Every hotelier watches the neighbours' prices. The problem is who the "neighbours" are. People often compare their three-star with the cheapest hotel in the area, or the four-star across the street, or the B&B that costs half as much. And they make the wrong pricing decisions.

To use competitor prices well you need a comp set: a group of 4–6 truly comparable hotels to monitor regularly. Here's how to choose it and use it.

What makes a hotel "comparable"

A true competitor is a hotel your typical guest would consider instead of yours. Criteria:

  • similar location: same area or with equivalent advantages (beach, centre, trade fair);
  • similar category and type: three-star with similar amenities;
  • similar target guests: families, couples, business;
  • size not too different;
  • review score in a close range;
  • comparable key amenities (parking, pool, breakfast, restaurant).

Not every criterion needs to match: what matters is that guests see them as real alternatives.

How to find them

  • search your hotel on Booking.com and look at suggested "similar" properties and those appearing in the same searches;
  • search Google for "hotel [area] [type]" and look at the map;
  • ask guests: "Which other hotels were you considering?";
  • read reviews: guests sometimes mention comparisons.

How many competitors

Four to six is a good number. Fewer than 4 makes the comparison fragile; more than 8 becomes noise. You can have a main comp set and a secondary one (e.g. one for summer and one for events).

What to monitor

  • prices for the same dates and room type (standard double, same length of stay, same conditions);
  • availability: if a competitor is sold out, demand is high;
  • restrictions: minimum stays, non-refundable rates;
  • review score and count;
  • active promotions.

Be careful to compare like with like: breakfast included or not, free cancellation or not, taxes included or not.

How to use the data (without copying)

Competitor prices don't tell you what to charge. They tell you where you stand. Examples:

  • if you're always the most expensive but full, your value is recognised: good;
  • if you're the most expensive and empty, perhaps your price isn't justified by perceived value;
  • if you're the cheapest and full well in advance, you're leaving money on the table;
  • if competitors are sold out and you have rooms, you can raise prices.

See how to set room prices at a three-star hotel.

Tools

  • manual checks on OTAs: free, but time-consuming;
  • rate shoppers: tools that automatically collect comp set prices (often included in revenue management or channel manager software);
  • OTA reports: some extranets show comparisons with similar properties.

Common mistakes

  • including non-comparable hotels because "they're nearby";
  • comparing rates with different conditions;
  • reacting to every competitor move;
  • leaving review scores out of the comparison;
  • copying the lowest price in the comp set.

Frequently asked questions

Should I include B&Bs and apartments in my comp set?

Only if your guests really consider them alternatives. For a hotel with services, the main comparison is often still other hotels. See how to compete with B&Bs and holiday apartments by showcasing your hotel's services.

How often should I check competitor prices?

Weekly for periods on sale, more often in high-demand periods or around events.

What if a competitor cuts prices sharply?

Check your own demand first: if bookings are going well, there's no need to follow. See does lowering prices really increase bookings?.

Want a comp set built around your guests?

With our free marketing audit we identify your hotel's real competitors and compare prices, reviews and positioning, to see where you can charge more.