The two common approaches used to determine appropriate competitive set or cluster for a hotel are:

Question

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ADR and Product Type are the best choices to determine appropriate competitive set or cluster for a hotel because these two factors take into consideration the level of luxury and amenities offered by different types of hotels which directly affects a hotel's price positioning and target market. A hotel's competitive set should include hotels that offer similar product types and cater to similar customer segments, in addition to having similar ADRs.

The Two Common Approaches Used to Determine Appropriate Competitive Set