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The Hotelier’s Quick Guide to Hotel Marketing Segmentation

Knowing who your guests are and why they travel is key to maximizing revenue with hotel marketing segmentation.

Is your hotel or brand using hotel marketing segmentation to maximize revenue? If not, creating a hotel marketing segmentation strategy is in order.

Hotel marketing segmentation groups hotel guests into different categories based on past booking patterns and reasons for travel, according to marketing and event management company Cvent.

“By segmenting hotel guests into market groups, hoteliers are able to identify where their business is coming from, spot new business in the area and drive hotel revenue,” says Cvent.

Hotel marketing segmentation is more than just a good idea. It’s a key component of a hotel’s marketing management strategy, according to Oaky, a provider of hotel upselling automation.

“The purpose of using hotel market segmentation lies in catering to each guest’s needs better and maximizing revenue through personalized experiences,” says Oaky.

Types of hotel guest segmentation

Once you collect information from your hotel guests, you can get a better idea of what type of traveler they are and their preferences. For example, business travelers have a different set of preferences and daily habits than a family enjoying a vacation.

“Unlike a cookie-cutter approach to your pricing, hotel segmentation also enables you to play it smart and maximize hotel revenue by providing different services at varied prices to different consumer groups, says Oaky.

“For example, you can apply guest segmentation to your hotel room inventory and upselling management.”

Below are eight hotel guest segmentation and categories to track to identify guest preferences, booking trends and travel habits and tips for implementing hotel marketing segmentation.

1. Transient travelers

Transient travelers typically book at non-group and non-negotiated rates, says Cvent:

“Transient travelers typically book short stays within a relatively small booking window, and they may be traveling for business or leisure purposes. They may book a few days in advance, be walk-in guests, or book same-day online reservations.”

2. Corporate rates (CNRs)

Business traveler guests often book at special rates agreed upon by the hotel and corporate travel planners.

3. Local negotiated rates

These business traveler rates are from agreements with local businesses and the hotel sales, reservations or revenue manager. “Local businesses may require hotel accommodations for annual meetings, conferences, audits, union negotiations, expansions or other business activities that include out-of-town visitors,” says Cvent.

4. Group rates

Hotels may block off a large number of rooms at a discounted rate for conventions, weddings, sports events and more.

5. Discount rates

Many travelers prefer discount rates offered by AARP, AAA, credit card rewards, certain types of traveler programs, last-minute sales, holiday packages and online promotions.

6. Wholesale bulk rates

“Many large hotels offer bulk room blocks to tour operators or entertainment booking agents who require a significant number of hotel rooms at a discounted rate,” says Cvent. “A market segment that falls into the group business category, wholesale business includes tours, symphonies, traveling musicals, bands, and production crews.


The SMERF segment represents social, military, educational, religious and fraternal travelers. “Spiritual groups, college fraternities, educational conference attendees, and class reunions are SMERF groups hotels frequently encounter,” says Cvent.

8. Other

This category may include employee discount rates, complimentary rooms or rates or special rates for certain industries.

How to use hotel segmentation marketing

With hotel segmentation, your hotel’s travel and guest data you have must be accurate, says Cvent, which recommends using a high-quality revenue management system to ensure that your business intelligence is accurate and up-to-date.

Also make sure your rate plan analysis is up-to-date and your revenue reporting is comprehensive.

Here are more tips from Cvent for successful hotel segmentation marketing.

Know your guests

“Identify the types of hotel guests who regularly visit your hotel, noting their booking patterns, stay preferences, rate flexibility, and other important details,” says Cvent. These include:

  • Length of stay patterns
  • Preference for weekday vs weekend business
  • Booking lead time
  • Price sensitivity
  • Cancellation percentages
  • No-show ratios

Analyze booking channels

Hotel booking channels include:

  • Walk-ins
  • Direct call
  • Brand website
  • Online travel agents
  • Global reservation system
  • Metasearch
  • Retail travel agents
  • Voice reservations

Maximize rate level utilization

When management knows and understands your hotel’s market segments, your rate level management becomes more sophisticated, says Cvent:

“By understanding different rate plans and the nuances of rate level utilization, hotel revenue managers can maximize profits by limiting low-ADR rate plans, capping discounts, or applying selected blackout dates to specific rate plans or booking channels.”