Question for Our Revenue Management Expert Panel:

What information is most important to hotels when forecasting? What data should be prioritised by revenue management teams? (Question proposed by Daniel Feitosa)

Industry Expert Panel

Our Industry Expert Panel exists out of professionals within the hospitality & travel Industry. They have comprehensive and detailed knowledge, experience in practice or management and are forward-thinking. They are answering questions about the state of the industry. They share their insights on topics like revenue management, marketing, operations, technology and discuss the latest trends.

Chaya Kowal
Chaya KowalDirector of Revenue Management, Potato Head Family

“Pre-pandemic and post-pandemic forecasting differ a little in the sense that past data is not really relevant anymore. Past data and segmentation have been the foundation for so many revenue managers and sales teams I know and they used to be an important factor to be taken into consideration for forecasting.

Forecasting has also become even more important nowadays as many hotels are running with reduced staffing and this will allow operations teams to better plan their schedules.

Right now, we are dealing with a very volatile market, and trends are not consistent at all. Travel restrictions are being constantly changed/ updated – which also affect the consumer behavior. Therefore decision-making in terms of pricing and strategy can be a challenge for many revenue managers these days.

I can’t say that there is one most important piece of information for forecasting. Revenue Management is the efficient utilization of data from different sources to be able to take correct pricing and forecasting decisions.

The basics, of course, stay the same: on the books, demand, future trends, lead time, pickup, length of stay, holidays, special events, general seasonality, nationality seasonality, segments, group business, corporate business (mainly for city hotels), search traffic for the destination / for the area where the hotel is located, brand website traffic, OTA insights on market and consumer behaviour, day of the week vs weekend demand / trends etc.

Forward looking data and information related to the pandemic has become an even more important aspect for forecasting these days.

  • Observing how different markets adapt to travelling with the pandemic – does it affect LOS, Lead time, etc?
  • We are also taking into consideration additional data like travel restrictions, visa requirements etc related to the pandemic.
  • Monitoring cancellations.
  • Has the main market changed? If the principal market has shifted to domestic or neighbouring countries, how has this affected ADR and for how long will it continue to be like this?
  • Are your Top Accounts changing? What does this represent for your rates and occupancy?
  • How are travel restrictions changing for the destination in the next months? Which countries will be able to travel to the destination? Or are people preferring to travel domestically/ in their own region as well?
  • Are people preferring destinations without quarantine? Does the destination have a quarantine upon arrival?
  • Are people booking longer stays, and prefer more spacious rooms/ suites or villas?
  • Are people willing to spend more, stay longer and splurge on higher room categories (since they might not have travelled for a long time) – there are many surveys available about feedback from people around the world.
  • What are the upcoming trends: Country searches, Flight search data, website analytics etc.
  • Any changes in demographics?”

Theresa Prins
Theresa PrinsFounder, Revenue Resolutions

“Unlike pre-COVID, the most important factor to use for your forecast is the current demand pattern experienced over the last 21-28 days. You cannot use last year or even the previous year’s data as the status quo has changed. Day of week data is still very relevant under the current demand pattern, as well as the behaviour by market segmentation groups. Public / Bank Holidays and events still play a role.

It may not be as significant as before, but it will generally have a bearing on your forecast. An influencing factor that is new to our forecast module that now plays a role is travel restrictions from your own country and supporting markets, as well as COVID case numbers and experts’ opinions on new waves of cases, etc.”

Daniel Feitosa
Daniel FeitosaRevenue Management Specialist

“Historical data (Same Point In Time and Past Results), Events Calendar, On The Books, Booking Pace and Segmentation. From a top-level perspective, being able to see the Booking Pace is the most useful information. This allows you to see when and how fast bookings are coming for any date. and by the time you track the data, you can compare and forecast dates. With Pace information, you can split to have this per segment, per event date and room category and any other “micro” analysis.”

Tanya Hadwick
Tanya HadwickGroup Revenue & Yield Leader, SunSwept Resorts

“In these COVID transitional times, we can no longer rely on our past data (previous pricing strategies, historical demand trends from OTB to achieved revenue), and we need to concentrate on future demand data, looking at the current situation and understanding the demand trends.

