Hotels often use benchmarking as a security blanket to justify sticking to the status quo by saying, "At least we're doing as well as—or better than—our competitors." However, this comfort zone can quickly become a trap. You'll never set the pace if your only goal is to match the market. To truly lead, you need to learn from benchmarking insights without becoming just like everyone else. This means using data as a springboard for innovation—drawing inspiration from the past while keeping your focus on the future.
The Purpose of Benchmarking: Learning, Not Copying
At its core, benchmarking illuminates possibilities—it shows where you stand, highlights potential pitfalls, and reveals strategies that could help you improve. It's a learning tool for avoiding the mistakes that others have already made. By examining how similar hotels allocate labor costs, price their rooms, or package ancillary services, you can prevent inefficiencies and pitfalls while gleaning best practices.
The danger lies in blindly copying every competitive move without considering your unique situation. If you default to a "copycat" strategy, you risk losing your hotel's unique identity. Use benchmarking to inspire creativity, not to create clones. For instance, if a competitor excels in upselling techniques, adapt those principles to fit your brand voice, staff skills, and market position. In short, benchmarking is a powerful tool. It shows you what's working (or not) for others, but your hotel's success depends on how you adapt those insights to forge your own path forward.
Benchmarking's Limitations: Retrospective by Nature
At first glance, the more comparative data you have, the more precise your path to success. But here's the hidden catch: benchmarking data is always rooted in the past. By focusing exclusively on what your competitors achieved last quarter—or even last month—you risk chasing a moving target. Competitors constantly adjust rates, invest in new technologies, or pivot their marketing tactics, meaning your "current" benchmark may already be outdated.
This limitation becomes even more pronounced in an industry as dynamic as hospitality. Guest preferences shift, new distribution channels emerge, and technological change only accelerates. A benchmark can reveal where you once stood relative to others but can't always show you where to go next. To get ahead, you must pair retrospective insights with forward-looking strategies that anticipate market shifts and differentiate your hotel in ways your competitors haven't yet considered.
Balancing Act: Learning from Competitors vs. Leading the Market
The real skill in benchmarking is using data to boost your efficiency while keeping your originality intact. Observing how other hotels handle staffing, use upselling strategies, or cut down on food waste is helpful. However, if you just copy these methods, you'll always lag behind the innovators.
Instead, view benchmarking as the foundation for your hotel's strategic innovation. Ask yourself: How can we adopt the core ideas behind these best practices while elevating them with our own twist? You can make targeted improvements by identifying gaps—like higher-than-average credit card fees or lower ancillary revenue than your competitors. At the same time, use those insights to fuel unique concepts that no one in your competitive set offers. Whether it's a new virtual concierge platform, a signature in-room experience, or a locally inspired F&B concept, these differentiators ensure that you're not just catching up but propelling the market forward.
Ultimately, great hotels learn from others to eliminate obvious pitfalls and experiment with fresh ideas to stay a step ahead. By keeping one eye on competitors' past performance and the other on uncharted terrain, they can achieve a profitable balance between operational excellence and true market leadership.
Practical Example: Avoiding the Copycat Trap
Imagine a boutique hotel, Hotel Terra Vista, that discovered through benchmarking that its online reviews consistently lagged behind those of its closest competitors. The data revealed a few glaring operational inefficiencies—particularly slow check-ins and underperforming food-and-beverage offerings—areas in which competing properties excelled. Rather than simply mirroring the competition's tactics (like implementing a standard mobile check-in platform or reworking menus to match popular trends), Hotel Terra Vista took a bolder approach:
Customized Check-In Experience
Instead of rolling out a typical digital check-in kiosk, they launched a "Concierge-to-Go" concept. Guests who opted in received a quick text-based welcome before arrival, sharing fun insider tips and inviting them to bypass the front desk if they wished. This human-digital hybrid approach slashed check-in lines while maintaining a personal touch.
Hyper-Local Culinary Strategy
Hotel Terra Vista didn't just copy successful F&B strategies from its competitors. Instead, it partnered with local artisans—cheesemakers, craft brewers, and organic farmers—to create weekend "taste tours" highlighting hometown flavors. Benchmarking showed that the hotel's food costs were slightly higher than average. Still, by integrating local suppliers who provided seasonal produce at a discount in exchange for publicity, the hotel boosted both profitability and guest satisfaction.
