Geographic segmentation refers to grouping consumers based on where they live. Because a city is a product that the consumer must travel to consume, it makes sense to include geographic segmentation along with any other chosen method. The reason for the importance of tourism marketers' considering geographic segmentation is that promotional media is usually tied to a certain geographic area or market. The larger the geographic segment chosen, the more media coverage that will be needed and the more expensive the promotion will be. For this reason it makes sense to determine early in the segmentation process the geographic limits of promotional efforts.

This realistic approach to geographic segmentation also makes sense because the further from the city the potential tourist lives, the more expense and time involved in traveling. Therefore to attract tourists from a distance, the city's core product must be unique. On the other hand, if what the city has to offer is unique and attractive to a lifestyle or interest group, it may be appropriate to target members of this specific psychographic segment no matter where they live.

Tourism marketers can use geographic segmentation to target only the surrounding communities. This limited approach is wise for a small town trying to attract only a few additional visitors to attend the local arts fair. However, tourism marketers may also use geographic segmentation to target the entire state or even a region that encompasses neighboring states. Larger cites can even decide to use national geographic segmentation.