Your compset, traditionally known as a "competitive set," is simply your top set of competitors. It's substantially different to know what a compset is and to know what your compset is while backing it up with data. So, you have an idea of who they are, and surely you are right about some of them, if not most. However, there are a few out there that you might miss, and missing them could mean you are overlooking other opportunities as well.
Let's start with a thought experiment. Think of all your guests from the past year. Now think of all those who even considered staying with you but didn't, yet ended up staying in your destination. Where did they stay? Now imagine your business is a bucket. Your potential guests comprise the water filling your bucket, and each competitor is a hole in that bucket from which some of that water will leak out. If you can narrow down the 3-5 largest holes in your bucket, those competitors will be your competitive set.
Now that you have some idea of who they are, you need to investigate further, and it is imperative that you think within the larger picture. For example, the hostel down the street might not even make it into the top 10 on that list, but the one on the other side of town could be siphoning away your potential guests like a vacuum.
So here are 3 tips on how to do so.
[caption id="attachment_851" align="alignnone" width="1147"] These properties are what Booking.com calculated as Freehand Chicago's compset[/caption]
Interview your guests: Make it a standard check-in or check-out procedure to ask guests where they also considered staying and what influenced their decision. If that feels like too much, establish a routine for staff to interview 3 guests daily and perhaps fill in a Google form with the data you gather.
Do some research: Create profiles of your prototypical guests who contribute significantly to your revenue. If you want to be fancy, you can refer to these as your marketing cohorts (we'll talk more about them later). Now, pretend to be them and live through the customer journey.
Ask your OTA: You might be surprised at what your OTA buddy can offer if you just ask. You know that little box at the bottom of your booking.com page? That is your compset in their eyes based on their user analytics (see the image above for Freehand Chicago's compset on that site). Ask your account manager for more details and an explanation. What about the other OTAs? Well, ask them what they have. If enough people inquire, it might motivate them to create something. Remember, the OTAs should only be a part of your distribution; therefore, their results should only be part of the data you need.
Now that you actually have some data, you can narrow it down by sorting it to the top 3-5 repeating brands. Surprise! Surprise! You might find a hotel, Airbnb house, or even a hostel in a different neighborhood that is in your compset that you haven't considered before. Now, if you connect these competitors in your compset to a cohort you created, you can start digging into their selling points and marketing efforts—yes, you should follow them on social media and sign up for their emails. You can now use this data to either adjust your product (e.g., add a swimming pool, chill bar, daily events, and a kick-ass rooftop lounge) or change your marketing efforts to attract the right customers.
Is there a particular way you determined your compset? Help other hostel professionals by mentioning it in the comments below.