Building a Comp Set – Best Practices
Hotel competitive sets, commonly known as “comp sets,” are a core element of STR’s performance benchmarking program. Without a comp set, and the marketplace intel that comes along with it, you’re left guessing as to where you can improve the performance of your property or portfolio.
That is why choosing the appropriate group of competitor hotels is vital in the quality of the reports and analysis STR delivers you. For example, selecting hotels that perform at different levels than your subject can produce misleading results, such as extremely high or low index levels across all key performance indicators (KPIs). Simply point, you might be benchmarking against players in “different leagues.”
In this latest blog, let’s discuss the factors you should take into consideration when selecting a comp set and how we can help.
What comprises the best compset?
At STR, we have developed a statistical model that factors data from more than 30,000 primary comp sets. Through this analysis, we have identified nine factors that most influence the dynamics within a set. For comp set grading purposes, this model takes into account high-level factors such as class and location, and does a comparative analysis of the performance of your set and all other sets with similar composition.
Using the most current performance data, the model assigns a grade to your set, based on how much your set deviates from the norm. The larger the deviation, the lower the grade. A low grade is an indication that your property is not being benchmarked against comparable properties.
When selecting a comp set, we recommend that you not only select those hotels “across the street” from your subject property. Instead, we encourage you to take into account the characteristics of the hotels in your area, such as their class, room count, meeting space, etc. Gain insights on the performance of the competition leads to more informed decisions when selecting a set, and this is where our comp set advisory services can be helpful to you.
STR’s Comp Set Suite
Through our Comp Set Suite, we offer various levels of analysis using our grading model, our analysts’ expertise and market knowledge to guide you through the comp set selection process.
Comp Set Grading*
Our base product provides you with a snapshot of the strength of your current comp set. This solution highlights the two biggest factors that decrease the quality of your set and the final grade.
We use a grading scale just like school grades, with “A+” being the highest grade that can be achieved and “F” being the lowest. This grading tool is available for individual properties or for large portfolios.
*Currently only available for U.S. and Canada clients
Our second option for comp set consulting results in a list of potentially competitive properties, produced based on an analysis of performance and hotel census data. Selecting competitors from a curated list allows you to make more informed decisions to enhance and strengthen your comp set.
Full Comp Set Consultation
Our higher-tier product gives you the opportunity to have our team of experts guide you through the process of selecting the most optimal comp set. Combining our team’s expertise and the accuracy of our models, we are able to curate a list and find the best combination of competitive properties, so you can better benchmark your hotel’s performance.
Why should I care about the strength of my comp set?
Let’s take a look at Property A and its current set, which has a grade of C based on our model’s calculations.
After some analysis, our team has found a new and improved set, with a grade of A+. The custom RPM for the new set, based on performance for the same time period, shows that the subject property ranks 5th for RevPAR index.
Whereas with a new set like the one above, the subject property is not the leader of the pack as desired. The aggregated comp set performance sheds some light on areas in which the subject property has optimal performance and areas where there is room for growth.
As with all of our custom projects, we strive to deliver the products that best meet your needs, and that includes helping you find an optimal comp set. Contact our Consulting & Analytics team for more information at firstname.lastname@example.org