A new Cornell study offers a refreshingly-in-tune-with-the-times viewpoint of hotel segmentation strategy. The report ‘Brand Segmentation in the Hotel and Cruise Industries: Fact or Fiction?’ by Michael Lynn holds that hotels and cruises are better off focussing on “slightly differentiated” markets and demographic groups than attempting to go after and conquer large, exclusive groups of customers.
Segmentation as a strategy belongs in the old school of marketing thought. In the brave new world of web 2.0 and information-powered strategies, every company competes with every other company as long as they are going after the same customer (who has a specific need or a problem to be solved) with slightly different solutions. The second big reason – the hospitality industry has never had the going so good in a long time – the overall positive indicators, travel and tourism #s, the spend-happy bayboomers and trend-happy Gen Ys are powering a healthy outlook. More and more hotels have used the windfall to refurbish guest experiences and step up amenities to a new level, often blurring the line between economy and midmarket. Finally, search-engine marketing and user-generated content have leveled the playing ground – when a user looks up “new york city hotels” on Google or Yahoo, all players are competing for the same customer!