspects are truly defining your brand. And surprises often emerge: elements you considered secondary turn out to be decisive for the guest, while services in which you have invested heavily generate barely any recollection.
That is why positioning must be built from market perception, not from our own convictions.
How to know whether your hotel is truly well positioned
The first question you should ask yourself is very simple:
Who is really my guest?
Not who you would like them to be. Not who appears in the commercial plan. Not who you imagined when you designed the product. But who books today, who spends, who returns, who recommends you, and who generates profitability.
From there, it is worth asking yourself some uncomfortable but essential questions:
- What problem do you solve better than anyone else? It is not enough to sell rooms. You need to understand the deeper need you fulfil: rest, switching off, status, practicality, wellbeing, location, dining, quiet, convenience, or experience.
- Why do guests choose you rather than another hotel? If the main answer is “price”, be careful. Competing on price alone is usually the fastest route to losing perceived value.
- What do guests say when they recommend you? That is often where your true positioning lies. Not in the marketing brief, but in the guest’s spontaneous remark.
- Which criticisms keep recurring? An isolated complaint may be anecdotal. A recurring complaint is strategic information.
- Which attributes justify your rate? If you cannot explain them clearly, the guest probably does not understand them either.
The best-positioned hotels can usually summarise their value proposition in one clear idea. They do not try to be everything to everyone. They try to be memorable to someone.
And this is where one of the most difficult decisions in hotel management appears: giving things up.
Because positioning means choosing. And choosing means no longer pursuing certain segments in order to focus resources where you can genuinely stand out.
In a saturated market, specialisation tends to outperform generalisation. A hotel that tries to satisfy everyone ends up looking like everyone else. By contrast, when a property becomes the best option for a specific segment, it begins to build a competitive advantage that is difficult to replicate.
Some particularly useful positioning strategies for independent hotels include:
- Positioning through specialisation: becoming the best option for a specific type of guest or travel motivation: wellbeing, gastronomy, adults-only stays, sport, relaxation, romantic getaways, cultural tourism, or flexible work.
- Reverse positioning: removing what adds no value and reinforcing what is essential. The winner is not always the one who offers more, but the one who offers what the guest truly values better.
- Experience-led positioning: moving beyond simply selling accommodation and starting to create memories. The key question is not “what services do we offer?”, but what story will the guest tell when they return home.
- Positioning as an alternative: occupying a space opposite to the dominant one. If everyone promises formal luxury, perhaps you can stand out through authenticity. If everyone feels impersonal, perhaps you can stand out through warmth. If everyone shouts, perhaps you can stand out through calm.
The biggest mistake you can make is trying to attract everyone.
When a hotel wants to be a leisure, corporate, family, gastronomic, wellness, sports, romantic, events, and groups hotel all at once, it risks not being truly relevant to anyone.
Hotel strategy requires focus. And focus requires courage.
Because it means accepting that some guests are not your target audience. But it also means concentrating investment, communication, service, revenue management, product, and team efforts on what can genuinely make you a preferred choice.
Today’s market rewards clarity. It rewards consistency. It rewards differentiation. And it increasingly penalises a lack of differentiation.
That is why it is advisable to review your competitive set regularly. Not only by looking at rates, but by analysing product, reputation, segments, channels, value proposition, guest experience, and brand perception.
You are not competing solely against hotels in the same category. You are competing against every establishment the guest considers a reasonable alternative for meeting the same need.
And that is an enormous difference.
Perhaps your real competition is not the hotel across the street. Perhaps it is a holiday rental, a nearby resort, a well-positioned rural retreat, a city hotel with better connectivity, or even another destination that has explained its value more effectively.
The real question is not whether your hotel has competitors. We all do.
The real question is whether your guests clearly understand why they should choose you.
When that answer is obvious, marketing becomes more effective, direct bookings gain strength, reputation is consolidated, and your rate is easier to defend.
When that answer does not exist, no advertising budget can make up for a lack of positioning.
My advice is simple: devote time each quarter to viewing your hotel from the outside. Read reviews as though you did not know the property. Compare your website with those of your competitors. Review photographs, rates, promises, experiences, response times, and the consistency of your message.
Do it with humility. The market does not always say what we want to hear, but it almost always tells us something we need to know.
And, above all, do not allow day-to-day operations to stop you from asking the most strategic question of all:
What place do I want to occupy in the guest’s mind, and what am I doing every day to earn it?
Because ultimately, the market always ends up placing each hotel where it believes it belongs.
The question is whether you want to participate actively in that decision or let others make it for you.
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