ABSTRACT
This chapter examines the strategy of niche marketing for competitive advantage in the consolidation phase of the 1990s hotel market. It tracks the evolution of segmentation strategy in the U.S. hotel market from price segmentation to integrated niche marketing. Different types of segmentation used in both the U.S. and Caribbean hotel markets are cited as examples of successful segmentation and niche marketing in the hotel industry. Benefits and liabilities associated with niche marketing are summarized. The need for empirical support for the selection of a target niche is emphasized using different types of market research. The chapter concludes with a review of four niche selection methods for hotel managers and owners. These methods include the following:
Adapt and modify a successful segmentation formula.
Use your hotel guest history/database to profile your best customers.
Identify segmentation gaps in your local market
Contract with a reputable consulting firm to do a segmentation study.
