Competition

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Competition in the market

A way to check the competition is by looking at three types of competition:

  • Generic competition (time and money)

How many people travel, and what is their average income? How/where do they usually spend their money? What are their sentiments? Consumers can only spend their money - and their time - once. Try to use some realistic figures from the real local situation in your country.

  • Specific competition (or lodging alternatives).

If consumers decide to spend their money on lodging, they can choose to stay in a hotel, a campsite, use Airbnb, stay with friends and relatives etc.

  • Selective competition (with direct competitors)

If consumers choose a hotel, other competitors offering the same product in the same market are the most likely competitors. The competition is now mostly based on brand and product specifications. We call these the direct competitors. In the city the Emerald Forest Hotel is located in, their are approximately ten other hotels, which the Bergman's consider to be (direct) competitors.
Of course there are other theories on competition, like Porter's 5 Forces or check Seven favorite frameworks or info on a Comp set.


In the Game itself, there are also two competitions, one on creativity and one on profit.

Cooperation

Because normal economic competition rules apply, hotels are not allowed to work too closely with each other on prices; making price-covenants with competitors is forbidden and illegal. It is considered important, that customers have free choice and that there is serious competition. Creating an organisation which covers the interests of several hotels or all hotels (for instance, in a promotion) is a normal thing, and not done yet in the city. This could for instance, be a DMO. Any serious cooperation could bring advantages to the hotels teaming up, if there is a legal ground (an agreement) and described obligations and advantages for all parties. Obviously, it will also incur some costs.

Secret

A lot of information on competitors is freely available. Some information should be kept secret not only for the sake of your hotel, but also by law (privacy regulations like GDPR). Your operating review, as anything in your Team file, is for your (hotel) eyes only. If problems arise, you could accuse another hotel of an illegal act, or for that matter, be accused. You could get a fine related to (for instance) legal issues or, for that matter, bonuses.

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