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Hotel Competitive Advantage Strategy: A 2023 Guide

August 17, 2023

19 minread

byCasey Clark

Casey Clark
Casey Clark

CEO, Co-Founder

Chicago, IL

As a business partner, he helps his clients get a holistic view of their financial health by slowing down to talk about numbers. Then, he breaks down even complex problems into one or two elements to help them break through their barriers of growth.

According to consultancy firm Deloitte, 71% of US businesses expect a full recovery in travel by the end of 2024. More than ever, hospitality businesses are feeling the pressure to stand out in a saturated market.

Largely, the only way to do that is to develop a hotel competitive advantage that offers guests a unique and desirable reason to choose your business over others.

As hospitality advisors, we’ve put together this blog highlighting 15 ways to improve your hotel’s competitive advantage strategy and trends shaping independent hotels and hotel chains.

Ready to learn how to compete in the hospitality industry?

Hotel Competitive Advantage Explained

how to compete in the hospitality industry

A hotel with a competitive advantage generates excess returns for long periods, meaning its profits supersede the capital spent on construction and fixed costs to operate it. This may be due to geographic location, a well-known brand name, unique amenities, superior customer service, excellent pricing, or other factors related to government policy.

Hoteliers rely on their competitive advantage to maintain steady customers and benchmark ideal pricing. Without a competitive advantage, a hotel is unlikely to offer anything unique or superior to customers, which gives competing hotels an even footing and flattens the market.

For instance, the Ritz-Carlton in New York is in the heart of Manhattan, close to Central Park. Its prime location is a significant competitive advantage. Conversely, hotel brands like the Four Seasons hotels are renowned for luxurious accommodations. Their brand reputation attracts a loyal following of guests willing to pay a premium for a high-quality experience.

15 Ways to Hone a Hotel Competitive Advantage Strategy

Gaining an edge requires creative solutions. Here are 15 strategies to incorporate into your hotel competitive advantage strategy. Implementing them won’t necessarily yield overnight success, but it will put you on the right track.

#1. Analyze Your Hotel Business

Assess the qualitative and quantitative aspects of your hotel. Quantitative refers to information expressible in numerical form, while qualitative refers to descriptive information that relates more to qualities or characteristics.

  • Evaluate your hotel’s performance: How has your hotel been performing in the past year or two? Consider occupancy rate, average daily rate, and revenue per available room. Look at guest feedback to identify areas of strength and opportunities for improvement.
  • Identify your USPs: Examine your hotel’s unique selling propositions (USPs) and how they set your hotel apart from the competition. Consider the physical differences, such as location, decor, and design, as well as the intangible differences, such as customer service and customer experience, to determine where your hotel stands out.

#2. Monitor Your Competitors

Use online travel agencies (OTAs) like TripAdvisor,, or Expedia for competitor research. These platforms provide insights into competitors’ fees and how guests rate their services. After studying their promotions, you may find you can offer better deals or extra perks to attract visitors.

Social media is also a great avenue to determine which lodgings are most popular in your region. You may even be inspired to improve your marketing efforts. Another way to learn who your competitors are is to ask guests if they’ve stayed in the area before and why they chose you this time.

For a more systematic approach, we recommend utilizing the strategic competitive analysis tool, Porter’s Five Forces to gauge your hotel’s untapped opportunities and potential profitability.

#3. Provide Stand-Out Services

competitive advantage in hotel industry

Little things make a big difference in your overall guest experience. It goes without saying that your hotel should be clean and well-maintained, and the staff should be friendly and helpful.

Details such as providing fresh linen and towels, stocking the coffee maker, and offering welcome amenities are simple tactics that give you a competitive edge. These details can enhance your hotel experience, especially if you don’t have the capital for major upgrades.

#4. Offer an Experiential Getaway

Airbnb is the forerunner of experiential hospitality. They focus on providing guests with unique, immersive experiences they can’t find elsewhere. Examples include local art and cooking classes, wellness retreats, and interactive area tours.

You, too, can tap into your traveler’s desires for an experiential getaway. Partnering with local adventure outfitters and offering additional services like errand running and dry cleaning lets guests focus on exploration.

Today’s travelers yearn for excitement. Offering concierge services that allow them to explore and experience all your destination has to offer capitalizes on creating a unique getaway.

