Purpose – This study has a twofold purpose: to identify the competitive strategies and advantages of hotels located in the province of Alicante (Spain); and to inform hotel managers about how some key strategic variables (size, type of hotel management, category and competitive advantage) impact on hotel performance. Design/methodology approach – A study of the population was carried out using a questionnaire addressed to hotel managers. A principal components factor analysis was performed to identify business strategies. In addition, hotels were grouped together according to the key strategic variables and the degree of development of the different business strategies implemented. Findings – A comparative study of the performance levels achieved by each strategic group was carried out for the purpose of checking whether any of them produced significantly higher performance levels. In the light of the results, if hotels are to achieve higher performance levels, they should preferably be medium or large sized, belong to a chain, increase their category and base their competitive strategy on improvement and dimension. Practical implications – Strategic groups simplify the complex strategic reality in which hotel managers develop their professional activity. Thanks to the creation of these groups, managers acquire an aggregate knowledge of the business strategies and advantages of the hotels operating around their establishments and can equally be aware of the performance levels reached in each group analysed. This information also allows hotel managers to identify the strategic variables which must be developed to avoid being left behind inside their group in competitive terms or to join a different group which they may eventually consider more interesting in terms of strategy or performance. Originality/value – This study provides a method to identify strategies and competitive advantages within the hotel industry and additionally suggests strategic actions for hotel managers to improve firm performance.
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