Customer

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Customers overview

There are different types of customers, keep that in mind. Some people in the hospitality industry would rather talk about guests than customers: We will stick to customers as this is much broader than just the people who book.
Some remarks on the customers and the demand side of the market in general.
There are multiple types of customers including:

• Price buyers

Some of the customers are very sensitive to price changes and will only be loyal to the lowest prices in the market. This is (luckily?) less than 10 percent of the total of all markets: We define this group as price buyers.

• Memory!

Keep in mind that you can't just change a hotels strategy (for instance on price) very drastically in any given year. A hotel has a certain image as to what customers think of it. This will last, which means in effect majority of (potential) customers will remember last year as well and will take this into account in deciding which hotel to choose. Promotional activities e.g., on the other hand, will only have impact in one year.

• Price elasticity

There is Price elasticity of the demand in the market, but the price is just one of the items on which the market reacts. If the prices go way too low or way too high, there might be a buyer's strike in the market. The elasticity will deliver an extreme reaction at a certain point as your hotel (or even all hotels) might have lost credibility then. This means people will choose the competition on a higher level and might exchange a stay in a hotel for a long haul trip or a package deal or even buy new furniture instead of booking a trip. Total of the demand side will then shrink.

• Small differences

Some customers are sensitive to price-differences; it is just not true that they are always looking for a bargain. But, if hotel rooms seem to be a-like, a small difference in price or a psychologically interesting price, just may convince customers to book at your hotel.

• Last year's costs

As most costs and expenditures are only related to one specific year, this means that they only have an effect in that one specific year, research shows.

• Random

There is a small group who, no matter what you do, choose their hotel in a kind of random way. It is impossible to influence this group.

Guests so far

The percentage of customers choosing this hotel seems to indicate that it may be a bit out of fashion. The offer from the hotel stands, but in the end, customers just make their own choices, especially since the hotel is operating internationally in the modern 24/7 economy. The number of rooms booked by guests compared to the total available rooms is the occupancy rate: a very important KPI in hospitality. To get the highest occupancy rate, attend to the wishes of your customers and other interest groups (stakeholders) as well as keep the objectives of the hotel in mind, and combine this with your own goals! Be sure to think things over well and have proper arguments for your choices.
In the documentation available so far, there is no visible distinction between which customers are booked in the renovated rooms and which are in the unrenovated rooms.

Business customers

The hotel has always made it a priority to court the business market (65% of room rental revenue); in second place, the leisure market (35%). The type of customers attracted so far is an average of the business market. Almost all rooms are occupied just by one person. So, the average number of guests, especially during weekdays, is 1.0 per room. It seems that the location (in the city) is highly appreciated by business customers: not somewhere on the outskirts of the city, next to the highway. Apart from that, the hotel scores points for being a family-owned and -run hotel with personal attention to customers’ needs.

As explained on the business targetgroup page, during weekdays most of the bookings are by business customers.

Leisure customers

As mentioned, the hotel has always prioritized the business market ahead of the leisure market. The type of customers attracted so far represents the average for the leisure market. There are not really a lot of families with children, probably due to the location in the city. A large portion of the leisure guests also travel alone. The average room occupancy is merely 1.7 people per room.
As explained in the leisure targetgroup page, at the weekend most of the bookings are by leisure customers.

Number of guests

More information on the number of guests, guest nights and Bookings can be found on these pages.

New targetgroups

New ideas on the targetgroups are very welcome. The only thing the Bergman's wants you to stick to is a difference in prices for weekend versus weekdays. For both situations a rack-rate (maximum price) and a last-minute rate (a minimum) are required. Other pricing plans are nice, but the family sees this as marketing decisions and wants to stick to the basic price system: weekends / weekdays.
Whether your assignment is managing one of the new establishments, or the original hotel, the situation around the type of guests and weekdays remains the same in terms of the starting point.

New locations

If you are starting a new location, realize that still these two 'groups' are the main way to look at the total market. Nice markets are fine to profile yourself, but will never give you enough 'volume', or occupancy.

→ Go! Following the Introduction to the Hotel? Step 7/10 is the Leisure targetgroup page, click here

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