At Dawning Digital, we focus on serving instead of interrupting. Our belief is that the best marketing is service-oriented and that when you give people what they need when they need it, it’s not advertising (at least not the negative type of advertising that we see time and time again).
To understand how to serve and attract travelers, we first need to understand travelers themselves. However, the travel market today is far too large to generalize. We have business travelers, we have leisure travelers, we have millennials, we have Gen X’ers and more… and each of these segments behaves differently.
For example, millennials don’t consider loyalty programmes as much as Gen X’ers do, and they are more likely to base their decision off of the experience offered.
In order to successfully serve, attract and delight customers and efficiently allocate marketing and growth budgets, the tourism industry needs to understand who they are attracting, how to reach them, and how to best serve them by segmenting the market.
Tourism Market Segmentation
We don’t want to get too technical with you so let’s define what market segmentation is.
Market segmentation: “The process of defining and subdividing a large homogenous market into clearly identifiable segments having similar needs, wants, or demand characteristics. Its objective is to design a marketing mix that precisely matches the expectations of customers in the targeted segment.” – Business Dictionary
To put it into simpler terms – you wouldn’t put your great aunt Sally and your little cousin Tracy into the same category, would you? Would you consider that you can generalize for an entire population? There are budget travelers and luxury travels, and there are people who plan a year in advance and people who wing it.
Every traveler is different – they enjoy different types of hotels, they prefer different activities, they make use of their time differently, they look for and enjoy different things. By understanding that tourists are different, travel marketers are able to cater to these different segments or different types of people.
Types of Market Segmentation
There are several different ways to segment the travel market. The most used include: geographics, demographics, psychographics and behavioral.
Importance of Market Segmentation
You may be wondering, “why do I need to segment my audience?” As aunt Sally always said, “you can’t please everyone”. It’s true in any industry – you can’t shine if you try to please everyone. However, if you cater strongly to one group, you can certainly become the star of the show.
Think of it this way – you could try to cater to both leisure and adventure travelers in one hotel – but how would you ever stand out in either space? We’ve said this about branding before – but it’s better to choose a unique ice cream flavor than to make your business too vanilla. If you cater to everyone, you’ll be sort of liked by everyone… But if you cater to a specific group and do it WELL, you can become the leader in that space and earn loyal fans who become promoters.
How segmenting helps your business
By segmenting and serving a specific group, your business can earn a competitive advantage by allocating resources more effectively.
1. Reduce competition: instead of competing with every other hotel out there, you’re competing with those in your niche.
2. Ability to improve: you can focus your efforts on the needs of one market segment, instead of all segments. For example – adding more adventure options rather than splitting the budget between adventure and leisure facilities
3. Target marketing messages: promote your business as a leisurely resort with all of the spas and relaxation activities, rather than as a resort that caters to all.
4. Focus on the right marketing channels: this allows you to focus your marketing and PR efforts within one market segment, rather than all. For example, partnering with mommy bloggers for a family oriented resort.
5. Increase satisfaction: when you cater to a specific type of traveler, you are able to ensure you are providing an amazing experience as you know what they came for. Good experiences = customer satisfaction, better reviews, loyalty, and free PR!
Market Segmentation Process
Now that you’ve seen the benefits of segmenting your market, let’s talk about how to do it.
Your segment should be:
Easily identifiable – it’s easy to tell budget travelers apart from luxury travelers.
Reachable – you should be able to advertise to and connect with these segments – for example, you know that surfers read surfing magazines and go on tide check websites.
In line with the destination’s strengths – consider what your destination has to offer, and develop segments.
Sizeable – the segment shouldn’t be too large or too small.
Types of segmentation in the travel industry:
Country of origin: this may not be the most sophisticated method as you have to generalize for an entire population, however, it does provide certain benefits. For example, you may cusotmize your marketing efforts by language, imagery, and platforms.
Age: market segmentation by age is among the most common types of segmentation. This allows you to customize your marketing message, style, and platforms used.
Life stage: life stage is similar to age, in fact, it’s an alternative to age-based segmentation. 25-year-old Samantha may be a single female traveler, while 25-year-old Anna may already have two children. While they may be of the same age, they are in completely different life stages and thus have quite different preferences.
Gender: male or female oriented
Spending habits: high end or low end.
Travel motive: This is the reason why people travel… the “why”. Everyone’s “why” is different. These travel motives can be divided into leisure, adventure, cultural, ecological, health and more (depending on the nature of the destination).
Once you have segmented your markets, it’s time to define who you want to target.
Not sure where to start? Think about your guests – who had the best experience at your location? Who left raving reviews? Who inquires the most? Which guests had a negative experience? Who left a bad review?
Now think about why. This will help you understand who your business best serves, Next, think about your future and your goals – how do you want your business to grow and evolve? Is that vision in line with your current results?
It will take time, thought, effort and data analysis, but once you’re clear on the market segments you’d like to cater to, you will be able to focus both your growth and marketing efforts in order to stand out, grow your business, increase customer satisfaction and ROI.
The next step? Work on your Inbound Marketing Strategy or check out our Ultimate Hotel Marketing Strategy Guide!
Download our free hotel marketing guide below!