Why Focusing on Competitors Can Hurt Your Hotel

In the world of hospitality, competition is fierce. With so many hotels offering similar services, it is easy to feel the pressure of constantly comparing yourself with others. However, focusing too much on the competition can be detrimental to a hotel’s overall strategy. Below, I outline several reasons why it is important to avoid this practice and focus on our own hotel.

What works for one hotel does not necessarily work for another

Every hotel is unique in terms of its location, facilities, services, staff and, most importantly, its target audience. What works for a hotel in one location and with a particular target audience may not be effective for another in a different location and with a different target audience. It is important to recognise these differences and adapt strategies accordingly, rather than simply imitating what competitors do or what has worked for other hotels in the past.

Service is delivered by people, who cannot be replicated

Although there are certain standards that every hotel must meet in terms of service quality, we must not forget that service is delivered by people. Every property has a unique and distinctive team, with varying levels of empathy, motivation and leadership. This is why good hotel management must focus on developing and leading its team, with the aim of strengthening its skills and capabilities. A hotel that succeeds in building a cohesive, motivated team capable of delivering exceptional service has an important competitive advantage. Conversely, an unmotivated or poorly led team can negatively affect the guest experience and, consequently, the success of the business. For this reason, it is important for every hotel to focus on the uniqueness of its team and its development. Each person has unique skills and capabilities that can be developed and used to improve the quality of the service delivered. In addition, every property has its own culture and values that must be conveyed by its team to ensure an authentic and memorable guest experience. Service is delivered by people, and they are unique to each property. Good management must focus on team development, leadership and motivation in order to ensure exceptional, authentic service for the guest.

Competitors have their own objectives, which have nothing to do with yours

Every hotel has its own mission and vision, which means its objectives and priorities may differ from those of its competitors. Therefore, focusing on what other hotels are doing is not always helpful. Instead, it is better to focus on what makes your own hotel unique and work to stand out in that respect. When we talk about objectives, we are referring not only to the goals we want to achieve, but also to the way in which we want to achieve them. Every hotel has its own priorities and strategies, and competitors may have objectives that differ from yours. For example, a hotel in the same area may focus on attracting a different type of guest, or its pricing strategy may be very different. If you focus too much on competitors, you may lose sight of what matters to your own business and make poor decisions based on incorrect assumptions. It is important to know and analyse the competition, but always with your own objectives and strategies in mind.

Competitors’ finances and cash flow differ from your own

Every hotel has different resources and financial circumstances, which means competitors may have more or fewer resources to invest in their marketing or advertising strategy. If you try to match or outperform competitors’ marketing efforts without considering your own finances, you may be spending more than you can afford, which could jeopardise the hotel’s financial stability. It is important to remember that every hotel has its own financial and cash-flow position, and that this can vary greatly even within the same market. Even if two hotels compete directly in terms of location and category, they may have significant differences in their cost structure, revenue and cash flow. Therefore, making assumptions about competitors’ financial circumstances can lead to miscalculations and poor decisions.

The downward spiral of pricing and service

Furthermore, competitors’ pricing and promotional strategies may be completely different from those of your own hotel. If pricing decisions are based solely on what competitors do, there is a risk of entering a race to the bottom, competing with ever-lower prices and sacrificing profit margins. Instead, a pricing strategy should be defined that is consistent with the hotel’s value proposition and market positioning. Focusing too much on the competition can trigger a domino effect that leads to lower prices and reduced service quality. There will always be someone willing to lower prices or offer additional services to attract guests, but this approach may be unsustainable in the long term and can reduce the profitability of the business. Instead, it is better to focus on the creation of a unique, differentiated product and service, in order to stand out in the market and attract guests looking for something special.

Focusing on the competition can be a distraction

When hotel managers and owners are overly concerned about what competitors are doing, they may neglect the internal management of their own hotel. Managing a hotel involves far more than simply competing with others. Factors such as guest satisfaction, human resources management and the implementation of an effective marketing and advertising strategy must be taken into account. Focusing too much on the competition can be a distraction because it can lead you to lose sight of the objectives and needs of your own hotel. It is easy to fall into the trap of thinking that what works for competitors will work for your hotel, but this is not always the case. Every hotel has its own identity and personality, and it is important to focus on your hotel’s own strengths and weaknesses rather than trying to imitate competitors. In addition, focusing on the competition can mean that you lose perspective and make hasty or poorly informed decisions. Rather than making decisions based on what competitors are doing, it is important to conduct market research and industry analysis to understand guest trends and needs. This makes it possible to make informed, strategic decisions that are right for your own hotel, rather than simply following what competitors do.

Focusing on yourself allows you to prioritise differentiation and innovation

Rather than constantly comparing themselves with others, hotels can focus on what makes them unique and work to differentiate themselves from the competition. Innovation can be a powerful tool to help hotels differentiate themselves and stay ahead of the market. By focusing on innovation, hotels can find new ways to improve the guest experience and exceed expectations. When we focus on our own business, we can concentrate on what makes us unique and different from our competitors. We can find ways to innovate and offer something no one else does, rather than simply following in our competitors’ footsteps and trying to match them. Instead of spending time and resources trying to outperform competitors in areas where they are already strong, we can work on improving our own weaknesses and focusing on what we do best. By doing so, we can create a competitive advantage that allows us to stand out in the market and attract a loyal and satisfied guest base. In addition, by focusing on ourselves, we can create a culture of innovation and continuous improvement within our team, allowing us to adapt and remain relevant in an ever-changing market. While considering what competitors are doing can be useful for hotel strategy, it should not be the only or primary way of defining a hotel’s strategy. It is important to focus on what makes your own hotel unique, work to improve guest satisfaction and internal management, and find new ways to differentiate and innovate. By doing so, hotels can succeed and thrive in a competitive market. Avoiding a focus on the competition and focusing on yourself can be the key to developing a successful and sustainable hotel strategy. In my experience, I have helped many hoteliers identify their strengths and differentiate themselves in an increasingly competitive market. If you need help developing your hotel strategy and standing out in the market in a strong and differentiated way, please do not hesitate to contact me.