What Is Hotel Comp Set ?

What is Comp set? Why does a hotel need it?

Alright, just if, you never heard it, or, you do not quite understand what it is, or you are here just to make sure that my explanations are correct, then please get yourself a cup of coffee, get back to your chair again, and let's see what I'm goin' to write.

"Comp Set" stands for Competitive Set, or for some people, it is Competitor Set. From its name, I believe you already get a picture of what it is. Yes, it is a report that contains a set of competitors (plus our property of course) along with some information on it, such as

• What was their occupancy rate?
• How much was their average room rate?
• How much was their total room revenue?
• How did we perform against them?

Hey, why do you keep writing in the past tense form? Yes, because it IS already past. The report is for yesterday's performance, the "month-to-date" performance, and for some hotels, the "year-to-date" performance. Essentially, it is a hotel benchmarking, and the simplest way to be said, it is a comparison report.

There are two major aspects when choosing a competitor set:

• What characteristics make a group of properties similar?
• What characteristics make a group of properties direct competitors?

Speaking about similarity, it means how do we identify shared attributes, such as:

• Hotel type and class 
• Number of rooms
• Meeting Rooms space
• Number and type of F&B offering
• Geographic proximity
• Sister Hotel (this is a term that refers to a hotel with the same management, in this case, which is located in the same geographic proximity)

Yes, I wish it is that simple to choose the competitors. As a matter of fact, because of the subjective components, competition is a more challenging concept than similarity. For example, as I live and work in Indonesia, for example, a beach resort will compete directly with similar properties during the summer season, but during the rainy season, it may compete over weddings or corporate events with other destination hotels. In this case, instead of competing with other resorts, they will competing city hotels during that particular season. For that reason, many hotels will have 2 sets of competitors. They call it the Prime Competitor, and Indirect Competitor.

The next question is, how hotels can have such confidential information from their competitor? Well, it is not that "confidential". Most of the hotels will share these pieces of information willingly, so they also can gather information from other hotels. In simple words, I'll tell you mine if you tell me yours.

Nowadays, even though there is a web-based platform for hotels to share information (the most well-known is str.com), most hotels still do it "semi-manual". The night FDA (Front Desk Attentand) shares the info through a group chat application, such as WA or Telegram group. This is way more modern comparing how I did it more than a decade ago. When I was still a receptionist, we have to call each of our hotel competitors. Usually every 5AM, the night receptionist started to call each other. And some of them were still sleeping when the phone was ringing, hahaha.

Now, let us see how the report looks like.

Many columns to be filled, huh? The surprising thing is (just if you didn't know it yet), from those columns, as shown above, the information that is shared, is only the "Room Sold" and the "ADR/ARR". The rest? We calculate ourselves. For the "Room Available" column, of course, we have to have that information from the first time we choose them as our competitor, right? Because one of the aspects to choose our competitor is to know how many rooms do they have. Back to the information that we already collected, Room Sold and ADR, we can calculate the total room revenue, RevPar, actual market share, and the indexes ( MPI, ARI, RGI ). I will share what are those and how to calculate it all in my next article, otherwise, it'll be a very long article for you to finish here :D

Now you might be asking, are the data that we have accurate? Nope ! There is no guarantee about it. The receptionist might share false information, or maybe they have instructions to increase or decrease the numbers. We never know, there is no legal contract for it. But at least, we get the picture. Because the margin of the difference between their info and their actual performance is about 10%, Top! I am not talking about ARR (which rarely they would change), I'm talking about the room sold. Let's say, your competitor said that they had 100 rooms sold, so the actual room sold is between 100-110 rooms. Trust me, most of the time they increased the room sold, it is about the dignity of a night reception, they want to show the world that their hotel is performing. 

Alright then, thank you for still being with me now. And as a hotelier said, I will be more than happy to hear your feedback, comment, or even any critics. 

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Lobby Lizard
It is okay to move slow, but make sure you move forward