Using revenue management data science is crucial, especially during the pandemic period.
NB: This is an article from Hotelogix
Previous hotel revenue management strategies can no longer be used as a guideline as the travel industry’s rebounds and restrictions continue to wreak havoc. This is making the new normal for the hospitality business particularly challenging. Hospitality analytics must be measured and broken down in a new way to form predictions based on demand after rebounds happen.
Subscribe to our weekly newsletter and stay up to date
However, the initial data points are losing their relevance as new Covid waves create their own trends and time continues. This means constant attention to updated data instead of relying on what happened last year during the same time.
Disregarding these old approaches means making use of new forward-looking data points for hospitality analytics.
This article will highlight data analysis in the hotel industry and how we can leverage it for preparing for restrictions and rebounds.
Analyzing Data Science and the Hospitality Industry
Analyzing new sets of data becomes the most important factor regarding the pandemic and how to navigate it. Listed below are new data points you should be taking advantage of for hotel market data analysis in the hotel industry.
Changing Travel Behavior
The pandemic has created new demand disruption for hotel owners. Traveler behavior is now regulated by government policy and enforced restrictions. These restrictions have constantly been starting and ending since the beginning of the pandemic all over the globe.
These unstable conditions make it challenging to forecast the hospitality atmosphere. If you want to have an understanding of demand, owners and corporations must evaluate their government’s specific travel restrictions.
Travelers aren’t certain when they’ll be able to travel again, so the booking window is much smaller. Many times travelers are booking shortly before arrival, making OTB data less relevant to predicting than it was before.
There are signs that this is changing in several markets. Hesitating to travel internationally has also created a sharp increase in domestic tourism and vacations. This means traveler search data has changed as well.
Since corporate travel is paused in most countries, at least on a large scale, the demand has moved almost exclusively to leisure and vacation reservations. With less demand and supply remaining unstable, competition is even harder.
Plus, with safety and social distancing concerns still fresh in the minds of travelers, hotels are competing against more private, alternative options. These alternative options have experienced an increase in demand compared to normal hotels.
There are a range of various factors to consider, meaning commercial teams have had to remain agile and develop a strategy just to survive. When owners begin to budget for 2022, there needs to be some type of light at the end of the tunnel.
Vaccine programs are expanding globally, and this has allowed many economies to reopen. Restrictions have been relaxed, and domestic leisure travel is resuming with good news for the travel industry.
However, quickly glancing at the news will tell you it’s not that simple. There are also variant strains that regularly surface, causing new government restrictions that change quickly. A prime example of this is Portugal. They moved to the UK’s green list for travel, which caused demand to shoot through the roof. However, they were removed from the list less than a month later, which crippled the travel industry there once more.
It’s not clear how long the current situation will remain, but as long as it does, the demand will continue to be unpredictable. During times of this instability, the best approach is to rely on healthy forecasting using hotel analytics software.
Using Forward-Looking Data to Forecast Accurately
Anyone in the corporate hospitality world hasn’t experienced anything like Covid in their history. Travel has been dictated solely by government policy, combined with a depleted global demand. This means old metrics revenue teams use to analyze their business and make decisions are no longer useful.
A huge element of the budget process relies heavily on forecasting and predicting. Now that we’re at a critical stage, when budgets have shrunk and can’t be misused, there’s a huge challenge. How can you make accurate projections when traditional methods and data points aren’t effective?
Hotel owners have had to try and transition from predicting demand models based on normal data to different methods, such as rolling short-term forecasts and using forward-looking data. When markets change rapidly, hotel revenue management software becomes crucial.
When you harvest data from several sources, it reveals the true signs of traveler intent for your market segment. Understanding forward-looking demand data and traveler intent is important for creating realistic forecast models during the budget season.
When live demand projections are 365 days in advance, owners can take a look at source market data to understand who desires to travel to a specific destination. Armed with the right insights on the booking window and length-of-stay, owners can apportion the budget to sales and marketing campaigns that target precise dates, LOS, and segmented demographics.
When you look into the future and make comprehensive plans, this is the best course of action. When forward-looking data insights are readily available, it’s much easier to craft different scenarios and contingency plans. Commercial teams may be more prepared for several situations by creating best and worst-case outlooks.
This gives a broad picture of revenue at costs across different levels of occupancy and with different demographic segments. In turn, this produces quicker and more assertive decision-making.
Medium and long-term forecasts are critical elements to keep revenue on the desired path. When the market is unpredictable, you need to react to demand changes instantly when they happen. You can seize opportunities to drive revenue by being on top of your game.
Another rebound is looming, but a return to pre-Covid demands will take some time to materialize. Certain international markets will reopen at different speeds and with different restrictions in place. These openings and restrictions will be based on vaccination levels, government travel policies, and the resumption of business travel. It’s crucial that you’re equipped to analyze all of the previously mentioned metrics to navigate the storm of Covid.
This must be a constant new understanding of new elements, as the next restrictions and rebounds may exhibit a new set of data metrics that are more relevant than the previous. What does this do for the hospitality industry? Well, it essentially makes decades of data useless when it comes to forecast and prediction models. However, the substitution of technology and AI can be sufficient in this case.
