Picture a mid-sized hotel that’s doing almost everything right — good reviews, steady occupancy, and strong service standards. Yet, month after month, the team struggles to understand why competing properties seem to achieve higher ADR or generate more revenue from similar room types.
This happens when a hotel doesn’t have a clear picture of its hotel compset — the group of properties it truly competes with. Without this clarity, it becomes hard to set prices, benchmark performance, or plan a strong hotel revenue strategy Hotels using modern cloud PMS tools like Hotelogix gain better visibility through real-time data, enabling faster, easier decision-making.
In this guide, we’ll break down what a hotel compset is, why it matters, how to identify yours, and the tools that make hotel competitor analysis easier and more accurate.
Key Takeaways
Build a clearer compset: Structured steps help hotels identify real competitors based on data, not assumptions.
Improve pricing accuracy: Comparing ADR and RevPAR with the right hotels supports smarter, more confident rate decisions.
Save analysis time: Using OTA insights, reviews, and PMS data cuts hours of manual competitor research.
Boost forecasting clarity: Real-time demand patterns make it easier to predict surges, dips, and seasonal trends.
Smarter Benchmark performance: A well-defined hotel compset keeps your revenue strategy aligned with changing market conditions.
What Is a Hotel Compset?
A hotel compset is the group of similar hotels your property directly competes with. It’s based on location, category, amenities, pricing, and target guests. Hotels use compsets to compare occupancy rate, ADR comparison, RevPAR comparison, and overall performance.
A strong hotel competitive set helps you understand how your property is performing in the real market. Since revenue decisions depend on accurate benchmarking, selecting hotels that closely match your offering is key.
Most compsets are formed using:
- STR performance data
- OTA visibility and market mapping
- Review and rating patterns from booking channels
- Category and price band comparisons
Why Does the Right Compset Matter?
A hotel compset isn’t just a list you create once and forget. It’s the backbone of every strong hotel revenue strategy. Choosing the right competitors helps your team understand where you stand, why you’re performing a certain way, and what needs to change.
1. Benchmarking Your True Performance
A compset gives you a realistic benchmark for occupancy, ADR, and RevPAR comparison. Without it, you’re comparing your performance to the entire market — which is misleading.
2. Building a Strong Pricing Strategy
Competitive awareness affects your pricing strategy and hotel choices. If a similar hotel consistently sells higher at the same occupancy, it’s a signal that you may need to reposition or adjust rate strategy. A relevant compset ensures your pricing is neither too aggressive nor undervalued.
3. Understanding Your Market Position
A compset helps answer key questions:
- Are you a market leader or follower?
- Are your rates aligned with guest expectations?
- Do your offerings match the value of similar hotels?
This is essential for hotel competitor benchmarking and hotel competitor mapping, especially when new hotels enter the area or when existing properties renovate or rebrand.
4. Making Informed Operational and Marketing Decisions
Your compset data can reveal if you need to:
- Improve amenities
- Change your target segment
- Enhance guest experience
- Adjust packages for weekday vs weekend demand
- Strengthen direct booking strategy
5. Forecasting Demand With More Confidence
A compset helps identify:
- Peak demand seasons
- Local event impact
- Booking window behavior
- Shifts in demand across segments
This makes revenue forecasting more accurate — especially when paired with STR-style market trends and OTA performance data.
A well-defined hotel competitive set helps you price smarter, benchmark more accurately, and understand how your property fits into the market. When your compset is built correctly, every strategic decision, from pricing to marketing, becomes clearer and more data-driven.
How Hotels Identify Their Competitive Set
Finding the right hotel compset isn’t about guessing who your competitors are. It’s a structured process that combines market data, guest behavior insights, and a clear understanding of what your property offers. When done well, it gives you a reliable foundation for hotel competitor analysis and stronger revenue decisions.
Here’s a simple, step-by-step way to help you identify your compset:
1. Map Nearby Hotels Within a Practical Radius
In urban markets, hotels usually evaluate properties within 1–3 km. In resort or spread-out leisure destinations, teams may look within 5–7 km. The idea is to compare hotels that guests genuinely consider as alternatives — not just those that happen to be close by.
