Article by Trent Munday
Most hotels will have a competitive set. A group of hotels who are all competing for the same guests. The competitive set is usually based primarily on location and then secondarily on hotel category (ie: 5 star, 4 star, etc). In the simplest terms, the number of hotel rooms sold by your hotel divided by the total number of rooms sold by the competitive set, gives your hotel’s market share.
|Hotel Name||Rooms Occupied||Market Share %|
|The Ritz Hotel||220||44.9%|
|The George Hotel||130||26.5%|
|City View Hotel||75||15.3%|
In my early days as Night Auditor in a hotel, it was my job to compile the nightly Market Share Report. Around 4am each morning I’d call the other hotels in our competitive set, get their Occupancy, ADR, etc., for the previous day and produce the report. The Director of Sales was always the first one looking for that report in the morning because it was her job to find a way to wrestle market share away from the competitors. It was a good way for us to measure ourselves versus our competitors.
Question Without Notice
Recently, the General Manager of a hotel where we manage the spa asked me, “what’s our market share for spa?”
Fair question, I thought. I didn’t have an answer. But the more I thought about it, I wondered if maybe the spa industry isn’t quite ready for this metric yet.
Maybe it’s a tad premature.
You see, I reckon Market Share is a metric for mature markets. Create a market first, then worry about market share. Seems pretty logical, right?
The first tablet computer is said to have been invented as early as 1956. But until Apple introduced their iPad to the market in 2010, nobody really talked about the market share for tablets. Why? Because until then, the market hadn’t really matured. It took Apple to wake the market up and create a demand for tablets. Once they did that, the likes of Samsung and Microsoft reinvigorated their own tablet programs. Then, all of sudden, market share became a meaningful measure of success.
Of course, spas have been around a bit longer than tablets – but not much. Given this, it might be fair to say we should be ready to measure our Spa Market Share. But I’d argue that, unlike tablets, we are still have some way to go before the spa marketplace is a mature one.
Actually, now that I think about it, I don’t know that I’ve ever even seen a market share report for F&B in hotels either. Maybe that’s because we assume most guests will just eat in the hotel where they stay, or go outside? If we accept that, the same probably applies to spas. Let’s be honest, you’d have to have a really special hotel spa for a guest to leave his hotel to go to yours just to use the spa.
What do you think? Are we ready for a Spa Market Share metric? Does anyone out there already track this?