Understanding the target market for luxury hotels is essential for any hotelier looking to stand out in a competitive industry. To effectively attract high-end guests, it’s crucial to know who your ideal customers are, what they seek in a luxury stay, and how to tailor your marketing strategies accordingly.
In this article, we’ll break down key target markets for luxury hotels and offer insights on how to cater to their unique needs and preferences.
Luxury Hotel vs. Luxury 5-Star Hotel
Both luxury and luxury 5-star hotels offer high-end services and exceptional experiences, but the main difference lies in official recognition and exclusivity.
A luxury hotel provides premium services and unique experiences but may not have a 5-star rating. The term “luxury” is subjective, based on branding and guest perception.
In contrast, a luxury 5-star hotel meets or exceeds the strict criteria set by rating bodies like the AA or Forbes, while also offering bespoke services, privacy, and exclusivity. These hotels deliver a truly personalised, high-end stay.
While both appeal to affluent travellers, the luxury 5-star hotel offers the added assurance of a formal rating, alongside an exclusive and tailored experience.
Understanding the difference between luxury and 5-star luxury is important as it helps tailor marketing strategies and meet the distinct expectations of each target market.
Create Personas
To understand your target market, create detailed personas using tools like Google Docs or Microsoft Word. These should be based on real-life demographics, including likes, dislikes, and specific traits.
This exercise helps your team brainstorm ideas and develop strategies to effectively market to each persona.
Let’s explore the target markets for each category in more detail.
Luxury Hotel Target Markets Examples
Special Occasion Celebrants
Targeting those celebrating milestones—such as anniversaries, birthdays, engagements, weddings, and reunions—can be highly rewarding. These guests are often willing to spend extra to create lasting memories.
Examples of special occasions:
- Anniversaries
- Wedding Anniversaries
- Birthdays
- Engagement party
- Weddings
- New Years
- Reunions
By identifying key details like their age range, social media habits, and preferences, you can create tailored advertising and marketing strategies.
Wellness Enthusiasts
A wellness enthusiast is someone who places great importance on their physical, mental, and emotional well-being.
The wellness market is massive and continues to grow, with the USA to have reached $480 billion in 2024. Globally, forecasts suggest the wellness market could soar to an incredible $9 trillion by 2028!
Examples of Wellness Categories:
- Spa and Relaxation
- Fitness and Movement
- Detox and Cleansing
- Mindfulness and Meditation
- Holistic Healing
For luxury hotels, catering to the needs of wellness enthusiasts represents a significant opportunity. By offering services that align with their wellness goals, you can tap into a lucrative market of guests willing to invest in their well-being.
High-Net-Worth Individuals
The official definition of a high-net-worth individual (HNWI) can vary by country. In the UK, HMRC defines an HNWI as someone with assets worth over £10 million.
However, you know your hotel, your pricing, and your guest history. If your hotel doesn’t cater to the official HNWI bracket, you can create your own definition. For example, you might define an HNWI as someone earning £150K a year. It’s crucial to know this distinction, as marketing to someone earning £150K differs greatly from targeting a guest with assets over £10 million.
Here are examples of some HNWIs:
- Entrepreneurs
- High-end travellers
- CEOs and top executives
- Business Owners
- Celebrities and influencers
- Royalty and high-profile dignitaries
- Wealthy retirees
- Doctors and Medical Specialists
- Legal Professionals
Collaborate with your team to research the ideal HNWIs you want to target, and develop a focused marketing strategy that allows you to reach them efficiently and effectively.
Luxury Travellers
Not everyone who seeks out luxury hotels is an HNWI.
The audience could include young professional couples, families or individuals with disposable income from higher salaries or savings, or someone who has saved up for a once-in-a-lifetime getaway. Some might be regular luxury travellers, while for others, it’s a rare treat. There are many different groups drawn to luxury hotels.
That said, there is often some overlap between HNWIs and luxury travellers, as both appreciate high-end experiences, though their motivations and budgets may vary.
Example of luxury travellers:
- Young professional couples
- High-earning professionals
- Families with disposable income
- Retirees seeking premium experiences
- Culinary tourism enthusiasts
- Affluent solo travellers
Consider whether to focus your advertising on luxury travellers who book a luxury hotel once every five years or target markets that book luxury hotels more regularly.
Social Media Influencers and Content Creators
Many influencers and creators, not just those in the travel niche, love sharing their luxury hotel stays due to the large social media following for luxury lifestyles. By sharing lifestyle shots, they attract followers and boost their earnings.
While this doesn’t bring direct revenue initially, the value lies in the content they create. Influencers post videos, photos, and stories about your hotel, which can reach thousands, even millions of followers. This boosts brand awareness, increases your social media presence, and ultimately drives more bookings.
Examples of Influencers and Creators:
- Travel Influencers
- Lifestyle Influencers
- Food and Drink Influencers
- Fashion and Beauty Influencers
- Fitness and Wellness Influencers
- Luxury and High-End Experience Influencers
Some macro or mega influencers may take holidays or weekend breaks for leisure. However, most influencers will expect a complimentary stay in exchange for promoting your hotel on their channels.
Corporate Travellers
While executives like CEOs and CFOs were covered in the HNWI section, there’s also a market for businesses seeking hotels for their employees. This includes booking accommodations, arranging board meetings, or hosting annual company events.
The advantage is that if a business frequently operates in your area, your hotel could become their go-to choice for all company stays and events.
You’re targeting businesses, but the individuals you could focus on are:
- Corporate Travel Managers
- HR Departments
- Executive Assistants
- Procurement Officers
- Event Planners
- C-suite Executives
To stand out and become the go-to hotel for corporations, you’ll likely need to offer incentives, like discounts on stays.
Accommodating Needs Of Your Target Market
When marketing to your target audience, attracting them is just the beginning. To succeed, you must deliver the right amenities, facilities, and services that align with their expectations. In our article on Special Interest Tourism, we explore how catering to specific interests and passions can elevate the guest experience.
For example, if you’re targeting business executives, offering meeting rooms, fast Wi-Fi, and flexible check-in times is essential. For wellness enthusiasts, a high-quality spa, fitness centre, and healthy dining options will be key. If you’re aiming for families, make sure you offer family-friendly services, such as spacious rooms, child care, and activities for all ages.
Understanding your target market’s needs and aligning your hotel’s offerings accordingly will not only attract guests but also ensure their experience meets or exceeds expectations, turning them into repeat customers.
Conclusion
In conclusion, understanding and targeting the right market segments is crucial for your luxury hotel’s success. By aligning your offerings with the needs of your target audiences, you can ensure a memorable experience that keeps them coming back.
At Smooth Rentals, we can help you not only craft a tailored marketing strategy but also enhance your online presence to attract the right guests. Let us guide you in making your hotel the preferred choice for luxury travellers.
