Principles of the Hospitality
Industry
Introduction to Hospitality
Management BHM/DHM
101
UNIT 09: TYPES OF HOTEL GUESTS
Presentation Outline
• 9.1 Objective
• 9.2 Introduction
• 9.3 Market Segmentation
• 9.4 Group Market
• 9.4.1 Corporate market
• 9.4.2 Tour Operators
• 9.4.3 Meeting / Conferences / Seminars
• 9.4.4 Exposition
• 9.4.5 Incentive Travel
• 9.4.6 Extended stay market
• 9.5 Transient Market
• 9.6 Profiling of Hotel Guest
• 9.7 Summary
• 9.8 Review Questions
9.1 Objectives
• After reading this unit the learner will be able:
• To discuss the motives behind guests choosing a hotel.
• To discuss the role of hotel to improve the relationship with guest.
• To identify different kinds of guests by hotels to provide necessary services for
maximum guest satisfaction.
• To identify those potential guests important to improve sales of hotels.
9.2 Introduction
• Hotels have traditionally relied on three segmentation strategies – demographics,
product and combination of frequency, and monetary value – to gain customer
insight.
• These are no longer sufficient metrics to today‘s guests.
• What matters now are guest‘s income, trip frequency and degree to which they
do, or don‘t hotel facilities and services?
• These new metrics produce different types of guests which help managers
understand guests appetite for price or loyalty offers, preferred marketing
communication channel, and likely channel and point of sale they‘ll use to
research and buy a room.
• Hotels implement customer service strategies and technologies that are tailored
for each guest type.
9.3 Market Segmentation
• A marketing segment is a meaningful grouping of prospective buyers
having similar wants.
• Segmentation is a consumer oriented marketing strategy.
• Market segmentation give formal recognition of the fact that wants and
desires of the consumers are diverse and we can formulate a specific
market offering to specific category or segment of the market so that the
supply will have the best correlation with demand.
• Varied and complex buyer behavior is the root cause of market
segmentation.
• The hospitality market has two broad market segments:
• Group market Segment
• Transient Market Segment
9.4 Group Market Segment
• The group market constitutes the segment that provides the bulk
business to the hotel.
• The group market segment includes:
• Corporate market
• Tour Operators
• Meeting / Conferences / Seminars
• Exposition
• Incentive Travel
• Extended stay market
9.4.1 The Corporate Market
Segment
• The corporate market is among the bulk business providers as the
executives of the business houses are moving out of the town on
official trips.
• A contractual agreement is generally made with the business house to
attract the business from the corporate sector.
9.4.2 Tour Operators
• Tour operators generally purchase the rooms in bulk at high
discounted price because they provide bulk business.
• After making purchase they may prepare the tour packages for their
clients.
9.4.3 Meeting / Conferences
Seminars
• According to the Oxford Dictionary, a meeting is an assembly of people.
• For long time, there have always been people having meetings.
• This fact is also been attested by archeological investigations of old civilizations as there were ruins of some place of
common gathering.
• Meetings may be one of the major markets for the hotel industry.
• The meetings are generally organized by the corporate sectors, institutions, and other organizations for one or more of
the following reasons:
• To evaluate the performance of the company, department of the company or the employees of the organization.
• To discuss the introduction of the new product/service by the company.
• To the introduce new methods of operation
• Whatever the reasons may be, it result in the requirement of a venue and other support services required to hold the
meetings.
• Hotels having well appointed meeting halls, board rooms can capture the market.
• A conference center is a specialized hospitality operation dedicated to facilitating and supporting conferences.
• A conference center provides a venue for the conference, ministerial services required by attendee as well as organizer,
telecommunication facility, public address system, audio-visual aids, flip charts, white boards, projectors, screens etc. in
the case of residential conference and meeting the hotel or conference center should have adequate number of the
guest rooms to accommodate the attendee of the conference.
9.4.4 Exposition/Exhibitions
• The trade shows and exhibitions are designated to bring together individuals associated with a common
business or activity for the purpose of reviewing, demonstrating, marketing and selling materials and
product related to their common interest.
• The basic function of a trade fair is to facilitate the exchange of information between the companies and
the prospective buyers.
• A trade show may be of following types in the basis of the purpose:
• Industrial shows
• Trade shows
• Road shows
• Professional/ scientific exhibitions
• The trade fairs and exhibitions may or may not be open for common public.
• It caters to all those who have a specific demonstrative relationship to the event.
• The trade fairs attract a large number of attendee domestic as well as foreigner.
• The hotel may contact the officials arranging the trade show to become a cosponsor or the official host
of the show to gain more room sale.
• Trade shows lasts for several days thus have scope of increased room sales.
9.4.5 Incentive Travel
• Incentive travel may be broadly defined as a lure of a travel trip to motivate employees at work.
• This is a popular mode of motivating the employees to outperform in their work and align their
productivity to achieve organizations objectives.
