One of the key points in revenue management is the segmentation of markets. As such, Paraty Tech is launching its first market study and it positions the business tourist segment as one of those with the greatest capacity to generate income in specialised destinations.
This research project, developed by the Paraty Tech Communications Team in collaboration with Dr Ángel Millán Campos (University of Castilla-La Mancha), is structured around the profile of this type of user and it considers their age, gender, emotions, professional category and trip planning procedures, among other aspects. It aims to be a support tool in the strategic decision making process of urban hotels.
Although a part of the research project will be published in the special March edition of the Hosteltur magazine on technological innovation, we wanted to give you a sneak preview of some of the results obtained, presenting a segmentation of business travel, which is reached following a latent class analysis.
Through this latent class analysis, Paraty Tech examines the heterogeneity of the behaviour of the business tourist and groups business tourists in sample depending on different characteristics in order to obtain internally homogeneous segments and collectively heterogeneous segments.
The segmentation variables used were the emotions experienced by the business tourist during displacement, their intent to purchase or intent to recommend the destination after their trip, and overall satisfaction with the destination. In addition, other business tourist variables were considered, such as age group, gender, average daily spend, job post, duration of displacement, composition of tourist group and whether the tourist visited the destination.
The characteristics of the four groups identified are detailed below:
This is the largest group, representing 31.06% of business tourists. These travellers show a greater level of overall satisfaction with the destination and, together with Group 4, are those who show greater loyalty to the destination visited. In addition, they are the group of tourists who experience the positive emotions of ‘happy’, ‘positively surprised’ and ‘entertained’ with the greatest intensity during displacement.
With regards to the reason for displacement, 34.03% state they were travelling for meetings. This is also the group with the highest percentage of incentive tourists (13.5%). As far as composition of the tourist group is concerned, 49.05% confirm they were accompanied by a work colleague on their trip. 70.4% visited the destination and, finally, in relation to tourist spending this is the group that obtains the highest percentages in expense intervals over €301 per day.
In terms of socio-demographic variables, this group has a higher percentage of individuals from Generation X (57.4%) and a higher percentage of women (50%).
This group amounts to 28% of the sample. In general terms, this group appears unsatisfied, showing lower probabilities of returning or recommending the destination, although the intensity of the positive emotions experienced during displacement is high for the emotions ‘happy’ and ‘entertained, and low for the emotion ‘positively surprised’.
The intensity of the negative emotions experienced during trips is low in the relation that is established for both ‘disappointed’ and ‘angry’. This is the group that experiences these emotions with the lowest level of intensity.
With regards to the characteristics of displacement, 54.4% state they were travelling for individual business tourism, 51.7% say they were accompanied by a work colleague, and 67.7% visited the destination. In terms of average spend, this is the group with the highest percentage in the lowest daily spend interval of ‘Less than €200’ (41.9%).
Regarding the socio-demographic variables, this is the group with the highest percentage of individuals from the baby boomers generation (24.8%). This group is mainly comprised of men.
This group encompasses 25.2% of the sample. They feel unsatisfied with the destination visited and show a low probability of returning or recommending the destination. In addition, this is the group that shows a higher intensity in the negative emotions experienced during displacement, and a lower intensity in the positive emotions experienced during the trip, with the exception of the emotion ‘entertained’, which is experienced with a lower intensity by Group 4.
As far as the characteristics of displacement are concerned, this is the group with the highest percentage of fair tourists (29%). It is also the group with a higher probability of the business tourist travelling alone (72.2%). In addition, it is the group with the highest percentage of tourists who did not visit the destination (56.5%). The average daily spend is situated between €201 and €300, with a probability of 41.2%, and it is the group with the lowest percentage in average daily cost over €401 (1%).
In terms of socio-demographic variables, this group is mainly formed by individuals from Generation X (45.8%) and it is the group with the highest percentage of men (72%).
This is the smallest group, representing 15.1% of the sample. It is one of the groups that is most satisfied with the destination and, together with Group 1, is the group that is most likely to return or recommend it. However, it is one of the groups that experiences positive emotions with less intensity and, on the other hand, which experiences negative emotions with greater intensity.
With regards to the characteristics of displacement, this is the group with the highest percentage of individual business tourists (59.8%). 61.8% of these business tourists confirm travelling alone while 40.8% stated they did not visit the destination. The probability of average daily spend with the highest percentage is in the interval defined as ‘between €201 and €300’ (45.6%).
Regarding socio-demographic variables, this is the group with the highest percentage of tourists from Generation Y (40.4%). In terms of gender, this group is comprised mainly of men (60%).