Get a watermark-free, fully customizable customer segmentation in our business plan for a short-term rental business
Knowing who stays at your property is essential for any thriving short-term rental business.
Let us walk you through the essentials of customer segmentation, helping you to understand and categorize your guests to enhance their experience and your marketing strategies.
By identifying the diverse needs and preferences of your guests, you can fine-tune your rental offerings, ensuring that your property isn't just a place to stay, but a memorable part of their journey.
And if you're looking for a head start on segmenting your clientele, take a look at our customizable business plan template designed for short-term rental ventures.
What is exactly a "customer segmentation"? Should you make one for your short-term rental business?
Customer segmentation is the practice of categorizing your short-term rental business's potential and current guests into distinct groups based on common characteristics.
Think of it as drawing a detailed portrait of who your guests are, from basic demographics like age and travel purpose to more specific interests such as preferred amenities and the type of experiences they seek. The aim is to grasp the varied requirements and behaviors of your guest pool so you can customize your properties, services, and promotional efforts to resonate with each unique segment.
Why do short-term rental owners and marketers invest time in customer segmentation? Simply put, not all guests have the same needs or wants.
Different groups may seek different experiences, amenities, and reasons for choosing your rental over another. By pinpointing these segments, you can adapt your property's features, guest services, and marketing strategies to connect directly with what each group is looking for.
For instance, a segment of business travelers might prioritize fast Wi-Fi and a quiet workspace, while a segment of families might appreciate a rental with a fully equipped kitchen and proximity to attractions.
The advantages of effective customer segmentation, similar to what you would find in our business plan template tailored for short-term rentals, are significant and impactful. It leads to more focused marketing, which can result in better booking rates and more strategic use of advertising budgets.
Customizing your rental offerings to align with the specific preferences of different guest segments can boost satisfaction and repeat bookings. Plus, understanding your guest segments can inform property upgrades, amenity offerings, and service improvements, making your rental a top pick for a variety of travelers.
Should you engage in customer segmentation if you're launching a new short-term rental venture? Absolutely.
Knowing who your guests are and what they expect from the start can provide you with a considerable advantage. It allows you to shape your rental offerings, amenities, and marketing plans with a clear focus on fulfilling the needs of your target segments. This targeted approach can help you swiftly build a loyal guest base and stand out in the competitive short-term rental market.
Is customer segmentation useful for you? Undoubtedly. Whether you're in the initial planning phase or aiming to expand an existing rental operation, understanding the different segments within your guest base is crucial to making savvy decisions. It affects everything from the types of promotions you run to the way you communicate with guests.
Moreover, customer segmentation isn't just a one-off endeavor; it's a continuous process. As travel trends shift and your business grows, regularly reviewing and updating your guest segments can ensure that your short-term rental continues to cater to the evolving preferences and expectations of your guests.
How to segment customers for your short-term rental business?
To create customer segments for your short-term rental business, begin by examining your guest data to uncover trends and shared characteristics, such as travel purposes, group size, and booking patterns.
Next, categorize guests into segments based on these commonalities to customize your communication, promotions, and property offerings to meet the distinct needs and preferences of each group.
To streamline the process for you, here is a 10-step action plan to develop a meaningful customer segmentation for your short-term rental business.
| Step | Action | Details |
|---|---|---|
| 1 | Collect guest data | Gather information through booking platforms, guest feedback, and direct communications. |
| 2 | Examine booking trends | Analyze when and how often guests book, and the duration of their stays. |
| 3 | Identify demographic details | Group guests by age, nationality, language, etc. |
| 4 | Consider travel motivations | Classify guests by their reasons for travel, such as business, leisure, or events. |
| 5 | Assess geographic origins | Segment based on where guests are traveling from. |
| 6 | Create guest personas | Build profiles for each segment to better cater to their preferences. |
| 7 | Determine guest value | Assess the profitability and lifetime value of each segment. |
| 8 | Select priority segments | Decide which segments to focus on, aligning with your business strategy. |
| 9 | Customize engagement strategies | Develop targeted communication and promotional plans for each segment. |
| 10 | Review and adjust segments | Continuously evaluate and refine segments to reflect evolving guest behavior and market conditions. |
What are some examples of audiences and customer segments for a short-term rental business?
