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How to Analyse the Competition in Your Tourist Area

The holiday rental market: Why intuition is no longer enough

The tourist accommodation sector has undergone an unprecedented transformation over the last decade. What began as a collaborative economy alternative has become one of the most competitive, professionalised and dynamic industries in the world. Nowadays, uploading a few attractive photos to a booking platform and waiting for guests to arrive is no longer a viable strategy. To maximise the profitability of a holiday home or a boutique hotel, it is essential to base every decision on real, proven data.

In this highly saturated ecosystem, success does not depend solely on the quality of your property, but on how your offer is positioned compared to the available options around you. This is where a systematic study of the environment becomes vitally important. Understanding the behaviour of other accommodations in your region allows you to anticipate trends, adjust your rates intelligently and detect business opportunities that others are overlooking.

Throughout this comprehensive guide, we will explore the methodologies, tools and strategies needed to carry out a deep local market study. You will learn to identify your true rivals, break down their pricing strategies and use that information to position your property at the top of the search results, improving both your occupancy rate and your net profit margin.

Strategic benefits of a rigorous competitor analysis

Devoting time and resources to studying the competitive environment is not a superfluous expense; it is an investment with a direct return on your bottom line. When you analyse what is happening around you in detail, you gain a series of crucial competitive advantages for your business's survival:

Optimisation of the pricing strategy (Revenue Management): You will stop setting static rates or those based on assumptions. By understanding how much the market charges on high-demand dates, weekends or low seasons, you can implement dynamic pricing policies that maximise your revenue per available room (RevPAR).
Identification of underserved market niches: By studying the local offer, you might discover that no accommodation in your area accepts pets, or that none has a suitable space for remote working. Adapting your property to cover these gaps will allow you to attract a steady flow of customers willing to pay extra.
Improvement of the unique selling proposition (USP): Knowing your rivals' weak points gives you the key to standing out. If your competitors' reviews constantly complain about a slow check-in process, you can highlight your speed and efficiency by offering a modern automated check-in system.
Optimisation of the marketing budget: Knowing where your competitors advertise and what type of audience they attract will help you focus your promotional efforts on the most profitable channels, avoiding wasting resources on ineffective campaigns.

How to define your true competitors in the tourism sector

One of the most common mistakes when analysing the environment is considering any accommodation in the same city as a competitor. This can seriously distort your data. An effective market study requires precise segmentation to identify who is actually competing for the same customer profile as you.

Direct competitors: Your mirror in the market

Direct competitors are those accommodations that offer a product with very similar characteristics to yours, aimed at the same type of audience and located in your same area of influence. If a traveller is hesitating between booking your property or the one next door, that second option is your direct competitor.

To classify an accommodation as a direct competitor, it must meet most of the following criteria:

Identical or very close geographical location: They must be in the same neighbourhood, district or at a similar distance from the main tourist attractions (beaches, monuments, convention centres).
Similar capacity and layout: If you manage a one-bedroom apartment ideal for couples, a villa sleeping ten people is not your direct competitor, even if it is across the road. Your direct competition will be other apartments for two people.
Level of services and standard: A luxury holiday apartment with a heated pool and designer finishes does not compete with a basic budget studio, even if both have the same capacity.

Indirect competitors: Your ideal guest's alternatives

Indirect competitors are those that, while offering a different type of accommodation, satisfy the same lodging need in your geographical area. Even if they do not share your exact physical characteristics, they can still take customers away from you if your offer is not attractive enough.

Some examples of indirect competitors include:

Boutique hotels and hostels: For a solo traveller or a couple, a hotel room with services included can be a real alternative to an independent holiday apartment.
Larger or smaller accommodations: In times of crisis or changing trends, small groups of travellers might choose to rent a large house together instead of booking several individual apartments, or vice versa.
Adjoining tourist areas: If your property is in a secondary coastal town, accommodations in the neighbouring town (which is more famous or has better connections) act as indirect competitors by capturing demand before it reaches your area.

Key criteria for filtering the competition

To create a truly useful list of competitors (known in the sector as a "Competitive Set" or Compset), we recommend selecting between 5 and 10 properties that share at least three of these variables with you:

Number of allowed guests: Maximum capacity is the main search filter for users on platforms like Airbnb or Booking.com.
Key amenities: Features such as a swimming pool, jacuzzi, air conditioning, private parking or high-speed internet connection heavily segment demand.
Pet and child policy: Pet-friendly or family-friendly accommodations compete in very specific leagues.
Average user rating: Try to compare yourself with properties that have a similar or slightly higher reputation than yours to set a demanding yet realistic standard of quality.

Fundamental variables to audit your rivals

Once you have selected the members of your Compset, it is time to delve deeper into their operations. To carry out an analysis that provides real value, you must constantly collect and evaluate a series of critical variables.

