Enhance Your Forecasting Strategy For Effective Revenue Management
The ability to forecast demand accurately is the base of all successful and effective revenue management strategies. Forecasting allows your hotel to assess potential risks and opportunities, anticipate future demand, price accordingly and align resources to maximize revenue. But in order to have a truly accurate and effective forecasting strategy, it is not enough to simply keep a record of past performance data and industry trends. Keep reading to discover how to optimise your forecasting strategy.
Break Down Pace Reports
Before the Revenue Manager can effectively forecast, they must first delve deep into their data. You can click here for our recent post on how to optimise your data use. Avoid a pricing catastrophe and focus on room mix pace rather than occupancy pace. Compared to last year, your hotel may be performing the same occupancy wise, but the rooms being occupied may be your least profitable ones. This could be due to economic conditions including FX rates or your superior rooms may be overpriced. Breaking down this Pace Report will highlight the revenue metric that really matters to your pricing strategy and help you find the right combination of guests in your hotel.
Split Pace Reports Among Week Parts
By splitting pace reports among week parts, you will be able to see whether one week part is dragging down the other. It is normal for your weekends to be a busier time than week-days. However, this split pace report will allow you to see if it is to an excessive amount. Once you have access to this data you can make rate adjustments accordingly. Consider flexing the rate or creating a package to promote shoulder night stays.
Exceptional Events & Human Judgement
It is important to take note of events that effected occupancy rates in a way that was uncharacteristic for the season. This is where human judgement comes into place. Rather than comparing exact dates, compare similar special periods, for example school holidays or bank holidays, as they can differ from year to year. This will reveal more accurate shifts in patterns and allow you to better manage your rate tactics.