Hotel Value Proposition (5): Defining and Identifying Your Target Audience

In this series of articles written so far (1) (2) (3) and (4) on a hotel’s value proposition, we have discussed the importance of having a clear and appealing proposition for our guests, as well as the different stages and strategies for designing it, along with some real-life examples.

In this article, we will focus on defining and identifying the target audience, a key task in the process of creating an effective value proposition.

After conducting a competitor analysis and having defined our Mission, Vision and Values statement, it is time to focus on understanding who our value proposition is aimed at and what their needs are. Below, we will look at how to identify and define our target audience in order to design a value proposition centred on their needs and desires.

Defining and identifying the target audience is a critical stage in the process of creating a hotel’s value proposition. It is important to understand who the value proposition is aimed at and how their needs can be met.

In this article, we will explore in depth the importance of defining and identifying the target audience and how this can be carried out within the process of creating a hotel’s value proposition.

What does defining and identifying the target audience involve?

Defining and identifying the target audience involves identifying and analysing the potential guests the hotel is aimed at. It is important to understand their needs, desires and expectations, as well as their purchasing behaviour and consumption patterns.

Defining and identifying the target audience also helps the hotel determine how the value proposition should be presented so that it is relevant and appealing to that audience. This may include tailoring services and offering specific experiences that meet guest needs.

Defining and identifying the target audience is important for several reasons:

It helps focus marketing efforts: By understanding who the hotel’s potential guests are, marketing efforts can be focused effectively and efficiently on attracting that target audience.

It helps create a personalised experience: By understanding the potential guest’s needs and desires, the hotel can tailor the experience to meet those needs.

It helps establish a clear brand image: By targeting a specific audience, the hotel can establish a clear and consistent brand image.

It helps inform operational decisions: Defining and identifying the target audience can help the hotel make operational decisions, such as selecting suppliers and determining its service offering.

Below are the steps that can be followed to define and identify the target audience as part of the process of creating a hotel’s value proposition:

1. Analyse guest data:

The hotel should analyse guest data to understand who its current guests are and what characteristics they share. This may include age, gender, geographic location, income and purchasing behaviour.

Once guest data has been collected and analysed, it is important for the hotel to use it effectively to improve the guest experience. One of the most effective ways to do this is by personalising services and offers to meet each guest’s specific needs and desires. This can be as simple as offering a personalised menu in the hotel restaurant based on a guest’s dietary preferences, or as complex as creating bespoke packages for groups of guests with similar interests.

Another important approach to using guest data is personalised marketing. Hotels can use the data collected to send personalised messages and offers to guests via email, text messages and social media. These offers can be adapted to guest preferences, such as spa offers for guests who have booked spa treatments in the past or golf offers for guests who have booked nearby golf courses.

2. Conduct market research:

The hotel should conduct market research to understand the needs, desires and expectations of potential guests. This may include surveys, focus groups and social media data analysis.

Conducting market research is essential to identifying and understanding the needs and preferences of potential and current guests. This involves carrying out quantitative and qualitative market studies, such as surveys, in-depth interviews and focus groups, among others. Through this research, hotels can obtain valuable information about guest behaviour patterns, purchasing habits, and their expectations and desires regarding the services and experiences they seek in a hotel.

Furthermore, market research can also help hotels identify emerging trends in the hospitality industry and gain a better understanding of their competitors. By assessing the strengths and weaknesses of competing hotels, hotels can obtain key insights to develop a unique value proposition that allows them to stand out in the market.

3. Create guest profiles:

The hotel should create guest profiles that reflect the shared characteristics of its target audience. This may include creating fictional personas that represent the target audience.

Once data has been collected and market research has been conducted, the next step is to create guest profiles. These profiles are detailed descriptions of the different types of guests expected to visit the hotel. To create these profiles, it is important to use the information collected about guests to identify the different market segments.

Guest profiles can be as detailed as desired, but they generally include information such as age, gender, income level, place of residence, profession, interests and purchasing preferences. They may also include information about purchasing patterns, consumption habits, motivations and the needs of each guest segment.

It is important to remember that guest profiles are not static and should be regularly updated to reflect changes in purchasing trends and guest needs. In addition, different guest profiles may be required for different times of the year or for different types of promotions.

Creating robust guest profiles is an essential part of the hotel’s value proposition development process, as it enables hoteliers to identify the different types of guests who will visit the hotel and tailor the offering to their needs and preferences. With well-defined guest profiles, the hotel can design personalised and relevant experiences that meet the expectations of each guest segment.

4. Assess the competition:

The hotel should assess the competition to understand how competitors are targeting their audience and what services and experiences they are offering.

