Whether through hotel content marketing, social media ad placements, or traditional advertising, all hotel marketing strategies are most effective when they target a specific market segment. From business travellers to leisure visitors, different traveller types prioritize different hotel experiences, and effective marketing highlights the services that matter most to each group.
The trick to personalizing your hotel marketing campaigns starts with understanding your market segments. Most hotel guests can be grouped into a few broad categories based on shared needs and booking behaviour. This post will explore key hotel industry market segmentation examples and share practical strategies for targeting the right segments for your hotel.
Why is Hotel Market Segmentation Important?
Hotel market segmentation is the practice hoteliers use to tailor their marketing strategies to audiences in the best position to benefit from their stay. By grouping guests into categories based on shared characteristics, behaviours, and booking patterns, hotel marketers can focus their efforts on a more personalized and effective audience.
When done right, segmentation helps hotels build stronger marketing campaigns and deliver better guest experiences. That’s because it lets you focus on the traveller types your property is best suited for. Instead of casting a wide net, you reel in a carefully chosen line that strengthens brand authority and builds loyalty within your target audience.
It’s also a core part of hotel revenue management. Concentrating your marketing efforts on the right segments reduces unnecessary expenses, maximizes your return on investment, and improves your most important hotel KPIs.
The next step is figuring out which segments to prioritize.
While every property is different, most hotels work with five main market segments: transient, corporate negotiated, group, wholesale, and other specialized categories. Understanding how each group books, travels, and spends helps reveal where your current business is coming from and where your biggest growth opportunities may be.
How to Identify and Group Your Guest Segments
Marketing to the right audience starts with understanding who your hotel guests actually are. And identifying your guest segments starts with digging into the data from your property management system (PMS), customer relationship management system (CRM), and any other tools you use to track guest behaviour.
Through these tools, you can extrapolate insights into who is booking your stay, how often, and what kinds of experiences they are looking for. What you’ll find is that most of your guests can typically be grouped into several groups based on factors like length of stay, purpose of trip, and individual preferences.
These will become your hotel customer profiles and help you tailor your marketing, pricing, and services to reflect the real needs and preferences of the people booking your stay.
7 Hotel Market Segmentation Examples: A Deep Dive into Common Guest Segments
There are several ways to categorize hotel market segments. While most hotels categorize their guests into seven main market segments — transient, corporate negotiated, locally negotiated, group, wholesale, discount, and other specialized categories — you can also categorize different segments based on different types of travellers.
No matter how you approach it, each segment has its own booking habits, expectations, and marketing opportunities. And the better you understand these differences, the easier it becomes to fine-tune your pricing, promotions, and overall guest experience.
While each of these should be customized to fit the specific types of hotel guests your property attracts, let’s look at some of the most common hotel market segment examples to help get you started.
1. Transient Guests
Transient guests are free independent travellers, whether for business or leisure, who aren’t part of a group or contracted rate. These tend to be your typical hotel guests, and they usually book directly through your website or online travel agencies (OTAs). These guests often feature shorter stays and are highly influenced by price, reviews, and convenience.
2. Corporate Negotiated Guests
Corporate negotiated guests are a more specific market segmentation of business travellers whose hotel rates are based on an agreement with their employer. Rates for this segment are typically agreed to based on a minimum number of nights booked annually and tend to offer better consistency and predictable occupancy during weekdays.
3. Local Negotiated Guests
Local negotiated guests are another subset of corporate hotel market segmentation that comes from businesses or organizations within your region. Common examples include hospital staff, university departments, government agencies, or small businesses that regularly book rooms. These types of bookings can serve as a reliable source of revenue during slower periods. Contracted rates for this segment are often negotiated seasonally or annually.
4. Group Business
Also known as the group segment, group business refers to bookings made as part of a block of rooms reserved by one organizer. This can include business trips but can also be for sports teams, wedding parties, conference attendees, or tour groups. Guests in this hotel market segment often book their rooms well in advance with the expectation of volume-based discounts. Including event space or catering services is a great way to promote your hotel for these group reservations.
5. Wholesale Guests
Wholesale guests book their stay through a third-party wholesaler or bed bank with pre-negotiated net rates with the hotel. These bookings are often bundled into packages sold through travel agents or tour operators and can help fill rooms during the off-peak season while taking some of the burden off your internal marketing team. It’s a great way to fill beds during slower periods without relying entirely on direct promotions.
6. Discount Guests
Discount guests are price-sensitive travellers who book using special promotions, loyalty redemptions, or limited-time offers. While these guests may generate lower revenue per stay, targeting them during low-demand periods can help boost occupancy. This market segment can also be a powerful target if your hotel operates with higher occupancy but lower luxury, such as hostels or budget accommodations.
7. Other Market Segments
This final category includes guests who don’t neatly fit into the main segments. These might include military personnel, diplomats, politicians, or long-stay guests under custom arrangements. While these bookings may be less frequent, they can strategically influence your overall mix. Targeting these niche segments is also a smart way to stand out in a competitive market.
Targeting the Right Segments for Your Hotel
The whole point of hotel market segmentation is to increase efficiency by tailoring your efforts to your audience. To do this, you need to identify the right hotel target market segments for your property. Getting this first step wrong can be catastrophic for the entire campaign. So let’s make sure you get it right.