When looking at On The Books it’s really necessary to look at what is performing well by segment, assessing new customer behaviour patterns, utilising customer database and social media to assess current and upcoming needs in order to promote at the right times to secure the demand required.

Look at current statistics on bookings, cancellations, changes to assist in predicting the reliability of the OTB data. Market intelligence, rate shopping of competitors, understanding airlift factors (for Island resorts) all have an impact on the potential future demand as it’s necessary to analyse your market and both internal and external factors that may impact.

The data accuracy in the systems is important, especially as we need to prepare scenarios to ensure that everyone is prepared for potential impacts and can react quickly. All the information that we assess in creating a forecast is important, otherwise we wouldn’t spend the time on gathering and analysing. However, ensuring the current data OTB is accurate would be a priority for starting assessing future demand.”

Krunal Shah
Krunal ShahCluster Director of Revenue, Dorsett Hospitality International

“Forecasting depends on the relevance and availability of true historical data & the period that needs to be forecasted. It is very important to develop a forecast process for accurate forecasting. Unknown market conditions, demand and supply, price sensitivity and comp set rate fluctuations are all taken into consideration whilst forecasting for a specific period.

Forecasting has always being a mixture of personal motivation and interest followed with some mathematical process that analyses large amount of data. It is also very important to understand the purpose of the forecast and what you want to achieve from your forecast numbers.

Special events need to be taken into consideration whilst forecasting, looking at same time last year and required budget numbers. Revenue Management Systems nowadays have forecasting tool in-built to help revenue managers/directors to accurately forecast. It’s always Garbage in – Garbage out. The more accurate data entered in the RMS, the more accurate forecasting results you will get.

From my point of view, when I forecast for a hotel/resort, I also share with the relevant teams in order to understand how we can achieve those forecasted numbers. For example, if there is any promotional offer needed to be done in order to get to that forecast figure or any incremental gain that can help contribute towards the bottom line figure.”

Heidi Gempel
Heidi GempelFounder, HGE International Pte Ltd

“At this point, the short term forecasts (next 4 weeks and below) are driven by historical performance with the difference that only the last few weeks are taken into consideration (rather than comparison to previous months or even years). The pace and pick up of the last few weeks, together with government policy announcements on restrictions and measures. are the most important indicators right now.

This will determine access to the destination and if/how many people can meet and possible labour restrictions. Forecasts beyond 3-4 weeks are very fluid at the moment. Overall assumptions need to be made based on government policy.”

Silvia Cantarella
Silvia CantarellaRevenue Management Consultant, Revenue Acrobats

“Forecasting has changed dramatically post-covid as historical data has lost importance and the focus is on new trends: search intentions and conversions (how many visits and searches on our BE or website vs conversions), which geo sources (travel restrictions and travel corridors), which air routes are opened and flight maps, what type of rate plans are booked (flexible vs promo vs prepaid), segment and target analysis (from individual segment to target couples, families, solo travellers only) and obviously the booking window.

The history is not completely forgotten, but for example, I tend to use very close periods of reference like the past weeks and/or months in order to trace a trend. It is also great to use the benchamark comparing the growth curve with the market and how far we are from the pre-pandemic indexes.”

Edyta Walczak
Edyta WalczakRevenue Management Expert

“Recent events have highlighted that relying on historical data for forecasting and pricing was far too risky, so revenue managers had to adapt and change their forecasting methodology. We should rely more on forward-looking data as opposed to historical data. Since we can’t rely on the past trends when forecasting, we can adopt Short-Term Forecasting instead, by putting heavier weight on short-term history. Apart from tracking and analysing the performance from the last two to three weeks, we should also consider:

  • Global and national travel restrictions, lockdowns, vaccine distribution and social distancing measures
  • Air travel levels
  • Changes in visitor behaviour, spending power and expectations
  • Regrets and Denials
  • Search trends and Google analytics
  • Booking pace and lead time
  • Analyse groups pipeline, calculate the conversion and allocation wash
  • Market trends
  • Demand-driving events”