Hotels Don’t Compete Only with Hotels: They Compete with Guest Expectations
For decades, hotels have defined competition through destination, category and market segment. But today’s guests build their expectations through every consumer experience they have—from online shopping and restaurants to banking, transport and customer service. This changes the meaning of hotel competition. The challenge is no longer simply to outperform the hotel across the street, but to close the gap between the expectations guests bring with them and the experience they find on arrival. Understanding this shift can become a defining factor in hospitality strategy, innovation and guest experience.
For many years, we have understood hotel competition in a rather comfortable way. We looked at hotels in our category, studied their rates, compared facilities, analysed their online reputation and tried to determine who was gaining market share. It made sense. If you ran a four-star beachfront hotel, your competitors appeared to be the other four-star beachfront hotels. If you managed an urban property, you looked at the urban hotels in your city. And if you worked in luxury, you watched what luxury was doing.
I still consider it essential to understand the competitive set. We need to know how demand is evolving, what prices the market is willing to accept, which products are emerging, how our competitors’ positioning is changing and where guest preferences are shifting. But I am increasingly convinced that this picture explains only part of reality. Because while we continue comparing hotels with hotels, the guest is comparing experiences with experiences.
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