The result? They improved their operational inefficiencies (checking the "benchmarking box") and introduced unique offerings that competitors didn't have—ensuring they weren't just catching up but leaping ahead. Through benchmarking, Hotel Terra Vista learned what needed fixing, but by adding their twist, they stayed one step ahead rather than perpetually trailing behind.
Managing Stakeholders: Balancing Data and Vision
While hoteliers may appreciate the nuances of balancing past insights with future innovations, owners often approach the issue differently. Many are cold, calculating investors focused on the numbers. To them, benchmarking is an objective way to see how their asset is performing—or underperforming—against the market. When those numbers show a gap, the instinct is often to mandate "fix it fast" rather than "get creative."
How can you bring these two perspectives together?
Speak the Owner's Language
Frame your innovative ideas in terms of concrete returns. If you propose a bold F&B concept or a unique guest-experience initiative, show the expected revenue lift or cost savings. Hard data—projected RevPAG (Revenue Per Available Guest), ROI timelines, or margin improvements—bridges the gap between imaginative thinking and investor confidence.
Present a Hybrid Approach
Owners may scoff at pure creativity, but they usually respect data-driven experiments. To prove value, combine benchmarking metrics with calculated pilot tests. For instance, if you see an opportunity to upsell spa services, start small with a three-month trial at one property or department. Share interim results that highlight incremental profit. Once owners see tangible gains, they're more open to broader rollouts.
Address Potential Risks Proactively
Investors worry about downside risk. Benchmarking data can illustrate how failing to innovate may lead to stagnation or even decline if competitors are already moving forward. Document the risk of not investing in fresh ideas: losing market share, dropping average rates, or reputational damage among next-gen travelers.
Create a 'Win-Win' Narrative
Emphasize that staying ahead of the curve is not an artistic indulgence—it's a hedge against future disruptions. Show how incremental improvements (rooted in benchmarking insights) can coexist with original concepts that differentiate the property. When owners see that you're not neglecting the fundamentals but enhancing them, they'll be more inclined to trust your broader vision.
Ultimately, owners want proof that what benefits the guest experience will also help the bottom line. By balancing the numbers they respect with the creativity they might initially dismiss, you'll forge a compelling case for both near-term gains and long-term growth.
Your Takeaway: Be a Market Leader, Not a Market Follower
After spotting gaps and identifying opportunities through benchmarking, your next move should not be replicating what everyone else is already doing. True market leadership means using those insights as a springboard for innovation. Yes, you need to address inefficiencies revealed by data—labor costs, credit card fees, or ancillary revenue leaks—but to pull ahead, you have to weave in a forward-looking vision that sets your hotel apart.
However, let's not forget the stakeholders. Many owners or investors see benchmarking as the ultimate yardstick for success: "Are we beating the comp set or not?" They're often laser-focused on near-term profitability and risk mitigation. Here's how you can bring them on the journey toward leadership:
Translate Innovation into Numbers
If you propose a creative initiative—like a locally sourced dinner concept or a new guest-experience app—show hard metrics, from predicted ROI timelines to how you'll measure incremental revenue or cost savings. This data-driven approach aligns your creative ideas with the owner's bottom-line expectations.
Position New Concepts as a 'Safe Bet'
Rather than framing innovation as a radical departure from what the benchmark says, highlight it as the logical next step. Show how it's a natural evolution from the issues revealed in the data—like plugging revenue leaks or tackling high operating costs—so it doesn't feel like a leap of faith.
Make Inaction the Bigger Risk
Benchmarking can also illustrate what happens if you stand still. Show owners that simply matching the market leaves you perpetually vulnerable to shifts in consumer demand or competitors' moves. Sometimes, demonstrating the cost of doing nothing is the most compelling argument.
By balancing hard data with creativity and skillfully managing stakeholder expectations, you can turn benchmarking from a simple performance check into a powerful tool for market leadership. It's not just about being "as good as" your competitors; it's about creating your own path and leaving them trying to catch up with you.
