Certified Hospitality Manager (CHM) Practice Exam

Analyzing competitor pricing is crucial for hotels to ensure they remain competitive in the market. The hospitality industry is highly dynamic, and customer preferences can shift rapidly based on various factors, including pricing strategies. By keeping an eye on what competitors are charging, hotels can adjust their pricing models accordingly to attract customers and maintain market share.

In a competitive environment, if a hotel sets its prices significantly higher than competitors without offering additional value, it risks losing potential guests to those who offer better rates. Conversely, pricing significantly lower without a strategic reason could lead to diminished perceived value or unsustainable profit margins. Thus, understanding competitor pricing helps hotels find the right balance that appeals to their target audience while remaining competitive.

This approach also enables hotels to identify trends in pricing, promotions, and packages that are successful in the market, giving them insights that can inform their own marketing and sales strategies. This kind of analysis is a fundamental element of effective revenue management and strategic planning in the hospitality sector.