Every revenue management decision your hotel makes exists in the context of your competitive landscape. You are not pricing in a vacuum. Travelers compare your rate, your reviews, your amenities, and your location against a handful of alternatives before they book. The hotels in that consideration set are your competitive set, and understanding their behavior is essential to pricing effectively and capturing your fair share of demand.
A well-constructed comp set analysis gives you the intelligence to price with confidence, identify market share opportunities, and anticipate competitive moves before they impact your bottom line. This guide covers how to build your comp set, where to find reliable data, which metrics to track, and how to translate comp set insights into revenue strategy.
Selecting your competitive set properties
The most common mistake in comp set selection is choosing aspirational competitors rather than actual ones. Your comp set should reflect the hotels that travelers genuinely consider as alternatives to your property, not the hotels you wish you were competing with.
Start with these selection criteria:
Geographic proximity. In urban markets, your primary competitors are typically within a one- to two-mile radius. In resort or destination markets, the radius may expand, but the principle is the same: guests evaluating your hotel are also looking at properties in the same general area.
Rate positioning. A hotel with an ADR of $150 is not meaningfully competing with a luxury property running at $450. Your comp set should include properties within roughly 20 to 30 percent of your average daily rate, either above or below.
Service level and star rating. A select-service hotel competes primarily with other select-service properties, not with full-service convention hotels. Match your service tier when building your set.
Target market overlap. Consider who your guests actually are. If you draw primarily corporate transient travelers, your comp set should include the hotels those same travelers are considering. If you do heavy group and event business, include properties with comparable meeting space.
Chain scale and brand perception. Brand affiliation matters because travelers use it as a proxy for quality and consistency. A Courtyard by Marriott typically competes with Hilton Garden Inn, Hyatt Place, and similar brands within the upper midscale or upscale segment.
Most industry benchmarking tools, such as STR (now part of CoStar), use a comp set of four to seven properties. This is a good target range. Fewer than four does not give you enough data points to identify patterns, while more than seven dilutes the analysis and makes it harder to interpret.
Data sources for comp set analysis
Reliable data is the foundation of useful competitive analysis. Here are the primary sources:
STR reports. STR (Smith Travel Research) is the industry standard for competitive benchmarking. Through their STAR report, you receive monthly data on your comp set's occupancy, ADR, and RevPAR, indexed against your own performance. The key metrics are your occupancy index, ADR index, and RevPAR index, each of which tells you whether you are capturing more or less than your fair share of the market. An index above 100 means you are outperforming your comp set; below 100 means you are underperforming.
Rate shopping tools. Platforms like OTA Insight, Lighthouse (formerly OTA Insight), and Rate360 by SHR provide real-time rate data from your competitors across OTAs, brand sites, and meta-search. Unlike STR data, which is backward-looking and monthly, rate shopping data is forward-looking and available daily. This makes it essential for tactical pricing decisions.
OTA and meta-search observation. Regularly search for your market on Booking.com, Expedia, Google Hotels, and Trivago. Observe not just rates but also positioning: how your property appears in search results relative to competitors, what promotions they are running, and how their review scores compare to yours.
Mystery shopping. Periodically call or email your competitors to inquire about group rates, wedding packages, or corporate pricing. This gives you direct intelligence on their sales approach, pricing flexibility, and how they position their value proposition, information that no automated tool can capture.
Public financial data. For branded competitors that are part of publicly traded companies, earnings calls and investor presentations often contain market-level data on RevPAR growth, occupancy trends, and strategic priorities. This is especially useful for understanding the broader direction of a brand's pricing strategy.
Metrics to track
Effective comp set analysis goes beyond glancing at a competitor's rack rate. Track these metrics consistently:
- Occupancy index -- Are you filling more or fewer rooms than your comp set on a percentage basis? An occupancy index below 100 may indicate a positioning, marketing, or distribution problem.
- ADR index -- Are you commanding a higher or lower rate than competitors? An ADR index above 100 with an occupancy index below 100 often means you are priced too high for your perceived value.
- RevPAR index -- This combines occupancy and rate into a single measure of revenue performance. It is the most important single metric for understanding your competitive position.
- Market penetration index (MPI) -- Another name for occupancy index, but worth calling out because it directly measures your share of demand.
- Rate positioning by day of week -- Your competitive position may differ significantly between weekdays and weekends. Track rate gaps by day of week to identify opportunities.
- Lead time and booking pace -- How far in advance are your competitors selling, and at what rate levels? If a competitor starts discounting 30 days out, it may signal softening demand.
- Review scores -- A competitor's review score on Google, TripAdvisor, or Booking.com directly affects their ability to command rate. A competitor with a 4.5-star rating can often sustain rates 10 to 15 percent higher than one with a 3.8-star rating.
Rate shopping in practice
Rate shopping should be a daily habit embedded in your revenue management workflow. Here is how to make it actionable:
Set up automated alerts. Configure your rate shopping tool to notify you when a competitor drops or raises rates by more than a defined threshold, such as 10 percent, for any date within your booking window. This allows you to react quickly rather than discovering rate changes after the fact.
Focus on high-impact dates. You do not need to analyze every date equally. Prioritize rate shopping for your top revenue dates: major city-wide events, holiday weekends, peak season periods, and any dates where you have significant group blocks.
Compare apples to apples. When comparing rates, make sure you are looking at comparable room types and inclusion levels. A competitor's rate that includes breakfast and parking is not directly comparable to your room-only rate. Normalize your comparisons to account for these differences.
Track rate change frequency. Some competitors change rates daily based on dynamic pricing algorithms. Others set rates monthly and rarely adjust. Understanding each competitor's pricing behavior helps you predict their future moves and avoid overreacting to noise.
Adjusting strategy based on comp set moves
The purpose of comp set analysis is not just observation; it is action. Here is how to translate competitive intelligence into revenue strategy:
When competitors drop rates. Do not automatically follow. First, assess why they are discounting. If it is a market-wide demand issue, you may need to adjust. If it is a property-specific problem, such as renovation disruption or a review score decline, you may be able to hold your rate and capture their displaced demand.
When competitors raise rates. This is an opportunity to evaluate whether you can also increase. If the market is absorbing the higher rates without a drop in occupancy, you likely have room to move up as well. Use your revenue management tools to test incremental rate increases and measure the impact on booking pace.
When a new competitor enters the market. A new hotel opening in your comp set will typically compress occupancy and rate for the first 12 to 18 months as it ramps up. Expect aggressive introductory pricing and heavy promotional spend. Focus on retaining your loyal guests, strengthening your direct booking value proposition, and emphasizing your track record and reviews.
When your index scores decline. If your RevPAR index drops below 100 and stays there for more than two consecutive months, it is time for a thorough review. Look at your rate positioning, your distribution mix, your review scores, and your marketing spend relative to competitors. The problem is rarely just one thing.
Centralizing your competitive data alongside your sales pipeline and revenue metrics makes it far easier to connect competitive moves to commercial outcomes. Platforms like HotelAmplify help you see the full picture in one place.
Key takeaways
- Select comp set properties based on who your guests actually compare you to, not who you aspire to compete with
- Use STR data for backward-looking performance benchmarking and rate shopping tools for forward-looking tactical pricing
- Track occupancy index, ADR index, and RevPAR index monthly to understand whether you are gaining or losing market share
- Do not automatically match competitor rate drops; first assess the reason behind the change
- Supplement automated data with periodic mystery shopping and OTA observation for qualitative insights
Next steps
Ready to integrate competitive intelligence into your sales and revenue workflow? Explore HotelAmplify's sales tools for centralized performance tracking. Or schedule a demo to see how the platform can support your revenue strategy.