Customer

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Type of customers generally

There are different types of customers, keep that in mind. Some people in the hospitality industry rather talk about guests then 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 of the 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 drastic in any year. A hotel has a certain image as to what customers think of you. This will last, which means in effect the main part of the (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 during 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 buyers 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 for 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. The total of the demand side then will 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 psychological interesting price, just may convince customers to book at your hotel.

• Last year's costs made

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

Guests so far

The split up in types of customers seems to be a bit out of fashion. The offer from the hotel stands, but in the end, any customers just makes its own choice. Especially as the hotel is operating internationally in the modern 24/7 economy. The number of room booked by guests compared to the total available rooms, is the so-called occupancy rate: a very important KPI in hospitality. To get the highest occupancy rate take care of the wishes of your customers and other interest groups (stakeholders) as well as keeping the objectives of the hotel in mind, and combine this with your own goals! Be sure to think things well over and have proper arguments for your choices.
In the documentation available so far, there is no distinction visible between which customers are booked in the renovated rooms and which in the not renovated rooms.

The business customers

The hotel has always in the first place been aiming at the business market (65% of the revenues of renting out rooms) and in the second place on 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 guest during the especially weekdays in any room is 1.0. It seems that the location (in the city) is appreciated highly by the business customers: not somewhere in the outskirt 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 for the needs of its customers.
As explained in the page business targetgroup, during weekdays most of the bookings are by business customers.

The leisure customer

As mentioned, the hotel has always in the first place, been aiming at the business market and in the second place on the leisure market. The type of customers attracted so far represents the total of the leisure market. Not really a lot of families with children, due to the location in the city probably. A large group of the leisure guests, also travel alone. At an average, the room occupancy is merely 1.7 persons per room.

As explained in the page leisure targetgroup, in the weekend most of the bookings are by leisure customers.

Number of guests

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

New target groups

New ideas on the target groups are very welcome. The only thing the Bergman's wants you to stick to is a difference in prices for the weekend and the weekdays. For both situations a rack-rate (maximum price) and a last-minute rate (a minimum) are required. Other plans on prices 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 type of guests and weekdays remains the same in terms of 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 of the market. Nice markets are fine to profile yourself, but will never give you enough 'volume', occupancy.

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

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