Why Segmentation is First Step to Creating More Personalized Guest Experience

Why Segmentation is First Step to Creating More Personalized Guest Experience

In a recent blog post, we discussed what hotels should do to accommodate business travellers’ needs and why that’s so important. But business travellers aren’t the only segment a hotel can identify and cater to.

NB: This is an article from Oaky

That’s why today we are taking a step back to look at how hotels can use segmentation to categorize guests depending on, for example, on how and when they booked, how long they are staying and whether they are travelling alone or with a partner.

Segmentation: one hotel, many guests, countless possibilities

A set of well-defined guest segment gives hotels several ways to capitalize on the different types of guests a hotel attracts, by making it easier for them to send the right offer to the right guest. For example, if you keep sending business guests irrelevant leisure offers or couples’ packages to a single person, they might feel undervalued or unappreciated. To avoid such a  faux-pas and make sure hotels send only relevant offers, they should strongly consider segmenting their guests.

Why? Understanding your guests’ background and their reason for booking gives you an idea of their needs and what they might be looking for during their stay with you. In short, it helps you identify guests’ behaviour and consumption trends.  This opens up the unique chance for a hotel to propose additional services and discount offers highly relevant to their guests. That way they can make their stay a memorable experience all while the hotel can generate incremental revenue through the increased conversion of upselling offers – we see this as a win-win situation.

Individualized offers have another advantage: they show guests that their needs have been considered by you and will most certainly make them feel appreciated. And since your guests can customize their stay exactly the way they want to, they’ll have a more memorable, enjoyable experience, be more likely to come back and spread positive word of mouth.

Ideas for refining basic segments

Most hoteliers are familiar with basic segments such as group vs. individual travellers, online vs. direct, business vs. leisure (or even Bleisure) or contracted vs. non-contracted rates. But it doesn’t stop there – hotels can further break down these segments if they see different behaviours represented within them.

Here are some ideas for how you can further divide basic segments:

  • Check-in day (weekday vs. weekend): for weekenders your special brunch deal might be interesting. Guests staying during the week might be keener on an offer for a fancy dinner which could help fill up your restaurant on slow days.
  • Length of stay (short vs. long): the longer guests stay, the more time they have to test the hotel’s facilities and the more likely they’d grab a combination package which could include airport transfers, meals, spa treatments and entertainment.
  • Single guests vs. couples: Send couples to 7th heaven with a romantic package or offer solo stays fun social activities to join.
  • Travelling with or without children: guests with kids might jump on the chance of a hassle-free airport transfer or child-friendly meals
  • Country of origin: Guests from some countries are known to book with a long lead time or to spend more money. Offer them exclusive services or special packages for added revenue.
  • Booking source (OTAs vs. direct bookings): if guests from a certain OTA usually fall into a particular segment, they are easier to target while direct bookers can be rewarded with extra advantages and discounts.

How hoteliers win the segmentation game

It’s not always easy to know which segment a guest falls in. And even when you’ve identified the various segments, sending targeted offers manually and keeping track of all the correspondence can be time-consuming and difficult, something a front office or a revenue manager should not be spending time on.

For example, Teleport Hotel introduced the option for long-stay guests to choose to receive a free pizza or beer in exchange for not having their room cleaned during their stay. This reduces the environmental impact due to reduced cleaning efforts and drastically cuts the hotel’s housekeeping costs.

Apex Hotels use segmentation to send personalized pre-arrival messages to their business guests and offer custom services that will make their stay simpler and smoother. Hotel van Heeckeren sends different deals to singles and couples so they each have appropriate offers to choose from. We could go on and on with examples, but you’ve probably understood our idea by now.

In an era where people expect personalised service, using a platform like Oaky puts the hotelier in total control of personalising the emails and deals each guest segment receives. The results of this personalization effort are higher conversion rates and boosted ancillary revenues for the hotel and of course a happy guest who appreciates the tailored service and shares the experience with friends and colleagues.

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