2. Match Star Category or Property Type
A 3-star city hotel should compare itself with other 3-star business hotels, not a luxury resort. Matching category and type ensures your compset reflects hotels with similar brand positioning.
3. Compare ADR and Price Bands
Your average rate should align with your competitors’. For example, if your ADR is ₹4,000–₹6,000 (or a similar range in your region), you should compare yourself with properties in the same band. This keeps your hotel’s pricing strategy aligned with what your guests are willing to pay.
4. Understand Guest Segments and Behavior
Two hotels may look alike but attract completely different guests. Segment alignment matters, as business travelers, families, wellness guests, or group bookings behave differently.
5. Review Key Amenities and Experiences
Guests compare hotels based on what they value most:
- Pool, bar or spa
- Banquet or meeting rooms
- On-site dining
- Room categories
- Experience-led offerings
Matching amenities ensures your compset mirrors the value you deliver.
6. Study OTA Rankings, Visibility & Reviews
OTAs reveal what guests see first. A property with similar ranking, rating, and visibility is often a closer competitor than one that simply matches your category. Review sentiment also indicates whether or not guests consider you comparable.
7. Validate With Booking Patterns & Demand Insights
This is the step many hotels skip. Demand patterns, booking window data, and channel performance help confirm whether the hotels you’ve identified consistently attract the same type of demand.
When these steps come together, you get a compset that reflects your true competition — enabling better benchmarking, smarter pricing, and operational clarity.
Key Criteria for Selecting the Right Compset
Choosing the right hotel compset isn’t just about finding nearby hotels. It is about choosing properties that match your value, segment, and your guests’ expectations. A strong compset supports better hotel competitor benchmarking, fair comparisons, and smarter decision making.
Below is a simple comparison table to help revenue teams and hotel operators evaluate compset relevance:
Comparison Table: Criteria for a Strong Hotel Compset
A compset aligned with these criteria makes your hotel competitor analysis more reliable and ensures your team is tracking performance against hotels that your guests actually consider.
Tools & Data Sources for Hotel Competitor Analysis
A strong hotel compset isn’t built on guesswork. It comes from understanding real market data, pricing trends, guest sentiment, and performance signals. Today, most hotels rely on a mix of industry benchmarking tools, OTA insights, and PMS analytics to validate whether a competitor truly belongs in their set.
Here are the main tools and data sources used during compset analysis:
1. Industry Data Tools (STR & Benchmarking Reports)
Industry benchmarking tools help hotels compare performance metrics like occupancy, ADR, and RevPAR against their market. These reports reveal how your hotel performs relative to a fair competitive group.
These tools help hotels:
- Track market-wide pricing changes
- Understand demand fluctuations
- Benchmark performance accurately
- Validate the relevance of a chosen hotel’s competitive set
2. Rate & OTA Intelligence Tools
Hotels use OTA rate analysis and visibility tools to understand:
- Competitor pricing in real time
- Ranking and visibility on OTAs
- Guest reviews and sentiment patterns
- Seasonal pricing shifts
- Demand compression during events or high-traffic days
3. Review, Sentiment, and Reputation Insights
Guest ratings and reviews offer another layer of truth.
Hotels with similar sentiment, rating scores, and guest themes often attract the same traveler profile — making them strong compset candidates. Tools in this category help uncover:
- Sentiment trends
- Value perception
- Experience gaps
- OTA review patterns
4. PMS & Channel Manager Insights
Your PMS and channel manager hold some of the most reliable, real-time insights about demand, performance, and pricing behavior. Hotels using cloud PMS platforms like Hotelogix can quickly spot alignment or gaps between their hotel and potential competitors.
These insights include:
- Real-time pricing comparison
- Occupancy trends
- Booking window behavior
- Pickup and pace reports
- Demand patterns across channels
Why PMS data matters: It confirms whether competitors attract the same booking behavior, price sensitivity, and demand flows — all crucial for building a reliable hotel competitor mapping strategy.
Common Pitfalls in Hotel Competitor Analysis
Many hotels build their hotel compset based on surface-level similarities. But without digging deeper into pricing, guest behavior, and performance trends, the compset becomes unreliable — which leads to poor hotel revenue strategy decisions.
