Hotel Marketing Tips Suite: Managing Demand Through Segmentation

For hotel revenue experts understanding the when, where and how of market segments is biblical marketing fodder these days. Getting back to the basics is fundamental to meeting the customer half way. A recent ESSEC Business School Hospitality Management MBA Bootcamp spawned a series of discussions and expert analysis. The following variant from Snap Shot Hotel Brand Management reveals most of the key talking points.

To understand segmentation we first need to get back to hospitality marketing basics. Doing so, we are confronted by the obvious question; “Why do we segment our markets in the first place?” The answer is fairly evident, in that different people have different needs, and are willing to pay differently, according to those needs. Consequently, by properly segmenting potential customers, we can take a different marketing, pricing and demand generation approach to optimize each market.

As aptly stated by Warren Buffet,

“Price is what you pay. Value is what you get.”

Breaking it down, the traditional approach to segmentation is similar to this:

Business travelers are willing to pay more, if they can get certain needs met. These clients will probably want such values as speed of check-in/check-out, excellent bedding, working space, silence, room service and other business oriented offerings.

Whereas a business guest may need and want such particulars, a single leisure traveler is probably willing to give up some of these facilities, to get a cheaper rate. Similarly, families need more space and safe space for the kids, and so on. Also, family oriented travelers may not want to be situated too near business travelers for fear of disturbing them. The list of examples could go on.

The essence of our discussion is shown in what value we can give our guests in order to suit their needs and wants. In so doing, hoteliers can optimize the price and thus return the best experience for said price. Last, but not least, do not forget that, in hospitality, experience is what drives it all.

Be advised however, there is a lot more to segmenting than just breaking down the classic guest types.
by Liliana Dumitru-Steffens Source: argophilia.com