02Nov

The STP Model for Your Hotel: Segmenting, Targeting, and Positioning

Author: Avanti Joglekar

Segmentation, Targeting, and Positioning: What you Need to Know

The segmentation, targeting, and positioning model for attracting and retaining guests is one of the most widely used in the hospitality industry.  The STP model, as it’s commonly known, is popular because it’s both highly effective and measurable.  Another advantage to the STP model is that it’s relatively simple in its approach.  However, it still requires a rigorous attention to detail, a thorough understanding of your guest’s behavior, and the ability to prioritize your efforts towards your revenue goals.  Here are the three main aspects of the STP model and how you can map out an effective and profitable plan for your hotel.

Step One: Market Segmentation

Market segmentation is the process that each property goes through to identify their most profitable guests.  This is a crucial process for every hotel, since your segmentation strategy will inform everything from your forecasts to your pricing strategy.  Typically, segmentation is based on two methods: business and channel.  Business segmentation categorizes guests by their travel purposes, and channel segmentation uses the guest’s booking method.  Every property should use a combination of the two, with each method divided into distinct subcategories, in order to properly identify their segments.

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Step Two: Targeting the Right Segment

Once the guest pool has been parsed out into the property’s market segments, you’ll want to use the data generated by your revenue management software to determine which segment generates the most profits.  You’ll also want to examine the cost of acquisition for each segment, since you’ll want to know which guests bring in the most revenue for the least amount of resources.  With that information plus data generated during a guest’s stay, you can create guest personas using demographic information and spending patterns.  After you’ve created your guest personas, you’ll be able to evaluate how to create promotions and price rooms in ways that are specifically tailored to those guests. 

Step Three: Positioning Your Property for Success

The final step in the STP process is ensuring that your hotel is in the best possible market position for success.  In a nutshell, positioning is the implementation of your targeting strategy by creating the image your ideal guest expects.  You’ll want to make sure that your future guests see your property as their best choice, so it’s critical to create the impression that you not only offer value but a personalized guest experience for your target segments.  For example, a luxury hotel may want to promote their ancillary services, like their spa and room service.  A hotel that has a significant corporate traveler segment would instead look to promote their meeting rooms and offer group rates.

The STP model is an excellent way to position your property to the best guests for the most return.  In today’s ultra-competitive hospitality industry, it’s more important than ever before to speak directly to those guests with carefully selected experiences and promotions that suit their needs.  Today’s travelers demand custom experiences that not only are unique, but are also competitively priced.  By using an advanced RMS system, you’ll be able to effectively identify and market to the guests who will provide the highest returns.

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