Here are the most common mistakes hotels make during hotel competitor analysis:
1. Comparing With Hotels Outside Your Price Band
Hotels sometimes track properties that are far above or below their ADR range. This negatively affects rate decisions and creates unrealistic growth expectations.
2. Choosing Competitors Only Based on Distance
Proximity helps, but it can be misleading. Two hotels next to each other may serve completely different segments. Value match and segmentation are more important than just distance.
3. Relying on Outdated or Incomplete Performance Data
Renovations, repositioning, or new openings can quickly change the competitive landscape. Using old STR-style data or unrefreshed OTA insights leads to incorrect comparisons.
4. Ignoring Guest Ratings and Perceived Value
Two hotels might share similar ADRs, but one may have a much stronger reputation. Guest reviews influence demand, willingness to pay, and booking decisions — making them essential for compset relevance.
5. Using Too Many or Too Few Competitors
A compset with only 2–3 hotels isn’t enough for reliable benchmarking. But a list of 12–15 hotels dilutes insights and adds noise. Most revenue managers prefer a balanced compset of 5–10 truly comparable properties.
Limitations of Traditional Compsets vs Leveraging Modern Compsets
Why Hotelogix Helps Hotels Build Smarter, More Accurate Compsets
Building a strong and reliable hotel compset depends on having real-time insights into your demand, pricing, channels, and booking patterns. That’s where a cloud PMS like Hotelogix naturally supports better decision-making without adding complexity or extra tools.
Hotelogix makes it easier for revenue teams to:
- Track real-time occupancy trends and compare them with market behavior
- Use channel manager data to understand rate movement across OTAs
- Study booking window behavior to see how guests respond to price changes
- Analyse demand patterns that signal shifts in guest interest or market conditions
These insights help you validate whether a competitor truly belongs in your hotel’s competitive set, adjust the compset as markets evolve, and strengthen your hotel’s revenue strategy with confidence. It’s a simple way to benchmark performance more accurately and stay aligned with what guests actually want.
FAQs
Q1-How do hotels choose their compset?
A-Hotels build their hotel compset by selecting properties with similar location, category, ADR band, amenities, and target guest profiles. Tools like OTA insights and market benchmarking reports help confirm whether guests view those hotels as real alternatives.
Q2-How many hotels should be in a compset?
A-A reliable hotel competitive set usually includes 5–10 hotels. Fewer competitors make benchmarking inaccurate, while too many create noise and make comparisons complicated. A balanced set gives revenue teams clearer insights into pricing, occupancy, and RevPAR trends.
Q3-What’s the difference between a compset and a benchmarking group?
A-A compset is a hotel’s direct competitive group. These are properties guests are most likely to compare or choose between. A benchmarking group is broader and may include hotels outside your segment or price range to help track overall market trends. Both support hotel competitor analysis, but compsets offer more precise insights.
Q4-How often should a compset be updated?
A-Most hotels update their compset at least once a year, but faster-growing markets may require quarterly reviews. Renovations, repositioning, rate changes, or new openings can all affect competitor relevance.
Q5-What tools help analyze a compset effectively?
A-Hotels use a mix of tools, including STR-style benchmarking, OTA rate intelligence, and sentiment analysis. PMS platforms like Hotelogix add value by providing real-time occupancy, demand patterns, and channel insights.
Q6-Can a hotel have more than one compset?
A-Yes. Many hotels build a primary compset for daily benchmarking and a secondary compset for events, peak seasons, or niche segments. For example, a hotel may compare itself to business hotels during weekdays and to leisure properties on weekends. This layered approach strengthens hotel competitor mapping and pricing accuracy.
Conclusion
A well-defined hotel compset gives every hotel a clearer view of its true competition. It helps you benchmark performance fairly, price rooms with confidence, and understand how your property fits into the wider market. When your compset reflects accurate data, not assumptions, your hotel revenue strategy becomes stronger, smarter, and easier to act on.
If you want clearer visibility into performance trends, demand patterns, and rate behavior, a cloud PMS like Hotelogix can help you benchmark more accurately and make better competitive decisions every day.
Ready to build a smarter compset? Book a free demo with Hotelogix and see how real-time insights can transform your revenue strategy.