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The article deals with the development of principles concerning new market segments, the importance of this process within modern market relations and the usage of tier strategy. Under these conditions, the forming of an adequate perception of competitive threats and advantages caused by a strong competitive struggle, unstable demand, and change of demands to the quality, quantity and types of services is an important issue. Market segmentation of hotel services has been investigated as the base of determination of the goals which will be the objects of further marketing investigations. The assessment of segmentation criterion has been made in the next way: segment capacity, segment essentiality, segment availability, segment profitability in the light of overall performance and protection of a segment from competition. The role of geographical criteria of market segmentation of hotel services and the meaning of a structure of commercial activity of a region has been examined. The dynamics of the regional development regards to ―undeveloped‖ hotel market in a stable region or in that one which is reduced. Demographic segmentation is a market allocation into groups; it is often called variables which describe the situation with market segmentation. This criterion is widely used in tourism because of its unambiguity and easy performance of statistic processing. Recently, essential social and demographic changes have been made and these changes influence the style of entertainment and forms of rest. They create new segments of hotel market causing changes according to requirements in existing segments. The author has investigated psychological segmentation criteria which are the base for goal setting which will change into objects of marketing investigations in future. The choice of a market niche on the modern stage of market relations is one of important aspects in marketing of hotel industry.

TIER STRATEGY – AN EFFECTIVE MARKETING INSTRUMENT IN HOTEL INDUSTRY