Applying Stay-Purposed Segmentation in Hotel Upselling
Navigating the Revenue Management Game in the Hotel Industry
May 25, 2023
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June 14, 2023
Applying Stay-Purposed Segmentation in Hotel Upselling: A Comparison to the Airline Industry
In the airline industry, the concept of personalization and its potential benefits are constantly being explored. However, there is an alternative approach called non-personalization using trip-purpose segmentation that offers powerful results. This approach aims to understand the "why" behind traveler preferences without relying on personal data or past behavior.
Non-personalization in the airline industry involves making trip recommendations based on contextual information such as search parameters. These parameters may include details like the number and age of travelers, origin and destination points, and travel dates. While this approach may be the only information available for anonymous travelers, it can still provide valuable insights to airlines.
However, a hybrid solution combining personal data with contextual information is often the optimal choice. By leveraging personal data, such as a traveler's previous negative experience, airlines can enhance the recommendation process. For instance, if an airline identifies a prior service failure and responds by offering a free seat upgrade during the traveler's next flight search, it greatly improves the overall experience.
Trip-purpose segmentation in the airline industry involves grouping travelers into cohorts based on transaction data and the purpose of their trips. This segmentation approach has been used for a long time, with examples like distinguishing business trips from leisure trips based on a Saturday overnight stay. With advancements in technology and the application of AI/ML, airlines can now analyze various shopping request attributes to identify commonalities across trips and create unique cohorts. For instance, creating a cohort for travelers on their first-ever trip to Paris allows airlines to offer personalized deals that better align with traveler needs, increasing the likelihood of conversion into revenue.
Comparing this approach to the hotel industry, stay-purposed segmentation in hotel upselling takes a similar path. By understanding guests' purposes for their stay, hoteliers can tailor upselling offers and services accordingly. Instead of relying solely on personal data, hotels can use contextual information like booking preferences, guest demographics, and the nature of the trip to create personalized recommendations that align with guest expectations.
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Understand Guest Intentions: Take the time to understand the specific purposes behind each guest's stay, whether it's for business, leisure, a special occasion, or a group event. This will help you tailor your upselling offers to their specific needs and desires.
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Leverage Transaction Data: Utilize transaction data to group guests into cohorts based on their stay purposes. By analyzing commonalities across stays, you can create targeted offers and recommendations that resonate with each segment.
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Personalize Offers Within Segments: While stay-purposed segmentation focuses on broader purposes, don't forget to personalize your offers within each segment. Consider individual preferences, past guest feedback, and any specific requests to create a truly tailored upselling experience.
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Capitalize on Contextual Information: Utilize contextual information, such as booking parameters, guest demographics, and trip details, to make relevant inferences and recommendations. This information provides valuable insights even in the absence of personal data.
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Continuously Optimize and Adapt: Monitor the performance of your stay-purposed segmentation strategy and analyze the results. Refine your approach based on guest feedback, changing preferences, and emerging trends to ensure your upselling efforts remain effective and drive maximum revenue.
In conclusion, while personalization is an important aspect of upselling, the non-personalization approach using trip-purpose segmentation in the airline industry highlights the significance of understanding the "why" behind traveler preferences. Similarly, stay-purposed segmentation in hotel upselling allows hoteliers to offer personalized experiences based on guests' specific purposes for their stay. By leveraging contextual information and transaction data, hotels can maximize revenue and guest satisfaction while providing tailored recommendations that resonate with guests' needs and objectives.
