luxury guest cars outside a hotel

The growing popularity of luxury hotels globally is being driven by factors such as increasing consumer awareness, affluence, and changing lifestyles.

NB: This is an article from ARO Digital

It is aided by a rise in web-driven branding and promotional activities.

Luxury hoteliers are focusing on these activities to raise awareness and gain better market share.

Other hotels are focusing on upgrading their services in order to meet potential luxury guests’ demands.

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Many consumers, who might not have previously considered the luxury hotel demographic, now have the income and inclination to spend their leisure time in this sector.

Hectic daily lifestyles fuel the desire for a complete break, maybe for a shorter period but with more attention to their needs.


Any hotel target market is a group of travelers who share similar wants and needs and will respond to certain marketing messages.

The luxury market is simply a subgroup of the overall market with similar behaviours and desires. 

The key for the hotel then is that they are able to control how to sell to that market. This applies to all departments whether it’s rooms, F&B, leisure or weddings & events. Even for the luxury traveller, it is still vital to know why they are travelling and what their booking behaviour is.


Hotel market segmentation means dividing potential guests into groups based on a set of common characteristics. 
General market strategies point to four different groups:

  • Geographic. Targeting specific guest groups according to their geographic locations 
  • Demographic. This group includes gender, lifecycle stage, age, income and social class. Also for example business or leisure guest.
  • Psychographic. How a person thinks, feels, and behaves using personality, lifestyle and values as segmenting variables 
  • Benefit-oriented. The experiences guests aim to obtain using services offered by the hotel


Understanding market sectors is essential to successful hotel revenue management.

Even if your hotel’s daily rate and facilities already attract a higher income demographic, you will drive further benefit through a more specific segmentation.

And the more specific it is, the easier you will find it to influence the segment in terms of booking behaviour (moving them to direct booking), increasing your room rate and cross-selling/upselling.

As a luxury hotelier, when you find your groups of guests who drive potentially higher revenue and profit:

  • You can invest in highly valued features and upgrades which you already know guests will be interested in. 
  • You will attract more guests in the right sectors and increase per customer revenue. 
  • Your marketing and sales efforts will be more profitable and easier to measure. 
  • You’ll be able to attract specific guests, and maintain and create brand loyalty. 

Read rest of the article at ARO Digital