Start general. Go through the above list of common hotel market segments and pick out the most relevant ones for your property. But don’t just choose at random. Make sure raw data backs up your decisions, grouping hotel guests based on measurable insights.
Once you have a general grouping, it’s time to get more specific. Revisit the types of guests your hotel attracts and start building segments within segments. Aim to narrow things down to clearly defined guest profiles while keeping the scope broad enough to attract a meaningful audience.
From there, you can start shaping your marketing campaigns around these profiles. Business travellers, for example, might respond well to loyalty perks or weekday discounts, while leisure guests could be more interested in seasonal packages or experience-based offers.
Be sure to optimize your hotel website and OTA listings to reflect the offers, discounts, and features that appeal to each market segment the channel targets. From content and photos to descriptions and how your rooms are packaged, each distribution channel should speak directly to the ideal customer it’s meant to reach.
Smarter Booking & Distribution Strategies by Segment
Speaking of online distribution channels, once you’ve locked in your target segments, the next step is figuring out how to reach them. Different segments have different booking habits, and your distribution strategy should bridge the gap between how your audience books and how your hotel appears across platforms.
For example, transient guests often book through OTAs or your hotel website, while group or wholesale guests are more likely to come in through travel agents or negotiated contracts. While it’s smart to start with one or two key segments, your long-term strategy should involve a variety of channels to attract a broader mix of guests.
Each segment should also have its own pricing approach. It doesn’t make sense to charge group bookings or business travellers the same per-room rate as a solo leisure guest—especially when those larger or recurring bookings help fill rooms during off-peak periods.
Tools like channel managers, revenue management systems, and your property management system (PMS) can help you stay organized. These systems let you automate pricing updates and ensure that the right rates and packages appear on the right channels.
It’s also worth digging into your booking patterns and guest reviews. These insights can show you which segments are coming through which channels and help you understand what’s working and where you might need to adjust.
5 Common Challenges in Hotel Market Segmentation
Market segmentation works best when it’s clean, consistent, and backed by solid data. But in practice, there are a few common issues that can throw a wrench in the process.
1. Segment Definitions That Overlap or Aren’t Clear
If your segments aren’t clearly defined, things start to blur. You might end up marketing the same offer to different groups or, worse, confusing your team. Make sure each segment has a clear purpose and doesn’t cross over with another.
2. Weak Data or Incomplete Guest Profiles
If your guest profiles are missing key info or your systems aren’t pulling clean data, your segmentation will be off. You want to ensure your PMS or CRM is up to date and that you’re using guest behaviour to shape your segments—not just guessing.
3. Marketing and Operations Not on the Same Page
You can have the perfect marketing plan, but it falls flat if your team on the ground isn’t aligned. Everyone—from the front desk to housekeeping—should have a basic understanding of who you’re targeting and what those guests are expecting.
4. One-Size-Fits-All Pricing
Not every guest segment should be treated the same when it comes to pricing. If you’re charging group bookings the same as solo travellers or applying discounts where you don’t need to, you’re leaving money on the table.
5. Not Tracking the Right Stuff
If you’re not actively measuring what each segment is doing—like how they book, how much they spend, or how often they return—it’s tough to know what’s working. Tracking the right KPIs for each group is key to improving over time.
Measuring Success and Refining Strategies
The biggest step in executing a targeted marketing campaign is getting started. But it’s also only the first step. Throughout the entire process, you need to be able to measure its execution and adapt your strategies when needed.
To measure the success of market segmentation strategies, you need to regularly analyze your hotel’s key performance indicators. These often include revenue, occupancy, and guest satisfaction, but you should also look at them through each guest segment’s lens.
Dig into how each group is performing. Are your corporate negotiated guests delivering steady weekday bookings? Are discount travellers helping you fill rooms during low periods but dragging down your average daily rate? If not, then it’s time to adjust.
These are the kinds of patterns that help you get the most out of your segmentation efforts.
And this is where your hotel tech stack comes in. Tools like your PMS, CRM, and revenue management system should already collect most of the data you need. Use them to track trends across hotel segments and spot where things are working or falling short.
Just like any good marketing strategy, segmentation isn’t a one-time setup. It needs regular check-ins, a bit of tweaking, and a willingness to shift focus as your guests’ behaviours evolve. But when done right, it leads to less guesswork, stronger results, and a smarter way to grow.
Let’s Turn Your Segments into Strategy
If you’re looking to attract the right guests, fill more rooms, and make your marketing spend go further, segmentation is just the beginning. I help hotels build content strategies rooted in real data and designed to drive bookings—not just clicks.
Whether you need help mapping your audience, refining your messaging, or turning your website into a lead-generating asset, I’d love to help.
Let’s connect for a quick call to discuss how we can build a segmentation strategy that attracts the right kind of bookings.
Kurt Norris is the founder of Kurt’sCopy, where he helps B2B, e-commerce, SaaS, and local businesses craft compelling content and SEO strategies that deliver measurable results. With over six years of experience, Kurt specializes in creating data-driven campaigns that drive traffic, increase conversions, and establish brand authority.
