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Hotel Competitors: The Ultimate Guide to Building Your Perfect Competitive Set In 2025 – Image Credit Lighthouse
The phrase “knowledge is power” could not be more relevant within an environment as competitive as the hotel industry. Identifying your accommodation’s main competitors is critical to your success.
Monitoring your competitive set (a.k.a. hotel compset) allows you to benchmark your hotel’s performance against your competitors, spot opportunities to improve your pricing strategy, and tailor marketing efforts to ensure that you offer the best product possible.
By setting the right prices, perfecting your services and leveraging the best distribution channels relative to your direct competitors, you can capture more bookings, resulting in higher occupancy and revenue.
To be able to outsmart your competitors, you first need to compile your hotel compset using the right criteria. This blog serves as your hands-on guide to quickly find your direct hotel competitors step by step, so you can leverage the right information to advance your business.
What are hotel competitors and why do they matter?
Running a small, independent hotel comes with its own set of challenges. One of the biggest is keeping up with the fierce competition. In a strongly competitive hospitality industry, independent hoteliers need to base strategic decisions on accurate data in order to attract more guests and stay profitable.
The first step of a hotel competitive analysis is identifying who your main competitors are: your hotel’s competitive set. These are the hotels that potential guests are most likely to compare you against when booking a room. Think about it from a traveler’s perspective – what other accommodation options in your area would they consider?
Not every accommodation close to you will be a direct competitor. Your main competitors – those worth keeping a close eye on – will attract the same demographic. Usually, these accommodations will have similar offerings in terms of amenities, services and pricing.
A good primary compset typically consists of 5 to 10 competitor hotels. Tracking too many competitors can make it harder to draw the right conclusions, so focus on your main rivals. However, in some cases it can be valuable to create a secondary and tertiary compset. That way, you can really compare apples to apples by grouping competitors based on seasonality or niche target audience.
Key factors in identifying your hotel competitors
A good way to find important criteria for identifying hotel competitors is to think about the filters that travelers are setting on booking platforms like Booking.com, Expedia or Google Hotel Search: radius, price range, accommodation type, star rating, swimming pool or spa facilities, restaurant …
Give it a try: go to the Google Lodging module or a large, global OTA (Online Travel Agency) and set the main search filters to match your accommodation’s characteristics. The properties that appear in the search results give you a good indication of who your main competitors will be.
These are the main criteria you should take into account when identifying your hotel competitors:
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Location: Hotels in the same city, neighborhood or area are likely direct competitors, as travelers view location as one of the most important criteria. The exact location isn’t necessarily what matters most. Rather, proximity to major tourist attractions and transportation hubs can be a more important deciding factor. The radius in which to look for competitors can also vary depending on your destination (e.g., city center, coast or countryside).
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Type of accommodation: The type and size of the accommodation can often be a determining factor. A small bed and breakfast won’t typically compete with a 100-room chain hotel, as they cater to different traveler preferences and expectations. However, the lines between small boutique hotels, B&Bs and vacation rentals are becoming increasingly blurred, with guests prioritizing other criteria like unique experiences.
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Price range: Price remains a key factor in travelers’ booking decisions, especially given current inflation. Guests are increasingly budget-conscious, wanting value for money. Hotels with similar rates for rooms and services are often competing for the same customer segment.
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Rating: Online reviews heavily influence guests’ choice of accommodation. Travelers often even filter their searches by setting a minimum review score (e.g., 4 stars and up). If your hotel has a 4-star rating, chances are high you won’t compete directly with a 3-star rated hotel.
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Leisure facilities: The range and quality of leisure facilities can be a crucial competitive factor. Do you offer much sought-after facilities (e.g., pool, gym, spa, restaurant) similar to other hotels? Try not to focus too much on each individual facility or product. With guests increasingly seeking a total experience, it’s important to look at the service offering as a whole. Does the hotel offer ‘the basics’ or ‘the full package’?
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Business facilities: Does the hotel you’re considering offer a meeting or conference room or other business-friendly amenities, just like you? This is of course an important factor if you are trying to attract corporate guests.
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Atmosphere: A picture is worth a thousand words, especially when trying to convince potential guests to book. Based on the pictures you see online, does the hotel have a similar atmosphere to yours? Does it feel luxurious, modern, cozy or somewhere in between?
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Online exposure: Does the hotel have an online presence that is similar to yours or possibly stronger? If a hotel is hard to find on booking platforms, it’s likely not attracting many bookings and therefore not a strong competitor. The number of reviews is often a good indicator of this, as well as presence on metasearch and ranking on OTAs.
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Breakfast: Assess whether breakfast is included in your competitors’ room rates and compare it to your own offerings. If breakfast isn’t included, determine the additional cost and what type of breakfast is offered (e.g., varied buffet, regional, gourmet, etc.).
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Room types: Consider the features of the rooms the hotel offers and how they compare to your own. Do the rooms have better views or amenities that you don’t provide? These are also important considerations when comparing your pricing.
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Flexible check-in and check-out: Flexible check-in and check-out times can be a valuable perk for guests. Research whether your potential competitors offer early check-in and/or late check-out and at what extra fee.
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Cancellation policy: Flexible cancellation options can be a decisive factor for certain types of guests like early birds. How flexible is your potential competitor’s cancellation policy and how much is the additional charge?
If you take these factors into account, you will find your main competitors in no time. Once done, it’s important to review your compset regularly. Watch out for new properties or re-openings in your area that may be launching strong marketing campaigns or attracting a lot of media attention.
Once you have a good understanding of your competitors’ offerings and unique selling points, you can use this information to make informed strategic decisions:
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Keep your rates both competitive and profitable
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Spot opportunities to expand your online visibility
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Offer compelling deals and packages
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Tweak your market positioning to stand out
How to easily track competitor pricing and other data?
Finding your competitors is only the first step in maximizing your hotel revenue. Once you have identified your compset, you need access to accurate, real-time data to inform your strategic decisions and really gain a competitive edge.
Speed is key here. For a busy independent hotelier operating alone or with a small team, manually collecting and analyzing large amounts of competitor data can be too time-consuming. Chances are high the collected data will be outdated by the time you’ve adjusted your strategies. With the right technology catered to your needs and budget, you can easily keep track and act with confidence.
Find and outsmart your hotel competitors with Lighthouse
With Pricing Manager, Lighthouse offers the ideal solution for independent hoteliers to stay ahead of the competition. The AI-powered tool selects your main competitors for you and automates optimized dynamic pricing using accurate real-time data.
By analyzing vast amounts of data 24/7, Pricing Manager suggests optimal prices for the next 365 days. The rate suggestions are based on demand, occupancy, competitor rates and events in your area. Meanwhile, you stay in control of your pricing strategy thanks to the customizable settings.
To save you even more time, these optimized prices can be pushed automatically to all your distribution channels through the integration with our Channel Manager. The result? More bookings and revenue while you can focus on what you do best: creating a memorable guest experience.
About Lighthouse
Lighthouse (formerly OTA Insight) is the leading commercial platform for the travel & hospitality industry. We transform complexity into confidence by providing actionable market insights, business intelligence, and pricing tools that maximize revenue growth. We continually innovate to deliver the best platform for hospitality professionals to price more effectively, measure performance more efficiently, and understand the market in new ways.
Trusted by over 65,000 hotels in 185 countries, Lighthouse is the only solution that provides real-time hotel and short-term rental data in a single platform. We strive to deliver the best possible experience with unmatched customer service. We consider our clients as true partners – their success is our success.
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