Forecasting demand for room nights in a destination or hotel is not very difficult for a revenue manager working for the same hotel for many years. The experienced revenue manager is far better at forecasting than any RMS in the market because there is a need for the human touch to get it right.
Forecasting
Suppose the hotel does not have an experienced or no revenue manager. In that case, the hotel needs an RMS to adjust rates based on their specific forecasting model automatically. Whether the forecasting is done manually or by a system, there are a few variables to consider to arrive at a reasonably accurate forecast. Keep the information in a calendar and keep the calendar up-to-date.
General travel patterns
Travel patterns are calendar specific. Seasons and weather changes follow the calendar and general travel patterns with business on weekdays and leisure travel on weekends. Analyze travel patterns and continuously update changes in the calendar. An updated calendar is essential to have time to take action to capture the desired demand.
Holidays
Most holidays are on the same day year after year, while others tend to shift dates between years. If the hotel attracts people from other countries, adding these countries' holidays to the calendar is vital.
Event-driven travel reasons
Keep track of changes in destination events. Hotels must understand the extra demand for hotel overnight stays generated by events. Add all events to the calendar to better understand why people travel to the destination and all the opportunities this creates for the hotel. All events are not equal, so the hotel needs to understand which type of audience each event attracts.
Historical data
Historical market data is essential to understand the travel patterns and keep track of the past performance of the hotel. Therefore, keep accurate records for historical actual market data and hotel data in the forward-looking calendar.
On-the-books
On-the-books data is a way to detect demand for specific dates and should therefore always be readily available in a calendar format. If the hotel has access to on-the-books data for the same date a year ago or at some other time, it will be easier to forecast demand.
Competitive information
Keep track of if new rooms enter the market or if hotels close rooms for renovations. Keep an eye on the competitors' published rates as a sanity check that you have not missed anything that might drive demand. Be careful in adjusting rates based on competitors' rates since it is hard to understand their rate strategy.
