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 (on time and money)
How many people travel, what is their average income? How do they spend their income on average? What are the consumers' 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 alternatives).
If consumers decide to spend their money on leisure, 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 competitor. 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, there is approx. ten other hotels, which the Bergman's consider to be (direct) competitors.
Of course there is other theories on competition, like Porter's 5 Forces or check Seven favorite frameworks.
In the Game there is two competitions, between the participating teams.
Cooperation
As the normal economic competition rules apply, hotels are not allowed to work too close together on prices with competitors: making price-covenants with competitors is forbidden and illegal. It is considered important that customers have a free choice and that there is serious competition. Creating an organization which covers the interests of several hotels or of all of the hotels (for instance, in a promotion) is a normal thing, and not done yet in the city. This could be a DMO. Any serious cooperation could bring advantages to the partners if there was a serious ground (an agreement) and described obligations and advantages for all parties: it will also bring 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). If problems arise, you could accuse another hotel of an illegal act, or for that matter, get accused. You could get a fine related to (for instance) legal issues or, for that matter, also bonuses.
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