A comp set analysis compares your hotel's occupancy, rate and revenue with a hand-picked group of similar hotels, so you can see whether you are gaining or losing market share. The result is only as good as the group you choose. A competitive set is a group of comparable hotels used to benchmark performance, pricing, positioning and market share, and a poorly chosen set can lead to misleading conclusions. This guide shows how to pick the properties, which numbers to compare, how to read them, and how often to revisit the set.
TL;DR
- A comp set is the group of hotels guests genuinely consider instead of yours. Build it on shared traits, not just proximity.
- Compare occupancy, ADR and RevPAR as indexes against the set. A score of 100 means you hold your fair share.
- Read the three indexes together. They show whether a gap comes from price or from demand capture.
- Review the set regularly. New openings, renovations and rebrands make an old set misleading.
- Treat the set as a decision tool: each gap should lead to a pricing, distribution or guest-experience action.
Table of Contents
- What a comp set analysis tells you
- How to choose the properties in your comp set
- The numbers to compare
- Reading MPI, ARI and RGI together
- Turning the findings into decisions
- How often to review your comp set
- Common mistakes that distort the comparison
- Our perspective
- Put your comp set to work
- FAQ
- Sources
What a comp set analysis tells you
Your own numbers tell you what happened. A comp set tells you whether it was good. If occupancy fell four points last quarter, that is alarming in isolation. If every comparable hotel in your market fell six points, you actually gained share.
That context is the point of benchmarking. The benchmarking industry describes it as comparing a property's performance against the competition to show what success and failure look like in that property's own circumstances, and it treats occupancy, ADR and RevPAR as the foundational metrics.
A comp set analysis helps you answer practical questions:
- Are we priced too high, too low, or about right for the demand we capture?
- Is a slow month a market problem or our problem?
- Which segments or days of the week are we losing to comparable hotels?
- Did the new hotel down the road actually take our guests?
How to choose the properties in your comp set
The most common mistake is listing the hotels nearby. Proximity matters, but it is one factor among several.
Start with shared attributes
Hotels can define a set by identifying shared attributes such as room count, meeting space, food and beverage offerings, spa, age, amenities, geographic proximity and hotel class. No single definition of similarity fits every operation, so the same source suggests a primary set for your closest rivals and secondary sets for deeper analysis.
A practical way to apply this is a simple scoring grid. List every candidate and mark each one against your hotel:
| Criterion | What to check |
|---|---|
| Location | Same demand generators: airport, convention center, campus, beach, downtown core |
| Class and brand tier | Same scale, from economy through luxury |
| Product | Room count, room types, meeting space, F&B, spa, age and condition |
| Price position | Typical ADR relative to yours |
| Guest profile | Business, leisure, group, extended stay |
These criteria echo the main considerations in a hotel market study guide: location, brand, product type, quality and rate relative to the subject property. A hotel that matches on four of five rows is a strong candidate. One that matches on one is probably a neighbor, not a competitor.
Do not simply pick the hotel across the street
Selecting hotels because they are close, when they perform at a very different level, can produce misleading benchmark results. A 120-room select-service property beside a 400-room convention hotel shares a street, not a customer.
Add the guest's point of view
Numbers on a spreadsheet will not tell you which hotels guests actually compare you with. Hotel school research advises that you do not overlook qualitative sources such as customer reviews, OTA rankings and surveys, and that the set should reflect the booking journey from the guest's perspective.
Try this: open your top booking channels, search your dates as a guest would, and note which properties appear beside yours at similar prices. Read the reviews of those hotels. Look for the reasons guests chose them over you. If a property keeps showing up in that shortlist, it belongs in your set even if its address is two miles away.
Short-term rentals can belong in that picture in leisure markets. Their hosts live and die by guest ratings, and understanding Airbnb Superhost requirements shows you what rating thresholds those competitors are working to hold when guests compare them with you.
Check size and independence
If you plan to use formal benchmarking reports, the rules matter. One major benchmarking program requires at least four participating properties, excluding your own, and at least three of them must not be affiliated with yours. It also caps any single property at 50% of the set's room supply, any single brand at 50% and any single company at 70%. These rules keep one large hotel from dominating the comparison, and they are a good discipline even for an informal internal set.
A sound set usually has between five and ten hotels. Fewer than that, and one unusual month at one property skews everything. Many more, and the set stops describing your real competition.
The numbers to compare
Three metrics sit at the center of every comp set analysis. The standard definitions in the STAR report guide are:
- Occupancy: rooms sold divided by rooms available.
- ADR (average daily rate): room revenue divided by rooms sold.
- RevPAR (revenue per available room): room revenue divided by rooms available.
The same guide defines an index as your performance divided by the comp set's performance, multiplied by 100. A score of 100 means fair share. Above 100 means more than your fair share, and below 100 means less. In common usage the three indexes are called:
- MPI (market penetration index): occupancy index, which reflects volume.
- ARI (average rate index): ADR index, which reflects rate.
- RGI (revenue generation index): RevPAR index, which reflects total revenue performance.
Look at more than one period. The report format compares you with the set across the most recent 18 months as well as year-to-date, running three-month and running 12-month periods. A single month can mislead. A running 12-month view shows the trend.
A worked example
The figures below are illustrative, not real market data. Say your hotel and your comp set performed like this over a quarter:
| Metric | Your hotel | Comp set | Index |
|---|---|---|---|
| Occupancy | 72% | 75% | 96 (MPI) |
| ADR | $168 | $150 | 112 (ARI) |
| RevPAR | $120.96 | $112.50 | 107.5 (RGI) |
You earn more per available room than the set (RGI above 100), but you fill fewer rooms (MPI below 100). Your rate premium is carrying you. The question becomes whether a small rate adjustment on soft nights would recover occupancy without giving back more revenue than it gains.
