Why is Forecasting important in Revenue Management?
Before we talk about forecasting in revenue management we need to know what is revenue management and why it is important.
Revenue management refers to the strategic distribution and pricing tactics you use to sell your property’s perishable inventory to the right guests at the right time, to boost revenue growth – By definition.
Having a revenue management strategy in place not only helps us determine the best rate to sell rooms at and what offers to apply to promote our property, it also enables the hotel to plan ahead to optimize periods of high demands while also preparing for low demand seasons. Forecasting helps us with this.
Forecasting refers to the practice of predicting future situations, based on an analysis of past and present data. Within the hotel industry, this means looking at past performance data, wider industry data, and information available to your business right now. From there, forecasting typically relies on identifying patterns of market.
Useful tips to help in Forecasting accurately :-
1) Study Rival Hotels :- Find out what your rivals are doing to attract their audience? Can our hotel do that? What do they do during the peak season/off season?
2) Maintain accurate data :- Forecasting relies on data, both historical and current, which is why its necessary to maintain accurate data.
Plan for holidays and festivals/long weekends before hand.