How to catch your market niche?

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How to catch your market niche?

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Published on September 17, 2015

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Erast Tverdov

CEO at Hospitality Sale Consulting

“Be in the right time in the correct place” is one of the most important rules of the success business model. It does not matter is it a new hotel or long time existing property, because market does not the permanent system. It goes ahead every time and it’s changing all the time. Be in the main stream is very important for the players, especially for those of them who has no money push up from the owners and have to make the budget from the the income only.

Current financial situation does not really matter, we are talking about the result what will be visible in the next 2 or 3 months. So, the question is how to predict the situation is going to be?

Basically, we have the simple model of tourist wallet. In average most of travellers divide their holiday budget for three annual parts: 30 % they spend to the tickets to the holiday destination, another 30% is the accommodation expense and last 30 % are going to shopping and restaurant facilities. It is mean that hotel can get all accommodation money and around the half of the last 30 % in case if extra revenue department is really well done working. So, it becomes look like predictable.

Use the tickets on-line systems are the easiest way to check the price. As the result you will know amount of third part of customer wallet. But keep in mind it’s not enough to do it just once, because most of the airline companies have dinamic price structure. That’s why it is really necessity to do permanent monitoring , because only if you have price history, you can understand the passengers volume at each period of time. Air tickets sales are started from the low prices and become more and more expensive according the volume available seats in the aircraft. So, if you know the first rates you can figure out the average quantity of tourists, what could have the correlation with your market volume. At the same time the tickets price show us the hospitality price segment wich is attractive at that date, because if customers spend this amount for the ticket, he is going to have same price category accommodation.

Pricing is the instrument how to reach out exact your customers niche, what you have chosen for your property according the quality and market positioning. That could be the reason why at the time when the customers quantity goes down the discount strategy could works not better and could be falls, instead of strategy of increase the price and change the market niche, because the premium segment could be much more stronger against market changes.

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