The study aimed at determining the impact of domestic tourist behavior on the hotel demand; and also on the segmentation of the domestic tourism market into small segment to facilitate dealing with each separately as a target market for increasing hotel demand. The field study was conducted through interviews with marketing and sales managers in four and five star hotels in Cairo, Sharm El Sheikh, Luxor and Aswan. The results concluded that domestic tourist behaviors positively affect domestic tourism demand in the hotels, and also affect the division of the domestic tourism market in hotels. The study recommends to understand the behavior of domestic tourists by the tour guides, and to divide the domestic tourism market in a way that meets the desires of domestic tourists hotel, and tointensify tourism awareness campaigns in cooperation with all parties concerned with tourism.