Identifying the target segment is the basis of developing efficient market segmentation strategies and efficient market segmentation is vital in an industry that is becoming increasingly competitive, as in the case of international tourism. In Austria, hotels in higher star grading categories have addressed this need through systematic market research designed to identify the needs of their consumers. Not so the hotels in the one- and two-star category: these typically do not segment the market and tend to assume that increasing their star grading will lead to increased market demand instead of investigating the specific needs of tourists who very consciously choose low star graded hotels. This paper aims to examine this a priori segment with regard to issues that are known to influence choice behaviour, namely expectations, disappointments with past experiences and perceived risk, while taking into account information need and processing habits. The ultimate purpose of the study is to stimulate development of a segment-oriented marketing strategy for one and two-star hotels should this guest segment differ significantly from that comprising tourists staying in higher-graded hotels.