Pricing structure and dynamic rates

Price is one of the most decisive conversion factors in the tourism sector. It is not enough to know how much your competition is charging today; you need to understand how their price varies over time. Investigate the following aspects:

Average Daily Rate (ADR): Calculate the average price per night charged by your competitors in different seasons (high, mid and low).
Minimum stay required: Analyse whether they require a minimum number of nights to book during weekends, bank holidays or festive periods. This will allow you to detect if there is a gap to capture shorter-term, last-minute bookings.
Additional charges: Look at whether they charge extra for cleaning, additional guests, pets or late check-in. Often, a low base price hides high additional fees, which influences the customer's perception of value.

Occupancy calendars and booking windows

Observing how quickly your competitors' calendars fill up will give you highly valuable information about the health of demand in your area:

Booking Window: How far in advance do guests usually book in your area? If you notice that your competitors fill up three months in advance, your prices may be too high if your calendar is still empty, or too low if you fill up immediately.
Estimated occupancy rate: Although platforms hide days blocked by the host, constant monitoring will allow you to estimate what percentage of actual nights they manage to sell each month.

Customer experience and review analysis

The opinions of your competitors' guests are a goldmine of free information. Analysing what customers love and hate about your rivals will allow you to adjust your own offer to exceed their expectations.

Spend time reading the reviews of your Compset properties and classify the comments into two categories:

Recurring strengths: What do guests praise the most? (for example: the comfort of the beds, the host's quick response time, impeccable cleanliness). These elements represent the minimum standard that you must also meet or exceed.
Frequent weaknesses and complaints (Pain Points): What do they usually complain about? (for example: street noise, lack of kitchen utensils, worn sheets, complex check-in processes). Every complaint about a competitor is an opportunity for you to promote that feature as a strong point of your accommodation.

Digital presence and distribution channels

Where do guests find your competitors? Analysing their distribution strategy will help you understand if you rely too heavily on a single platform or if you are losing visibility on key channels:

Channel mix: Find out if your rivals are only present on Airbnb, or if they also use Booking.com, VRBO, Expedia or have their own direct sales website.
Listing quality: Evaluate the quality of their photographs, the tone of their descriptions and whether they use SEO techniques for booking platforms (keywords in the title, detailed description of services, etc.).
Social media: Analyse whether they have active profiles on Instagram, Facebook or TikTok, what type of content they publish and how they interact with their community to generate direct bookings without paying commissions to intermediaries.

Technological tools to analyse your local market

Carrying out all this work manually can be overwhelming and consume a huge amount of time. Fortunately, modern technology provides us with advanced data analysis tools that automate much of the process, allowing you to make decisions based on real-time data.

Manual analysis on booking platforms (OTAs)

Before investing in paid software, you can obtain a large amount of information by conducting incognito searches on major OTAs (Online Travel Agencies) like Airbnb and Booking.com. Pretend you are a guest looking for accommodation on your key dates, apply the filters that correspond to your property and analyse which options appear in the top positions. This will give you a clear idea of your competitors' organic visibility and how they present themselves to the final customer.

Data intelligence software (Business Intelligence)

For those owners who want to take their analysis to the next level, there are platforms specialised in collecting and analysing data from the tourism sector:

AirDNA: This is the benchmark tool for analysing Airbnb and VRBO data. It allows you to find out the average occupancy, revenue generated and daily rates of any tourist area in the world, as well as create a custom Compset to monitor your direct rivals. You can find more details on their official website: AirDNA.
PriceLabs / Wheelhouse: These dynamic pricing tools constantly analyse the local market, seasonality, special events and competitor behaviour to automatically adjust your rates in real time, maximising your income without you having to intervene manually. More information at: PriceLabs.
Transparent: A platform aimed at medium and large property managers that offers extremely detailed data analysis on the holiday rental supply globally and locally.

The importance of centralising your operations

All the information obtained through competitor analysis is useless if you are unable to apply it quickly and accurately to your own business. When you decide to adjust your rates or modify your minimum stay policies to adapt to the market, you need those changes to be reflected immediately across all your sales channels to avoid costly overbookings.

To achieve this, it is essential to have an integrated management system that allows you to automate booking synchronisation in real time between Airbnb, Booking.com, VRBO and your own direct booking engine. In this way, any price or availability change based on your competitive analysis will propagate instantly throughout your distribution network, allowing you to react quickly to your rivals' movements.

Step-by-step guide to carrying out your tourism market study

Now that you know the variables and tools, it is time to structure a clear and repeatable workflow. We propose a simple four-step methodology to carry out your analysis periodically:

Step 1: Define the geographical area of influence

Tourist behaviour can vary drastically from one street to another, especially in large cities or highly dense coastal destinations. Define a realistic radius of action for your analysis. In urban environments, this radius should not exceed 500 metres or one kilometre. In rural or mountain areas, where a car is essential, you can expand the analysis radius to 10 or 15 kilometres, provided that the accommodations share the same tourist attractions.

