Segmentation has been widely studied in tourism research e.g. Dolnicar (2004). Dawley (2006) points that commonly used segmentation variables such as demographics lead to identifiable segments which are not actionable while other useful approaches e.g. psychographics, are actionable but not identifiable. The objective of this paper is to develop a two-stage linkage approach to segmentation whereby cluster analysis using psychographic variables is conducted within demographic group. Demographic groups are selected based on propensity to travel. This research utilizes data generated from a cross-sectional self-completed survey of 49,105 Australian respondents on travel and tourism. The managerial usefulness of this segmentation is assessed. Clearly segments can be directly linked both demographically and psychographically.