Grouping customers by behaviour or booking channel.
¿What is Market Segmentation?
In hospitality, market segmentation is the process of dividing potential customers into groups with similar characteristics, needs, or behaviours. Segments can be based on trip purpose (business, leisure, MICE), booking channel, geography, rate, or customer type.
Importance
It enables more effective pricing, marketing, and distribution strategies, optimising revenue and occupancy.
Disambiguation
- Rate Fencing: focuses on setting conditions and restrictions for rates, while market segmentation classifies customers.
- Channel Mix: segmentation analyses who the customers are, channel mix analyses how they book.
Market Segmentation Example
A hotel may have a “corporate” segment booking directly and an “international leisure” segment arriving via OTAs.
👉 Not all guests are looking for the same thing, right? In other words: it’s like putting your guests into “drawers” so you can better understand what each one needs and how to sell to them more effectively.