Reading MPI, ARI and RGI together
An index in isolation can flatter or alarm you. Taken together, the three tell a story about price versus demand. A common interpretation framework says that if ARI is above 100 but MPI is slipping, you may be pricing above what the market will sustain, and if MPI is strong but ARI lags, you may be filling rooms at the expense of rate.
Here is a quick reference:
| Pattern | What it may signal | First thing to examine |
|---|---|---|
| High ARI, low MPI | Rate ahead of demand | Rate strategy on low-demand dates, value perception |
| High MPI, low ARI | Volume bought with discounts | Discount depth, channel mix, rate fences |
| Both below 100 | Weak positioning or product gap | Reviews, photos, product condition, visibility |
| Both above 100 | Winning share | Protect it, test further rate increases |
Treat these as prompts for investigation, not verdicts. The index tells you where to look. Your reviews, channel reports and sales pipeline tell you why.
Turning the findings into decisions
A comp set analysis that ends in a slide deck wastes the effort. For each gap, assign an action and an owner.
- Pricing: if ARI is high and MPI low, test lower rates on specific need-period dates rather than a blanket cut. If MPI is high and ARI low, tighten discounts and raise your floor rate.
- Distribution: compare where the set's visibility seems strongest on booking channels, and check your own listing quality, photos and rate parity.
- Guest experience: if you trail the set on both indexes, go back to reviews. Ask what guests praise about the properties that beat you.
- Segments: break the comparison down by day of week and customer type where your data allows. A weekday corporate gap needs a different fix than a weekend leisure gap.
- Forecasting: use your index trend to set realistic targets. A hotel at 92 RGI aiming for 110 in a year needs a plan with named levers.
One published case shows what this can look like in practice: a revised comp set led to a change in selling strategy and an improved RevPAR index.
How often to review your comp set
Markets move. Benchmarking guidance recommends reviewing comp set selections continuously as markets change through new hotels, supply reductions, brand-affiliation changes and shifts in demand generators. Hotel school research makes the same point: an unrevised set can lead to inaccurate and outdated conclusions as openings, renovations and rebrands shift the competitive landscape.
A workable rhythm:
- Quarterly: a quick check. Has a competitor opened, closed, renovated or changed flags?
- Annually: a full rebuild of the scoring grid. Re-score every candidate and every current member.
- Event-driven: after a major local change such as a new convention center, a large new-build hotel or your own renovation.
Write down why each hotel is in the set. When you review, you will know whether the reason still holds.
Common mistakes that distort the comparison
Choosing by habit or ego. Even with objective criteria, selection remains partly subjective, and bias can affect which hotels get included or excluded. Owners tend to include the aspirational hotel they wish they were. Ask a colleague outside revenue management to challenge the list.
Mixing performance tiers. Benchmarking reports grade a set by deviation from the norm, and a low grade indicates the property may not be benchmarked against comparable properties. If your indexes look strange, suspect the set before you suspect your team.
Comparing headline rates only. A $149 room and a $149 room are not the same if one includes breakfast and free cancellation and the other does not. Compare like with like on room category, meal plan, cancellation terms and occupancy.
Ignoring disruption. Major disruptions, such as the pandemic, can interrupt reporting and make a comp set non-compliant. After any shock, re-check that your set still makes sense.
Using one period. One strong month does not prove a strategy works. Look at running 12-month trends alongside the latest month.
Our perspective
We see the same pattern across hotels and restaurants: the data exists, but nobody has turned it into a decision. A comp set report arrives, the indexes get a glance, and the next pricing meeting runs on instinct.
Our approach is data-driven. We start with market trends and guest feedback, and we build the comparison around the guest's real alternatives, not around a list of neighbors. Then we connect each gap to an operational or marketing action, so that a number like an ARI of 112 or an MPI of 96 becomes a plan with an owner.
We believe a well-built comp set is the starting point of a customized strategy, not the end of an analysis. Our work is designed to help hoteliers and restaurant owners improve occupancy, retention and profitability by tying benchmarking to the daily decisions that move those numbers.
La’Quentin
Put your comp set to work
If you own or invest in a hotel and want help turning benchmarking into pricing, positioning and guest experience decisions, we can help. Our hospitality marketing strategies combine market analysis, customer feedback evaluation and performance optimization, tailored to your property.
To talk through your market and your set, book a consultation.
FAQ
What is a comp set in the hotel industry?
A comp set, or competitive set, is the group of comparable hotels a property uses to benchmark its performance. You compare occupancy, ADR and RevPAR against the group to see whether you are gaining or losing market share.
How many hotels should be in a comp set?
The formal benchmarking program requires at least four participating properties besides your own, with at least three unaffiliated with you. Many operators work with roughly five to ten hotels, which is enough to smooth out one-off swings without diluting the comparison.
What is a good RGI, MPI or ARI score?
A score of 100 means you hold your fair share of the set. Above 100 means you capture more than your share, and below 100 means less. The three together matter more than any one, because they separate volume from rate.
How often should I update my comp set?
Check it quarterly and rebuild it at least once a year. Revisit it sooner after a new hotel opens, a competitor renovates or changes brands, or a demand generator in your market changes.
Sources
- Comp Set | HSMAI Academy
- How to use the STAR report
- What is hotel benchmarking?
- Defining the right competitor set
- Competitive set guidelines
- Hotel competitor analysis: reports, comp sets and insights
- How to identify a hotel competitive set
- Building a comp set: best practices
- Hotel competitive set: what it is and how to build it
- Careful comp set selection key to performance