Hotel Insider

5* Athens - Competitive Index - The "Electra Effect" (Part II)

by Victor Matsas • 03 Dec 2024

Location: Greece, Athens

We have written in previous articles about the importance of the Competitive Index and its relation to the initial score (starting point).

This indicator shows us day by day who does better at finding the desired balance between any initial advantage (or disadvantage) he has acquired due to his initial position and the price he asks for as a counterweight or counterbalance to it.

Thus, an initial lead at the beginning (starting position) implies a relative comfort for prices close to or above the weighted average (PM - Weighted Average) of the whole category, while on the contrary, an initial lag implies an inevitable pressure on selling prices in order to act as a counterweight to balance the -initially- disadvantaged.

Larger capacity units are difficult to compete with small and flexible boutique hotels, which is why we see many of them selling their rooms below public transport.

Therefore, it is not a question of first place in the Competitiveness Index (CI), but of combining a high position in CI with values above MM.

We chose to shop on Booking on a random date (November 4th) of sluggish demand to have most hotels at low occupancy. The PM for this day is at 230 €.

We note that the first 5 positions of the index are occupied by boutique hotels (Green Suites, Hellenic Vibes Smart Hotel, COCO-MAT Athens BC, Perianth, Grecotel Hotels & Resorts Pallas Athena and in 5th place we have the first relatively large hotel (Royal Olympic Hotel ) at 129 €. All these 6 units are below the MM, so their prices are marked in red.

In 7th place we have the first hotel (Electra Palace) of Electra Hotels & Resorts that sells above PM (259 €) followed by Gatsby Athens at 412 €. (price in green).

So we see (from the previous post) that the advantageous position that these two hotels acquired in the initial ranking allows them to sell above MM and at the same time declare themselves present in the top ten of CI. This is, after all, the holy grail!

The next hotel with prices above MM is 6 seats below Gatsby (AthensWas Hotel ) and the next 11 seats below (Electra Metropolis).

At this point one realizes the huge achievement of Electra hotels: They are the only hotels that, while not boutique, have managed to sell at prices above MM and have competitiveness indicators equal to those enjoyed by the crème de la crème of boutiques. We saw this in Thessaloniki as well.

Really impressive!