Below is a table with 10 examples of customer segments for a short-term rental business.
| Name of the Segment | Description | Preferences and Budget |
|---|---|---|
| Vacationing Families | Families traveling together looking for a comfortable space that can accommodate children and provide a home-like environment. | Medium to high budget, prefers rentals with multiple bedrooms, kitchen facilities, and kid-friendly amenities. |
| Business Travelers | Professionals traveling for work who need a quiet, convenient place to stay with amenities that support productivity. | Medium to high budget, prefers rentals with Wi-Fi, workspaces, and proximity to business centers. |
| Weekend Getaway Couples | Couples seeking a short, romantic retreat often looking for cozy and intimate accommodations. | Medium to high budget, prefers rentals with unique or luxurious features, such as a hot tub or scenic view. |
| Adventure Seekers | Individuals or groups looking for accommodations near outdoor activities or attractions. | Varied budget, prefers rentals that offer easy access to adventure sports, hiking trails, or water activities. |
| Budget-Conscious Travelers | Travelers who prioritize savings and are looking for the most cost-effective lodging options. | Low budget, prefers basic, clean, and functional accommodations without luxury amenities. |
| International Tourists | Visitors from abroad looking for short-term stays that offer a local experience and convenience. | Varied budget, prefers rentals that provide local insights, are close to tourist attractions, and possibly offer language support. |
| Digital Nomads | Remote workers who travel while working and need long-term stays with reliable internet and a comfortable setting. | Medium budget, prefers rentals with high-speed internet, a dedicated workspace, and a quiet environment. |
| Event Attendees | Guests in town for events like conferences, festivals, or weddings, often looking for short stays close to the event venue. | Medium budget, prefers rentals that are conveniently located near event locations and have flexible check-in/out times. |
| Relocation Clients | Individuals or families in the process of moving who need a temporary place to stay during the transition. | Medium to high budget, prefers rentals that feel like a home, offer privacy, and can accommodate longer stays. |
| Group Travelers | Friends or larger groups traveling together looking for a space that can accommodate everyone under one roof. | Varied budget, prefers rentals with multiple bedrooms, large living spaces, and amenities that facilitate group activities. |
Examples of customer segmentation for a short-term rental business
Below are three different (very concise) examples of customer segmentations tailored for a short-term rental business, such as vacation homes, city apartments, and unique accommodations.
Vacation Home Rental Customer Segmentation
| Customer Segment | Characteristics |
|---|---|
| Family Vacationers | Seeks spacious and kid-friendly accommodations, values amenities like kitchens and laundry facilities. |
| Outdoor Enthusiasts | Looks for rentals close to nature and outdoor activities, may require storage for equipment and gear. |
| Remote Workers | Desires a comfortable space with reliable Wi-Fi and a work-friendly environment for extended stays. |
| Weekend Getaway Couples | Interested in cozy and romantic settings, often looks for added luxuries or unique experiences. |
City Apartment Rental Customer Segmentation
| Customer Segment | Characteristics |
|---|---|
| Business Travelers | Values central locations with easy access to business districts, prefers modern amenities and minimalistic design. |
| Cultural Explorers | Seeks accommodations in vibrant neighborhoods, close to cultural landmarks and local eateries. |
| Event Attendees | Looks for rentals near event venues, such as conferences, festivals, or concerts, often books last-minute. |
| Shopping Aficionados | Interested in staying close to shopping areas, values convenience and proximity to retail hotspots. |
Unique Accommodations Rental Customer Segmentation
| Customer Segment | Characteristics |
|---|---|
| Adventure Seekers | Looks for unconventional stays like treehouses or yurts, values a blend of comfort and thrill. |
| Eco-conscious Travelers | Interested in sustainable and eco-friendly lodging options, appreciates green initiatives and natural settings. |
| Special Occasion Groups | Seeks memorable and photogenic spaces for events like birthdays, anniversaries, or retreats. |
| Wellness Retreaters | Desires tranquil accommodations conducive to relaxation and rejuvenation, such as spa services or meditation spaces. |
You can also read our articles about:
- how to fill a Business Model Canvas for your short-term rental business
- how to study the competitors of your short-term rental business
- how to elaborate a marketing strategy for your short-term rental business
- how to offer short-term rental accommodations (guide)