You don’t have to run faster than a lion!

Two cameramen in central Africa filming an adult male lion from 200 metres away, noticed that the lion was starting to get irritated with them. Still filming one of the cameramen started to slowly take off his boots and slide on a pair of running shoes. The other cameramen noticed his mate putting on the runners and said, “don’t be silly you will never out run a Lion”, the other cameraman turns and says, “I only need to out run you”! I am using this story to demonstrate that you don’t need to be the best holiday house in Australia (Lion), you just need to be better than your local competitors.
This is why it’s important that you know why your guests think your holiday house is better than your competitors as this will help you to understand what is your competitive advantage, and this will improve your rental income.

You can determine your holiday house’s competitive advantage by undertaking competitive analysis. Competitive analysis allows you to determine what your competitors’ strengths and weaknesses are so you can improve your holiday house’s own competitive advantage based on these.

Stage 1: What evaluation criteria should I use to measure your strengths and weaknesses?

Its important to select criteria that is easily measured and is what your market is looking for. Some examples of criteria might be –

    • Host service
    • Parking
    • Location to key areas
    • Facilities- pool table, spa, pool
    • Yard, whether it is fully fenced and size
    • Heating and cooling
    • Wood fireplace
    • Cleanliness
    • Number of bathrooms & bedrooms
    • Reviews
    • Price

You select what ever criteria you think will help with the analysis.

Stage 2: Who are your competitors?

Once you have selected the key criteria you want to analyse. You can put the filters through HomeAway as an example and it will bring up similar properties near your holiday house making it easy to review with the selected criteria. In Example 1. I have selected 6 criteria and 3 competitors to analyse.

I have scored each criteria out of 5 to -5, a positive score means the holiday house is better than your own, thus a negative score means your holiday house is better than the competitor.

Stage 3: Compare features and benefits

Go thru each of the competitors carefully reviewing each criteria compared to your own holiday house and score accordingly. You need to understand that some criteria is worth more than others i.e Location, guests will pay more for a holiday house right on the beach regardless of the other criteria.
Example 1: Competitor Analysis table

House 1

House 4

House 3

1. Location

5

-5

-3

2. Facilities

0

2

3

3. Yard- fully fenced and size

-5

0

5

4. Bathrooms

0

-5

3

5. Reviews

0

0

5

Totals

0

-8

13

Price per night

$370

$200

$320

House 1
This holiday house is right on the beach foreshore, it has no backyard. The bathrooms, facilities and reviews are very similar to your holiday house.
House 2
This holiday house is 5 minutes out of town and location means you can’t walk anywhere. It has better facilities than your property but only 1 bathroom. The reviews are very similar.
House 3
The final holiday house I am reviewing is on the edge of town, so location isn’t great. Facilities are fantastic with a pool, spa and games room. It has an extra bathroom plus a huge amount of 5 star reviews.

Stage 4: Actions from Competitor Analysis

By examining your competitors’ strengths and weaknesses you can put strategies in place to overcome or counteract their strengths as well as work out ways you can take advantage of their weaknesses.

Weaknesses / Strengths

1. Location

This is a very important strategic decision when selecting your holiday house, unfortunately if you have got it wrong it is very hard to overcome. Perhaps offer push bikes so guests don’t have to drive everywhere. In Example 1. only one competitor has a better location.

2. Facilities

What facilities have your competitors got that you haven’t? Have you got room for a pool table in your Holiday house and also your budget? Will the extra facilities increase occupancy to help offset the extra costs? These questions need to be carefully thought through.

3. Yard

Can you make it more attractive by fully fencing it, making it pet friendly for future guests who want to travel with their four-legged friends?

4. Bathrooms

Again, this is another criteria that is important to analyse when selecting your holiday house, if all the competitors have 2 bathrooms. Its very important to select a house with at least 2 bathrooms or potential to add another one.

5. Reviews

90% of future guests read the reviews before booking, so its very important to get this right. Constant communication is key when dealing with guests, making sure they are happy at all times is key. Guest being able to get a hold of you if something goes wrong quickly will help stop the bad reviews.

6. Price

Price is a consideration but not the only one. Its important to be competitively priced but that doesn’t mean the cheapest. Example 1. shows House 3 being the farthest from the tourist town but isn’t the cheapest.

Step 5: Determine your holiday house’s competitive position and strategies to exploit

Competitive Position: For example, my holiday house is a 5 minute walk to the beach and shops, offers guests a range of facilities which includes lots of games for kids, a pool table and a library packed full of movies. We cater for pets with a fully enclosed yard, dog beds, bowls and toys.

Competitive Strategies: We will offer guests a complimentary breakfast plus a bottle of wine and when possible an early check in and late check out.

Final Thoughts

Its important to complete these reviews at least every 12 months as markets change and so do your competitors. It also helps you understand your weaknesses and strengths which is very important when trying to stand out in a very crowded market place.