Does the 80/20 Rule Apply to Hotels?

The 80/20 rule dates back to 1896, when Italian economist Vilfredo Pareto noticed

something curious. Around 80% of Italy’s land was owned by just 20% of the population. He then spotted the same imbalance everywhere:

·       80% of peas in his garden came from 20% of the pods

·       80% of Italy was owned by 20% of the population, a pattern he noticed in multiple countries

Pareto didn’t set out to help hoteliers run better businesses, but he accidentally gave hospitality one of its most powerful strategic lenses.

Why Pareto Would Have Loved Hospitality

Hotels are a perfect real-world example of Pareto’s principle. A small group of guests:

·       Drive the majority of repeat revenue

·       Influence brand perception

·       Generate referrals and advocacy

·       Require less selling, discounting and persuasion

Pareto’s insight was about understanding where impact really comes from and allocating attention accordingly.

From Economic Theory to Hotel Strategy

What Pareto observed over a century ago now plays out daily at front desks, in loyalty reports and in repeat guest lists. The question isn’t whether the 80/20 rule applies to your hotel. It’s whether you’re:

·       Identifying the right 20%

·       Recognising them consistently

·       Designing experiences around their expectations

·       Protecting relationships that quietly protect your revenue

Because once you see the pattern, you can’t unsee it.

Technology Makes the 80/20 Visible

Modern guest intelligence platforms make the 80/20 rule actionable. They help hotels:

·       Identify high-value and high-influence guests early

·       Build richer profiles that evolve with every stay

·       Connect behaviour, preferences and context

·       Alert teams to moments that matter

This isn’t about favouritism, it’s about focus. When teams know who sits in that top 20%, they can deliver:

·       Seamless recognition

·       Thoughtful personalisation

·       Fewer friction points

·       Experiences worth sharing

And that’s when word of mouth accelerates.

Why the 80/20 Rule Changes How Word of Mouth Should Be Managed

Word of mouth doesn’t scale evenly. One influential guest recommending your hotel to their inner circle can outperform:

·       Hundreds of anonymous online reviews

·       Thousands in paid media

·       Countless OTA impressions

This is where technology becomes strategic, not operational. By identifying and understanding that vital 20%, hotels can:

·       Focus personalisation where it has the greatest return

·       Invest time and resources with intention

·       Design moments that trigger organic advocacy

·       Build loyalty that compounds over time

Not all guests drive growth equally and that’s okay. The opportunity is knowing which ones do.

Why Word of Mouth Matters More Than Ever

Today’s guests don’t just trust reviews, they trust people.

·       A recommendation from a CEO to another CEO

·       A founder sharing a stay with their network

·       An influencer mentioning a hotel without being paid.

These moments drive:

·       Higher-value bookings

·       Longer stays

·       Lower price sensitivity

·       Greater loyalty

One influential guest can quietly outperform thousands in ad spend, if the experience gives them something worth talking about.

The Invisible Force Filling Hotel Rooms: The Power of Word of Mouth

In an industry obsessed with algorithms, attribution models and booking windows, the most powerful sales engine in hospitality still can’t be bought.

·       It’s whispered over dinner

·       Shared in a WhatsApp group

·       Posted casually on LinkedIn, Instagram or a private members’ forum.

Word of mouth doesn’t shout it persuades, and when it works, it doesn’t just fill rooms. It builds reputations, attracts the right guests, and compounds value over years, not nights.

The Real Risk: Ignoring the 80/20 Rule

The biggest drawback isn’t adopting this mindset, it’s ignoring it. Hotels that fail to recognise their most valuable guests risk:

·       Losing them quietly to competitors

·       Becoming interchangeable

·       Competing only on price

·       Spending more to earn less

The 20% don’t complain loudly, they just don’t come back.

Call to Action – Start Knowing Better

Vilfredo Pareto gave the world a principle. Modern hotels now have the technology, data and insight to act on it. Ask yourself:

·       Do we know who our most influential guests really are?

·       Are we building profiles that grow smarter with every stay?

·       Are we designing experiences the right people want to talk about?

The future of hospitality won’t belong to the hotels with the biggest marketing budgets. It will belong to those who understand that a smaller number of the right guests can drive extraordinary results.

Because when you win the 20%, the 80% tends to follow. Start understanding the ones who matter most, because the future of hospitality won’t be built by the many, it will be shaped by the few and how well you treat them.