#5. Elevate Your Hotel Through Brand Building

Your hotel can elevate its reputation and increase profitability with the right branding and marketing strategies. There’s a substantial amount of work that goes into branding, but as a start, you can:

  • Define your brand identity: Once you understand your brand identity, you can develop a strategy to communicate your hotel’s unique value proposition to guests. During this process, consider your hotel’s personality, values, and competitive advantages.
  • Create a strong visual identity: Your hotel’s online presence, including its brand name and logo, should be memorable, distinctive, and relevant. Your brand image is how your guests interact with your hotel, including your website.
    Ideally, you want a consistent brand image across all touchpoints to reinforce your brand’s messaging. A hotel’s visual identity should be authentic and consistent.

#6. Create Value-Added Experience

hotel competitive advantage strategy

Did you know, according to marketing company Outbound Engine the chances of selling to an existing customer are 60-70%, whereas the probability of selling to a new customer is 5-20%?

Offering incentives to loyal guests is an effective tactic. Your property’s existing loyalty program can play an essential role in getting guests to book their next stay. To stand out, your hotel can offer free upgrades or arrange to have a welcome drink in your guest’s rooms when they check-in. Little touches like these make a big impact.

Just bear in mind that value-added perks differ from hotel to hotel. Aligning incentives with customer values is paramount to creating meaningful connections and brand loyalty.

#7. Cater to International Travelers

According to the World Tourism Organization, international tourists spend an average of $1,200 per day on their vacation, while domestic tourists only spend $600. No doubt, it’s well worth catering to international travelers.

Simple ways to appeal to overseas guests are to provide language services, international debit and credit card payment options, and information about local attractions. Offering package deals and discounts to foreigners for long-term stays also helps.

#8. Listen to Guest Feedback

Guests often share details about your hotel’s best qualities and shortcomings, letting you know where to make changes. Additionally, they may give insight into your standing against the local competition.

You can solicit guest feedback by:

  • Conducting post-stay guest surveys: Ask each guest to complete a survey regarding their stay and invite them to leave any additional comments.
  • Incorporating rating systems into your website and mobile app: Allow guests to rate their experience online for an easy and accessible way to gather feedback.
  • Holding informal discussions at the front desk: Ask guests about their stay during check-in and check-out, and encourage an open dialogue.

#9. Provide Convenience and Support for Hotel Guests

Hotel Competitive Advantage Strategy

Ensuring guests have an easy and convenient experience is essential regardless of your hotel’s location.

  • Ensure guests have multiple ways to contact staff, such as on-site assistance, phone, email, or an online chat platform.
  • Provide easily accessible maps in the lobby and guest rooms.
  • Offer a 24-hour concierge service for guests needing help during late night or early morning hours.
  • Send a welcome email to guests with travel information, local attractions, and public transportation links.
  • Make sure your internet connection is fast and reliable, and offer plenty of charging ports in the rooms.

#10. Maximize Social Media Engagement

Creating shareable and interesting content that resonates with your target audience is the best strategy to maximize social media reach. Post content that encourages conversation and sharing, using appropriate hashtags, and optimize it with SEO and visuals.

The choice of social media distribution channels depends on your target audience and strategy (in most scenarios, it’s cost-effective and easier to outsource online marketing to an agency).

You can use Facebook, Instagram, TikTok, Twitter, YouTube, Google My Business, LinkedIn, and TripAdvisor. Then there’s also Yelp, Local Guides, and Foursquare you can leverage to garner reviews and feedback.

#11. Optimize Your Management Processes

To improve hotel operations management, focus on core functions, such as providing rooms, food and beverage, and guest services. Investing in technological solutions that help with the booking process, check-out process, and more is a great way to streamline these processes.

Additionally, ensure your staff is adequately trained and that all quality control measures meet the highest standard in terms of cleanliness. Monitor critical metrics to identify more opportunities for efficiency. Additionally, automating repetitive tasks and standardizing best practices can go a long way in boosting efficiency.

Above all, equip your staff to provide excellent customer service, which can be a key differentiator for your hotel. Replacing manual processes with systems and aids can help staff provide the highest level of service.

#12. Offer Ample Accommodations for Maximum Comfort

Consider adding swing wall beds which allow guests to transform their space and create more room for work or activities. Not only does this give more flexibility to travelers who may have extended trips or families with children needing floor space for playing, but it also provides teenagers with the privacy they crave while still keeping them safe. Upgrading all hotel rooms to suites is unnecessary, but adding valuable features like swing wall beds will create a better experience for all guests.