• The organizations that offer incentive tours to their employees for one or more of the following
reasons:
• Increasing sales volume or increased employee productivity
• Selling new accounts or selling slow moving items, introducing new products, pushing low season sales or
overtaking competition
• Doing something profitable to the company, improving employee morale and goodwill, improving attendance
• Getting de-motivated employees to perform better
• The hotels can capture this market by approaching the companies who are giving incentive travel
to their employees.
• The chain hotels having properties at many locations can attract the prospective company by
offering suitable package of incentive tour.
• The individual or small chain hotel may exercise the same by developing coalition among them.
9.4.6 Extended Stay Market
• In today‘s climate of downsizing, outsourcing, and mobility,
businessmen are often away from their homes for extended duration
of time and require more than a hotel room.
• The hospitality industry has responded to the growing demand for the
extended-stay rooms.
• To capture this new segment the hotel should feature rooms with full
kitchen, safes, larger closets and other amenities in the rooms.
9.5 Transient Market Segments
• The transient market includes that segment which provides
comparatively low number of room sales than group market.
• It includes business and leisure travelers.
9.6 Profiling of hotel guest
• The sustained growth of any business/service, including tourism, invariably involves product development according to market needs.
• A primary requirement in this regard is to understand the distinctive features of consumers and their preferences.
• It is also important in the context of tourism to establish effective communication with potential visitors for attracting them to the
destination.
• The achievement of the same, however, involves the identification of specific segments of such visitors, their preferences and needs,
effective communication means to reach them and to know the geographical areas of their concentration.
• The statistical analysis of these factors in relation to any destination is known as profiling of tourists.
• Tourists profile also facilitates improvements in:
• Planning and deciding on development priorities,
• marketing strategies of tourism products, and
• services.
• Today, the profiling is also helpful for understanding guest-host relationships.
• Regular visitor surveys are always necessary to obtain tourist profiles. Periodical surveys are also conducted with specific objectives.
9.6 Profiling of hotel guest
Cont’d
• The specific characteristics usually analysed in profiling of hotel guest include the following:
• Age and Sex
• Educational status,
• Economic activity status,
• Occupation
• Place of residence
• Market segmentation, put simply, is the process of dividing up a total market into smaller parts that share
common characteristics, in order to deliver services to those people most likely to be interested in the
products that you offer.
• Markets can be divided in a number of different ways:
• purpose of travel (business, leisure),
• geography (by country),
• buyer needs and motivations,
• buyer or user characteristics,
• demography (age, gender, lifecycle),
• economy (income, education, occupation),
• psychography (psychocentric [inward looking], allocentric [outward looking]), geo-demography, price sensitivity.
9.6.1 Demographic Profile
• It depends on income, age, sex, family size, life-style, family life cycle,
education, religion, race and nationality and so on.
• If we look at demographic characteristic of the European market :
• Age : Between 25-29 years
• Sex : Majority of males, alone females very few.
• Family size : 2-4 members
• Income : Euro 7000 and above
• Occupation : Professionals, executives, teachers and professors.
• Education : Higher secondary and above.
• Nationality : German, French, Italia, Swiss, Dutch, Spanish.
• Based on this data, hotels can develop, rejuvenate or alter his or her tourism
products.
9.6.2 Psychographic Profile
• Based on social status, life-styles and personal traits:
i. Allocentric : for those money is not a constraint but they want to
enjoy a new and adventurous stay every time. They don‘t want
monotony.
ii. Psychometrics : Who are satisfied with existing facilities of basic
needs of food and accommodation.
• For example, Guests in the age group of 18-26, want to have a stay
full of leisure and thrill.
9.6.3 Behavioural Profile
• In psychological terms, the whole range of a generation of wants and their
transformation in to buying or using decisions can be explained as behavior.
a) Occasion for travel : guests can be classified as business guest, leisure guest,
VFR (Visiting Friends and Relatives), adventure guests, honeymoons and
heritage tourists.
b) Benefit\derivation : there are 3 core benefit segments, i.e.
i. Quality buyers – more concerned with hotels ambience and facilities than
cost.
ii. Service buyers – presses upon value for money i.e. image of hotel than cost.
iii. Economy buyers – who are concerned with cost and therefore would like to
keep it low.
9.7 Summary
• Hotels have traditionally relied on three segmentation strategies –
demographics, product and a combination of recency, frequency, and
monetary value – to gain customer insight.
• These are no longer sufficient metrics to today‘s guests.
• What matters now are guest‘s income, trip frequency and degree to which
they do, or don‘t hotel facilities and services?
• These new metrics produce different types of guests which help managers
understand guests appetite for price or loyalty offers, preferred marketing
communication channel, and likely channel and point of sale they‘ll use to
research and buy a room.
• Hotels implement customer service strategies and technologies that are
tailored for each guest type
9.7Review Questions
1. What is market segmentation?
2. What is the need of segmentation?
3. Write a note on sources group market?
4. What do you mean by profiling of hotel guest?
5. With reference to a guest of your choice, write a brief note on
his/her guest profile?
