Who are my “true” competitors? This million-dollar question is often a hot topic in boardrooms. It’s essential information at revenue strategy meetings and crucial when developing property level sales and marketing plans. Most hotelds use price and location to determine their competitive set. Competitive benchmarking data, such as that provided by Smith Travel Research (STR) through its STAR reports, is already the mainstay for evaluating key performance indicators such as occupancy, ADR and revenue per available room. Using the same data to identify competitors in the same chain scale segment (e.g. Luxury, Upper Upscale, Upscale, Upper Midscale, Midscale or Economy) is common practice. But the calculus guests use to identify options for their next stay is more complicated than just price and location. The missing 27.4% Although managers often use STR’s chain scale segments as a guide to select their competitive set, these groupings are simply based on price. Obviously guests are not aware of these groupings and choose properties for many different reasons. To test how well STR’s chain scale segments represent a brand’s true competitive set, we evaluated longitudinal data from the Market Metrix Hospitality Index (MMHI). Pricing segments are a good way to pick competitors, and accurately predict the set of hotels a guest will choose from 72.6% of the time. But that means you can never do better than a C-. More than one out of every four hotel selections, or 27.4% of the time, guests are indicating they will choose a hotel not included in the price segment of the brand they chose last time. Market Metrix decided to dig a little deeper to find out what causes guests to switch hotels and segments – and how hotels can determine their actual competitor set. Get the full story at Market Metrix (free registration)