The use of branding has permitted market segmentation and financial and organizational growth for hotel operators. This type of marketing’s primary goal is to increase value for the organisation and the customer, resulting in better service as it is adjusted to the consumer expectations and needs.
Branding is responsible for providing certainty, leading to boost customer loyalty and outstanding customer choice.
Unfortunately, branding and market segmentation might be challenging for those organizations with inadequate resources. Smaller operators find it extremely hard to compete against larger competitors without proper branding strategies.
The modern hotel industry is competitive, and it’s crucial to implement market segmentation, conceptualisation, and reposition strategies to grow.
Hotels must pay close attention to consumer power and redefine its supply chain model. The ultimate goal is to provide guest satisfaction to increase brand value and strengthen customer loyalty.
Keep in mind that it is impossible to discuss marketing and branding without organisation and brand principles. It should be a response to improve the entire customer experience for commercial success.
Market segmentation demands determining the hotel industry’s target markets and segmenting them supported on the price and booking actions.
It’s essential to establish market segmentation in the hotel industry to identify the logic behind a drop in the bookings. Once you have this information, you can apply a sales and marketing strategy to increase booking and revenue.
The primary goal of market segmentation is to help you identify the patterns of your business, such as:
- The extent of stay
- Busiest days of the week
- Percentage of Cancellation
- Busiest booking time
- Total revenue per customer
- Total revenue per room
When you divide your hotel’s business into categories, your sales team can identify each segment’s behavior. This information will allow you to know who books, what kind of rates they book, and their booking behavior.
Some of the most common market segments in the hotel industry are:
- Corporate – These are the people that book at discounted company rates.
- Individual – Usually are guests that are not associated with any group or company. These individuals are looking at your Best Available Rate (BAR).
- Wholesale – Rates available to tour operators or booking agents. This segment usually receives discounted rates for buying bulk reservations.
- Group – These guests are part of a larger group or for an event, and the available rates are flexible.
There are other market segments, such as rates for staff members, industry rates, complimentary rates, etc.
It’s vital to understand that technology and changing consumer behavior is challenging the hotel industry. The COVID-19 situation has expedited the new trends as hotel managers have to move away from a hotel’s definition as a place to sleep and eat.
The truth is that the value proposition of a hotel needs to be transformed. It doesn’t matter if you are managing a small property or a hotel portfolio; it’s vital to develop a hotel concept.
Implementing a hotel concept has many benefits, including:
- Adjust the shared vision
- A systematic and irresistible guest experience
- A reduction in marketing costs and Public Relations since it is easier to promote a concept hotel
- An opportunity for investors and partners when offering the project
- Better room rates and extras
Types Of Accommodation In The Hotel Industry
It’s essential to understand that the hotel industry relates to guest accommodation. There are different accommodation types. The most important are:
- Hotels – It is the most common type, and it refers to a place that provides overnight accommodation, meals, and other services.
- Motels – This type is usually preferred by motorists as they are often located on the roadside. Motels offer free parking.
- Inns – It is an establishment that provides temporary accommodation, and sometimes it offers food and drinks. The Inns are smaller than hotels and offer fewer amenities.
- Bed and Breakfasts – B&Bs are smaller than hotels and inns, and they offer private rooms along with breakfast in the morning.
- Resorts – This type of establishment is similar to a hotel, but they offer various additional services and amenities. Guests have access to recreational activities, restaurants, bars, lodgings, etc.
- Hostels – This type of accommodation is usually budget-friendly, and it offers bedrooms or apartments. Some hostels also have a bar and restaurant. Sometimes shared bathrooms are available.
In the hotel industry, it is challenging to have a unique proposal that attracts customers’ attention to be profitable. Hotel owners must choose a concept in which they want to specialize and, from there, create the most appropriate concept that strengthens the idea.
It’s crucial to understand that reposition goes beyond physical renovation for a property. Hotel managers must have a comprehensive plan for obtaining financial, operation, and market growth.
Hotel managers should measure the implemented strategies’ effectiveness to confirm employees’ and guests’ overall satisfaction.
You need to align with the current market to build strong brand relationships to satisfy your clients’ needs for today and tomorrow. Methods such as analysis of trends, conceptualization, daily performance, and competitive market performance are key to provide a marvelous customer experience.