#13. Elevate Wellness Experiences

hotel competitive advantage

Some ways to prioritize and cater to increasingly health-conscious guests include:

  • Offering a curated selection of spa treatments that support physical, mental, and spiritual healing.
  • Incorporating wellness-focused activities like yoga, meditation, and guided health walks into their daily activities.
  • Introducing health-conscious menus and room service meals that cater to specific dietary restrictions and provide nourishing options.
  • Providing guests with more access to wellness amenities such as fitness centers and swimming pools ensures that guests stay active during their stay.

#14. Embrace Eco-Friendly Initiatives

Initiate simple changes such as using locally sourced, organic, and sustainable products in your restaurants, offer guests the option to opt out of daily linens and towels, and encourage the use of LED light bulbs. These efforts not only conserve natural resources but attract more environmentally conscious guests who appreciate the extra sustainability efforts that hotels are taking.

#15. Embrace Agility in Business Sustainability

What used to be a luxury offering (like color TV) is no longer cutting it, and guests are looking for more. Staying on top of market trends and your competition’s tactics is the best way to keep ahead and ensure a competitive edge. Set up Google Alerts, follow social media feeds and blogs, sign up for deal alerts, and search reviews for competitor feedback to stay up to date with potential changes your guests may be looking for.

Current Hospitality Industry Trends

If you want to improve guest satisfaction and maintain your hotel’s competitive advantage, you need to be aware of current hospitality industry trends:

  • The rise of social media: Influencers and user-generated content are becoming increasingly popular among hotels to reach new audiences. Influencers offer their followers honest reviews and recommendations about a hotel. At the same time, user-generated content allows customers to share their experiences in real-time. Both offer hotels the chance to have a larger presence on social media and create a more personalized experience for their guests.
  • Online ticketing platforms: Online platforms allow hotels to respond to customer queries quickly, list their available rooms and services, and process payments. This significantly reduces the administrative overhead associated with manual booking processes, increases efficiency, and improves customer experience as they can find and book a room in a few clicks.
  • Remote working guests: Research by freelancer platform Upwork revealed that 22% of the American workforce will be remote by 2025. Hotels can make the most of this new normal by creating remote working hotspots for locals and travelers. Offering facilities like plenty of plug sockets, complimentary high-speed internet, conference rooms, and delicious coffee to attract guests seeking out working holidays.

Using Technology to Have a Competitive Advantage in Hotel Industry

Voice-Activated Guest Rooms

Technology allows hotels to provide a better customer experience, increase operational efficiency, and open new revenue streams. As part of a hotel’s competitive advantage strategy, you must cater to today’s tech-savvy travelers.

Remote Check-In and Check-Out

Give your guests more freedom and improve the overall experience by offering mobile check-in and check-out. This solution frees up valuable staff time to focus on creating a welcoming atmosphere. A mobile app also provides more upsell and engagement opportunities since guests must download the app to use the mobile check-in service.

Branded Mobile Apps

Integrating a mobile app with an existing loyalty program creates a personalized experience for each guest. Since mobile apps are an integral part of our daily lives, there’s very little friction in onboarding guests. You can also leverage the data and feedback from your hotel property’s mobile app to improve their services and optimize guest satisfaction.

Keyless Entry

Keyless entry is becoming increasingly common in hotels, with major chains like Hilton and Marriott already utilizing this competitive advantage in the hotel industry. With mobile key technology, a guest won’t have to deal with a room key that can easily be lost, copied, or stolen – all they need is a code or card to enter the hotel and their room.

Voice-Activated Guest Rooms

Voice-activated guest rooms are hotel rooms equipped with smart technology that can be voice-activated to control the lights, air conditioning, and entertainment functions. This hotel competitive advantage provides a more convenient and enjoyable stay for guests streamlined to their preferences.

How to Sustain Your Hotel Competitive Advantage Strategy

hospitality advisors

Developing a robust hotel competitive advantage strategy entails carefully analyzing your business’s challenges and untapped opportunities. There’s no point in implementing anything without knowing what needs to be improved.

Cultivate Advisors is an experienced hospitality consulting firm that works to identify the unique characteristics of hospitality businesses and transform them into market leaders. Schedule an assessment to see how we can provide solutions to optimize your performance and competitive advantage!

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