Hotel benchmarking can seem daunting at first. How do you choose your compset, what metrics should you compare, and how do you interpret the results?
In today’s fast-paced world, many decisions are reactive. However, advanced data analytics and technology now allow for detailed assessments without sacrificing time. In hospitality, having accurate data and knowing how to use it is crucial for a successful revenue strategy.
What is direct channel benchmarking?
Benchmarking helps you monitor your hotel’s performance and understand how you stack up against the market. It highlights your strengths and areas needing improvement, giving you a clear view of your competitive positioning.
Direct channel benchmarking is a critical strategy for hotels aiming to maximize their revenue and enhance their competitive edge. By evaluating the performance of your hotel’s direct booking channels (such as your website or mobile app) against industry standards or key competitors, you can identify strengths, weaknesses, and opportunities for improvement.
Whether your hotel brand encompasses five-star luxury properties or serviced apartments, having precise and dependable data—and knowing how to leverage it effectively—is essential for crafting a successful hotel revenue strategy. Benchmarking tools offer some of the most valuable insights available.
How to conduct direct channel benchmarking
Direct channel benchmarking is not a one-size-fits-all process. It involves several steps and a deep dive into various metrics. Here’s how you can effectively benchmark your hotel’s direct channels.
1. Know who you’re up against
Understanding your competition is crucial to outperforming them. Hoteliers often limit themselves by only comparing to direct competitors—similar hotels in the same area or brand. However, it’s beneficial to broaden this view and consider dynamic compsets.
Learning from hotels worldwide, especially those with similar profiles and booking patterns, can provide richer insights and a learning mindset beyond just competition.
2. Identify relevant metrics
Access to hotel metrics is valuable, but knowing which ones to focus on is essential. Analyze and compare metrics that align with your hotel’s strategy and monitor their evolution over time. Beyond traditional metrics like occupancy and ADR, consider performance indicators such as price disparity frequency. Particularly, direct channel performance metrics, like total website and booking engine conversion rates, offer a comprehensive view of your direct channel’s performance.
3. Deep dive into your data
Interactive benchmarking platforms allow for real-time, detailed data analysis. Drill down by search date, travel party, or traffic source to gain a deeper understanding of your hotel’s strengths and weaknesses. For instance, filtering average booking value by travel group, such as couples, can reveal spending patterns and help refine marketing strategies based on these insights.
4. Compare against past periods
Benchmarking involves comparing results over different periods to understand them in context. This helps identify effective changes and improve forecasting. While historical data may sometimes be less relevant, it’s important to also evaluate recent performance, such as this week versus last week, for a more accurate comparative analysis.
The role of technology
Technology significantly enhances direct channel benchmarking by offering real-time data and sophisticated analysis tools. Dynamic compsets, powered by machine learning, help identify true competitors and enable precise performance comparisons with similar hotels worldwide. This approach ensures comprehensive and relevant insights, leading to more effective strategies.
Automation opportunities further streamline the process, providing recommendations based on your hotel’s direct channel performance relative to competitors. This allows for quicker actions, saving time, and identifying quick-win opportunities.
Advanced benchmarking platforms also highlight underperforming metrics, guiding your efforts by device, travel party, market, and more. Access to data from millions of users across a network of hotels provide unparalleled data quality and actionable insights to refine direct booking strategies.
Moving from benchmarking to action
Once you have identified the metrics where your performance differs significantly from your compsets, it’s time to take action. Don’t just focus on the areas where you’re underperforming; also identify where you’re outperforming others. These strengths can be exploited for growth opportunities and new revenue ideas.
Benchmarking is an ongoing cycle. After implementing changes based on insights, continuously monitor the results to refine strategies. By analyzing various metrics, interpreting the data, and applying best practices, you can enhance direct bookings and achieve sustainable success. Hotel benchmarking provides the necessary insights for informed decision-making and continuous improvement.
By delving into different metrics, drilling down on the data, and applying best practices, hotel benchmarking can help you grow your direct bookings. It provides a structured path to understanding your performance and making informed decisions that lead to sustainable success.
Embracing direct channel benchmarking can transform your hotel’s revenue strategy. By understanding and acting on key performance metrics, leveraging advanced technology, and maintaining a continuous improvement mindset, you can optimize your direct bookings and stay ahead of the competition. Start benchmarking today and unlock the full potential of your hotel’s direct booking channels.
A post by The Hotels Network
The Hotels Network (THN) is an innovative technology company working with over 20,000 hotels around the globe. Boasting an international team of specialists with deep expertise in hospitality, product design, and consumer marketing, the company offers clients a full-stack growth platform to power their direct channel.
In addition to price comparison, reviews summary, and a full suite of personalization options, THN’s Predictive Personalization product harnesses machine learning techniques to predict user behavior and then automatically personalizes both the message and the offer for each user. The company’s benchmarking product, BenchDirect, is the first of its kind for the direct channel, providing hotels with never-before-seen competitive data.
THN is proud to have been recognized for the company’s product innovations, rapid growth, and unique workplace culture for the second year in a row, most recently named the Best Direct Booking Tool for 2024 in the prestigious HotelTechAwards.
