Target group
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Step 5/10: Target groups, supply and demand
The market is the virtual space where offers (supply) and demand (products and goods asked for by the customers) meet.
In any commercial market we recognize
- The supply side: the selling parties, in this case the hotels offering their products to the customers.
- The demand side: the consumers interested in bookings the hotels.
Prices and occupancy rate
For a hotel there are two main target groups to aim for:
Weekend guests
Families and people passing by are the Leisure target group. Depending on the configuration of the group/party, they will have school holidays during the high season or other weeks. They are a main target group for the weekends. The average room is occupied by 1,7 persons. Some of the rooms have connecting doors and are ideal for families having their children in a separate bedroom. So a party of 5, with three children can have one room with two beds and a second room with three beds connected with a door.
So in fact, there are no special "family rooms" and as you can tell by the average of 1,7 there are not many big families. So you can target any group you think is interested in the hotel.
In the past, it has been proven that the weekend days, so Friday, Saturday, and Sunday are the main days this target group will book. The prices for these weekend days on taking over ranged from € 80 (last-minute) to € 100 (rack rate) per room per night. There is, due to flex-pricing and the internet, lots of diversity in the prices. These prices just give an indication. In addition, there are the 'old' rooms and the renovated ones. A transparent and fixed price system doesn't exist anymore, nowhere in the branch. Depending on the occupancy rate, the expectations, and the guests, the price is often individually decided upon at the moment of the request, or quotation asked for.
The price of the room always includes breakfast. The breakfast is included in the room price and is considered to cost an average of € 10 per room per night. This cannot be left out of the room price and is not considered to be part of the food and beverage spendings. Apart from this, the average weekend day brings in an additional average of € 20 per person per night on food and beverages. So, at 1,7 persons per room per night, an average of € 37 per night for dinners, bar-use etc. is achieved. This is totally separate from the room price. This depends largely on the type of guest, the season and the number of people in the room.
Week guests
Prices in this segment in the past ranged from € 100 minimum to € 140 maximum per room per night during the weekdays. The rooms are occupied by just one person and the Business target group is important so far. But, you can choose any target group. The weekday's guests specifically ask (most of the time) for renovated rooms, for the internet and they do not generally like to stay on the ground floor. Do not change the price by more than 20% per year: this will be way too much a change: there is a history of the hotel.
The room prices mentioned, which are the sales prices so the prices you will decide upon, have always included breakfast for all the guest(s) in the room.
So if the average price is € 100 including the breakfast, the room price, in fact, is more like € 90 on an average if the breakfast costs would be left out. This is not possible by the way. Most rooms booked during the week will be occupied by one person.
In the documentation available so far, there is no visible distinction between which customers are booked in which rooms (renovated or not).
Markets for Emerald Forest Hotel
In the hotel of the simulation the number of decisions is, deliberately, limited. So you can sell your hotel rooms to target groups suiting to your image and plans. Be sure the groups are big enough to fill your number of rooms. The main thing is that you will have to make decisions on
As you taken over leisure targetgroup are especially interested in the weekend days and business targetgroup especially interested in the weekdays. But you can change this around or chose your target groups in a totally different way.
If you plan to aim at very specific target groups or niches, be sure to explain this clearly in the explanations each year. Shifting too much between targetgroups is not a good idea, and, of course, there is a history so people have certain expectations.
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