Hospitality Tip Of The Day(19.)
#hospitalitytipoftheday
What is Hotel Market Segmentation?
Market segmentation involves analyzing the target markets for the hotel industry and segmenting them based on the pricing sensitivity and booking behaviors. Market segmentation in the hotel industry helps identify the reason for a drop in the bookings. Based on the nature of the downturn, unique Sales and Marketing efforts are applied to increase bookings, hence the revenue. There are 5 market segments:
1.Transient – These are the guests who are not linked to any group or company. They are the ones that make individual bookings at your Best Available Rate (BAR) or publically available dynamic charges.
2.Corporate – These are the guests that stay at the hotel at discounted company rates. The discounted rates are available on a contract basis to corporate clients who bring in frequent business.
3.Group –This segment of the guests stays at your hotel under contracted rates for a large group or for an event. The rates are flexible depending on the requirements.
4.Wholesale –Rooms under this segment are available at discounted rates to tour operators or booking agents on buying bulk tickets.
5.Other – This segment consists of different categories such as complimentary rates, industry rates, rates available to the staff, etc.
Channel Segmentation
Once you define market segments, you must identify channel segments based on how you receive bookings. Doing this, you will be able to ensure that your hotel revenue management strategy is optimized to generate maximum revenue. But before we discuss how, let’s look at various channels.
1.Direct –This segment consists of direct bookings with the hotel done over phone calls or emails.
2.Website –Under this segment, secure reservations are made through a hotel reservation system on the hotel’s website.
3.OTAs – OTAs are online third-party travel agencies that allow people to make reservations for various hotels through their platform. For example, Trivago, TripAdvisor, etc.
4.GDS – GDS or global distribution system is a large network that acts as a conduit between hotels and travel sites.