How competitive am I ? What does it mean ? How do I measure it?

by Victor Matsas • 02 Nov 2024

Location: Greece, Thessaloniki

As I wrote in the post "The race before The Race", the prizes go to the drivers who reach the best possible result, regardless of the initial ranking. And in order for a driver to reach the maximum possible result (always in relation to the possibilities provided by the vehicle he has been given), he must have managed to find the golden formula of the right pricing.
How competitive am I ? What does it mean ? How do I measure it?
Proper pricing means selling "so - as", is the golden mean that the Formula 1 driver utilizes all the possibilities of the vehicle to finish the race at the minimum possible average speed. Remember, stepping on the gas means lowering prices, so in this case the profit of the business decreases.

Of course, we are not in a position to know all the ways that every hotelier finds to keep his business in shape, if, for example, he has contracts with various companies or agencies that bring him frequently-dense groups or schools and thus makes ends meet. We see the situation as it is depicted according to the internet data, ie we consider that all potential sales of each unit concern the online market and nothing more.

At the end of the day it is the decision of each entrepreneur how he thinks he should run his shop, others are interested in high occupancy and others look at net profitability indicators per room sold.

So we thought it useful to combine the ranking data with the prices that each hotel unit sells online to create a competitiveness index that will answer the question: How competitive is one hotel compared to another?

Let me repeat here for those who may not have gotten the point: Competitive is not the one who sells saves and good cheaper than everyone. Competitive is the one that utilizes all its abilities and advantages and sells at the best - for its sizes - possible price. If someone is not competitive and does not want to reduce their prices, the only thing they can do to improve their situation is to change their data, eg. More demand for his hotel, better services, better reviews etc.

The next post will follow an analysis of the graph below and an explanation of competition strategies followed by specific hotels.