It is necessary to determine who is the consumer of hotel services, what categories are there, and their difference between each other. Also, an important question is how to determine your target audience to implement the positioning of a hotel object more clearly and, as a result, correctly build advertising campaigns? These are the topics that need to be clarified first of all for the effective work of marketing.
Customer Demographics and Psychographics
According to a study conducted in 2020, the middle class of the US population makes up 52% of the total population – the income of this category is in the range of $45,200 to $135,600 per year (“Travel and Tourism”, n. d.). The wealthy population makes up 29% of the total population – the income of this category is more than $135,600 per year (“Travel and Tourism”, n. d.). The country’s poor population is 19% – the income of this category is less than $45,200 per year (“Travel and Tourism”, n. d.). The average distribution of wealth concerning the percentage of the population can be estimated for 2020, which shows that people with a fortune of $10,000 to $1 million make up 66% of the US population (“Travel and Tourism”, n. d.). Thus, the main category of consumers is determined.
For many years in a row, the United States has been ranked first in the world in terms of the annual influx of immigrants by a significant margin from other countries. While a relatively large number of immigrants arrive in the United States illegally, creating a severe burden on the country’s social services (“Understanding your customers”, 2016). Despite the fact that there were few fundamental changes in the legislation in this area, noticeable changes occurred in migration services: the requirements for many categories of visas have become much stricter. The entire American hotel industry is designed for the domestic tourist market.
For example, 33 million tourists come to Chicago every year, and only 2 million are foreigners (“Travel and Tourism”, n. d.). This is even though Americans do not travel much at all. Thirty-one million American guests in Chicago are so-called business tourists who come to this city for conferences, symposiums, professional exhibitions.
When analyzing the latest statistics on outbound trips to the United States by age, it became clear that millennials are the group that is ready to travel for the most extended period — 35 days a year, while Generation X rested for an average of 26 days (“Millennials”, 2016). Millennial Americans who do not have children are now less like typical tourists and more like the experienced generation. Most of their booking habits are focused on exploring cultures, booking retreats or events rather than visiting theme parks and tourist traps (“Millennials”, 2016). Because of their independence and spontaneity, nearly half of them can plan a vacation at the last minute, with or without friends, because a solo trip signifies cultural growth and meeting new people to them.
These statistics on the age of travelers also show that half of the individual travelers make up to three trips a year, have a higher or higher education, and individual travel to the United States is more noticeable among women. The statistics of one trip by age group show that almost every third baby boomer chooses a cruise as a vacation and strives to make at least four trips a year. As for families, the majority go during the summer holidays (80%), and only four out of ten plan trips with their family (“Travel and Tourism”, n. d.). Millennial families, on the other hand, are significantly more likely to travel with younger children (62 percent).
There are many methods of segmentation of the target audience. The method developed by Mark Sherrington is almost universal. To use it, special knowledge and skills are not needed. The point is to get answers to the five main questions:
- What are you selling?
- Who is your buyer?
- Why should he buy a product, and what problems will he solve with it?
- Under what circumstances may the product be needed?
- Where will the buyer see and purchase the product?
The other method is called Lifetime Value. It is based on the indicator of the lifetime value of the client. It is determined by the amount of profit that one client brings for the entire time of interaction with the business (“Mosaic USA”, 2018). Segmentation considers:
- the buyer’s income;
- the number of purchases on the site;
- brand commitment;
- the degree of loyalty.
The tool is used for effective planning of the advertising budget. First, an entrepreneur looks at how much money a particular client can bring and then decides whether it is profitable to invest in advertising to attract them. According to the LTV method, the audience is divided into three groups:
- Middle Class.
Having studied the psychographic and sociodemographic characteristics of clients together, it is possible to describe the profiles of the obtained segments (Samuel, 2016). The 1st segment is “demanding”. The income level of its representatives is above average when staying in a hotel; the essential service is catering. In the matter of interior design, they equally prefer a free and classic style. This segment is most widely represented (40%), mainly men (90.9%) aged 30 to 50 years, holding managerial positions or being entrepreneurs (“Travel and Tourism”, n. d.). The 2nd segment is “loyal”.
The monthly income in this segment is from $4,000. It is crucial for them that the hotel provides catering and entertainment services for guests. They prefer a free style of interior design. The 3rd segment is “elite”. Represented by clients with the highest level of income. Equally essential for them to are services such as a sauna, a swimming pool, catering, and entertainment. Classic and extravagant styles are most acceptable for them when decorating the interior. Men make up 80% here, and their average age is more than 50 years; they hold leadership positions.
Customer Relationship Management
Salesforce’s Sales Cloud provides customer and sales support in both B2B and B2C. Moreover, another tool that can be used is Dynamics 365 Sales. This tool is suitable for companies of any size in such industries as private wealth management, non-profit activities, manufacturing, tourism, and hotel business. Thanks to them, you can effectively manage channels and partners. Due to the opportunities for the selection, adaptation, and training of partners, Sales Cloud and Dynamics 365 Sales help share the results of their work to increase their motivation.
It is possible to jointly create account plans, set up communication development programs with trading partners, and track KPI indicators using partner evaluation cards (“Experian study”, 2016). The platforms automatically trigger predefined actions based on real-time events, such as learning progress, user login approval, and lead acceptance (Wailgum, 2018). They also help to use cross-channel and individual service approaches for the life cycle of partners.
The tourism industry is known for its highly labor-intensive activities. Its upward trends allow opening up new career opportunities much faster than in any other niche. Using various tools and making efforts to study critical consumers, the risks can be significantly reduced. Thus, there are many opportunities for conducting a hotel business.
Experian study reveals that relevancy is key to reaching today’s digital consumer. (2016). Experian. Web.
Millennials: Technology = social connection. (2016). Nielsen Insights. Web.
Mosaic USA: Your customer segmentation solution for consistent cross-channel marketing. (2018). Experian. Web.
Samuel, A. (2016). Psychographics are just as important for marketers as demographics. Harvard Business Review. Web.
Travel and Tourism (n. d.). U.S. Bureau of Economic Analysis. Web.
Understanding your customers: How demographics and psychographics can help. (2016). PennState Extension. Web.
Wailgum, T. (2018). What is CRM? Software for managing customer data. CIO. Web.