Every hotelier talks about personalization, but few actually deliver it. Guests book when they feel understood \u2014 and that starts long before they walk through the door.<\/p>\n\n\n
The more you know about your guests, the better you can reach them, win the booking, and meet their needs on-site. That knowledge comes from market segmentation.<\/p>\n
In this article, we\u2019ll break down what segmentation is, why it matters, and how to use it to grow a stronger, more profitable hotel business.<\/p>\n\n
Hotel market segmentation is the process of grouping hotel guests into categories based on shared behavior and characteristics.<\/strong> It is a fundamental process of revenue management, but it also brings benefits to marketing, operations, and the guest experience.<\/p>\n When lodging operators divide guests into segments, they can be more targeted in promotions, communications, and guest services to increase revenue, guest loyalty, and guest satisfaction. <\/div>\n\n \n\n\n Market segments can vary by property type, but typically, they fall into five main categories in the hotel industry:<\/p>\n These guests are individuals traveling for business or leisure. They typically reserve directly with the hotel or through an online travel agency (OTA)<\/a> or travel agent at non-negotiated rates. Some hotels break down transient business into subgroups such as OTAs, direct bookings, packages, and consortia.\u00a0<\/p>\n Examples include: backpackers, families, and digital nomads.<\/p>\n These guests are business travelers who work for a company that has a negotiated account with the property. Corporate agreements are typically arranged through the hotel\u2019s sales department and require the company to commit to a minimum number of room nights per year in exchange for discounted rates and other benefits.<\/p>\n Examples include: corporate businesses like Amazon, Microsoft, or IBM.<\/p>\n These guests travel with a group that has reserved a block of rooms in advance at a special group rate. Typically, a group consists of at least six to ten rooms per night, but that can vary by property. Larger properties may break down group business<\/a> into sub-group segments such as corporate, incentive, and SMERF (which stands for social, military, education, religious, and fraternal).<\/p>\n Examples include: school groups, retiree tour groups, and sports teams.<\/p>\n5 common hotel market segments (+ examples of each)<\/h2>\n
1. Transient<\/h3>\n
2. Corporate negotiated<\/h3>\n
3. Group<\/h3>\n
4. Wholesale<\/h3>\n