Hotel Revenue Management – Market Segmentation

This video posted by Hotel Revenue Management

Market segmentation is a crucial concept in the field of hotel revenue management. It refers to the process of dividing a market into smaller groups of customers with similar needs or characteristics. This allows hotel revenue managers to tailor their pricing and marketing strategies to each segment, which can ultimately lead to increased revenue and profitability.

Hotel revenue managers use market segmentation to identify different customer groups and their unique needs and behaviors. These groups can be based on a variety of factors, such as age, income, travel purpose, geographic location, or even past booking behavior. Once these segments are identified, hotels can create specific packages and offers that are tailored to each group’s needs, leading to more targeted marketing campaigns and ultimately, increased revenue.

Market segmentation also allows hotels to identify and target niche markets. For example, a hotel located near a popular conference center may create a package tailored specifically to business travelers attending the conference. Similarly, a hotel located near a ski resort may offer a ski package for winter sports enthusiasts. By targeting these niche markets, hotels can differentiate themselves from their competitors and attract customers who may not have considered them before.