It is important for hotels to understand their direct and indirect competitors in order to identify their own hotel’s strengths and weaknesses by comparison. To assess the competition, detailed research must be conducted into hotels offering similar services in the same geographical area.

First, it is important to identify direct competitors: hotels that offer similar services to the same target audience and are located in the same geographical area. It is important to analyse their value proposition, the types of rooms they offer, pricing, additional services, level of guest service, guest reviews and the quality of the overall experience.

It is also important to analyse indirect competitors: hotels that do not offer the same services as the hotel in question but may meet the needs of the same target audience. For example, if the hotel in question is located in a tourist destination, holiday apartments or rural accommodation could also be considered indirect competitors.

Once direct and indirect competitors have been identified, the strengths and weaknesses of each should be compared with those of the hotel in question. Do they offer additional services that the hotel does not? Do they have better prices? Do they have better guest reviews? These are important questions that must be answered in order to identify areas where the hotel can improve.

In addition, it is important to analyse trends and changes among competitors. For example, if a new hotel is about to open in the same geographical area, it is important to know the details of its value proposition in order to anticipate any potential impact on the business. It is also important to analyse wider market trends, including changes in demand and supply, as well as technology and marketing trends that may affect the hotel sector as a whole.

5. Target audience segmentation:

Once the different groups of potential guests have been identified, the next step is target audience segmentation. This involves dividing potential guests into smaller, more homogeneous groups based on their shared characteristics and needs. Target audience segmentation enables the hotel to design a more effective and personalised value proposition for each segment.

There are different criteria for target audience segmentation, for example:

• Demographic: age, gender, income, education, marital status, etc.
• Psychographic: personality, lifestyle, values, interests, etc.
• Behavioural: purchasing habits, product usage, degree of loyalty, etc.

It is important to bear in mind that not all segmentation criteria are relevant to every hotel, and a combination of criteria may be used. For example, a luxury hotel may segment its target audience by age, income and interests, while a boutique hotel may segment according to guests’ lifestyle and personality.

6. Selecting the target audience

Following segmentation, the hotel must select the target audience it will address with its value proposition. At this stage, each segment should be assessed based on its attractiveness, size, accessibility and compatibility with the hotel’s objectives and resources. The aim is to choose a target audience that is large enough to generate meaningful revenue and attractive enough to justify marketing costs and investment in the value proposition.

In addition, the hotel must ensure that the selected target audience aligns with its Mission, Vision and Values statement and its competitive position in the market. For example, a luxury hotel should not select budget travellers as its target audience, as this would be incompatible with its market position.

It is important to bear in mind that not all guests are the same, and each group has different needs and expectations. Therefore, target audience selection must be specific enough to ensure that the hotel can meet their needs and expectations.

To select the right target audience, it is essential to have a clear understanding of the hotel’s strengths and weaknesses, and how they compare with those of the competition. This will make it possible to identify which guest groups are best suited to the hotel and how it can differentiate itself from the competition.

It is also important to consider the economic and social profile of potential guests, as well as their travel habits and preferences. For example, do they travel primarily for business or leisure? Are they interested in cultural experiences or outdoor activities? Do they belong to a particular age group, or are they a mix of different ages?

7. Developing the value proposition for the selected target audience

Once the target audience has been selected, the hotel must develop a specific, guest-centred value proposition for that segment. The value proposition must be relevant, differentiated and appealing to the selected target audience, and it must align with the hotel’s Mission, Vision and Values statement and competitive position in the market.

The value proposition should clearly communicate the benefits and advantages the hotel offers its target audience, as well as the brand’s values and personality. This may include aspects such as service quality, location, facilities, dining, comfort and room design, among others.

In any case, I will address this topic in a separate article.

8. Implementing and communicating the value proposition

Once the value proposition has been developed for the selected target audience, the next step is to implement and communicate it effectively. Implementation involves ensuring that all hotel operations are aligned with the value proposition and that guest expectations are met at every touchpoint with the hotel. It is important to ensure that all team members are aligned with the value proposition and work accordingly. In addition, it is important to continually assess the value proposition to determine its effectiveness and make adjustments where necessary.

I imagine that after reading this article, you may feel that your hotel needs to review and redefine its value proposition. That is perfectly normal, as day-to-day operations do not always allow us to pause and consider the aspects that can make a difference. This is where I can help you analyse the strengths and weaknesses of your hotel, identify market opportunities and design a clear and appealing value proposition for your guests.

I am at your disposal to schedule a video call  to talk about your hotel and how we can work together to improve its value proposition.