Step 2: Create a competitor matrix (Benchmark)

Create a spreadsheet (in Excel or Google Sheets) where you record the key data of your top 5 direct competitors. Structure the information in columns to facilitate visual comparison:

Name / Link	Capacity	Average Rate (Low)	Average Rate (High)	Review Score	Strengths	Weaknesses
Apartamento Sol y Mar	4 guests	€75 / night	€150 / night	4.8 / 5	Location, large terrace	No lift, complex check-in
Estudio Centro Histórico	2 guests	€60 / night	€110 / night	4.5 / 5	Modern decor	Night noise, no parking

Update this matrix at least once a month, paying special attention to the price changes they make ahead of upcoming seasons or major events in your area.

Step 3: Identify weaknesses in their operations

One of the biggest mistakes made by accommodation managers is focusing solely on price, neglecting the operational quality of the service. By analysing negative reviews of your competitors, you will discover that most guest issues are related to poor cleaning, poor maintenance of facilities or a lack of communication.

To ensure that your accommodation does not make the same mistakes as your competitors and offers an impeccable standard of quality, it is very useful to implement internal management tools such as control forms. These digitalised checklists guarantee that your cleaning and maintenance team thoroughly inspects every corner of the property before a new guest arrives, ensuring that everything works perfectly and eliminating the complaints that usually penalise your rivals on review platforms.

Step 4: Adjust your value proposition and pricing strategy

With all the data on the table, it is time to make strategic decisions. If you discover that your direct competitors are charging an average of €120 per night in high season but have a low cleanliness score, you can set your rate at €130 and highlight in your title and description that you offer certified professional cleaning and an impeccable welcome service. Guests are more than willing to pay a slight premium if they are guaranteed a superior experience.

Practical strategies to outperform the competition in your area

Having analysed your competitors gives you the knowledge; now you must apply that knowledge creatively to outperform them in visibility and bookings. Here are three proven strategies to stand out in your local market:

Optimising SEO positioning on booking platforms

The algorithms of Airbnb and Booking.com reward accommodations that offer an excellent user experience and maintain a high conversion rate. To improve your positioning against your rivals:

Use descriptive and conversion-oriented titles: Instead of "Bright apartment in the centre", use titles that highlight your analysed competitive advantages, such as "Penthouse with private terrace and free parking - Historic Centre".
Respond quickly to enquiries: Response time is a key factor for search algorithms. Maintaining a response time of under an hour will dramatically increase your organic visibility.
Keep your rates updated: Platforms detect when an owner frequently adjusts their prices to adapt to the market and reward them with a better position in search results.

Offering additional services and local experiences

Many travellers are no longer just looking for a place to sleep, but a complete experience. If your competitors limit themselves to handing over the keys, you can go one step further to win their loyalty and secure five-star reviews:

Personalised local guides: Create a digital guide with your favourite restaurants, lesser-known hiking trails or tips to avoid local tourist traps.
Welcome details: A small gift of local products (a bottle of regional wine, traditional sweets or fresh fruit) creates a very positive emotional impact from the very first minute of the stay.
Partnerships with local businesses: Collaborate with bicycle rental companies, tour guides or local restaurants to offer exclusive discounts to your guests. This not only improves their experience but can also generate additional income for you through referral commissions.

Professionalisation and automation of lodging

The difference between an amateur host and a professional manager lies in the consistency of the service. Automating repetitive processes not only reduces your workload but also eliminates human error, ensuring that every guest receives exactly the same level of excellent care.

From automating welcome messages and arrival instructions to the digital management of cleaning tasks, technology allows you to scale your lodging business without losing the personal touch that travellers value so much. By freeing up time from daily administrative tasks, you can focus on what really matters: analysing the market, refining your pricing strategy and seeking new growth opportunities for your property portfolio.

Conclusion: Convert your competitor data into direct bookings

Competitor analysis in your tourist area is not a one-off event, but a continuous process of learning and adaptation. Tourism markets are dynamic: new accommodations open, traveller preferences shift, global economies fluctuate and new local regulations emerge. Those owners and managers who stay attentive to these changes and use data to guide their operational and commercial decisions will be the ones who thrive in the long term.

Do not see your competitors as a threat, but as a valuable source of free learning. Observe their successes for inspiration and analyse their mistakes to avoid them in your own business. With the right tools, a solid pricing strategy and an unwavering focus on operational excellence, you will be perfectly equipped to lead the tourism market in your area and transform every piece of analysed data into a confirmed booking on your calendar.