Reservation lead times in the hospitality industry are changing in key markets in which we operate, making forecasting more challenging. Nonetheless, it remains extremely important for our operational departments to have a realistic financial outlook in order to operate the hotel as efficiently as possible on a day-to-day basis. Owners and investors must also have a clear understanding of how their hospitality business will perform financially.
Hotel price forecasting
Budgeting and rate setting both benefit from forecasting. In order to forecast accurately and effectively, a solid foundation in historical data is necessary. Having a budget and forecast in advance will give you plenty of time to make adjustments.
For any period in the year when your hotel is particularly valuable, plan ahead one year in advance by writing your forecast immediately.
Effective forecasts include the following components:
- Room rates
- Turnaways/Regrets/Denials – identifying reservations that are turned away or not booked, which is crucial to measuring demand. If possible, you should capture and measure your turnaways online as well as via direct/telephone contact.
- Spend per room
- Market trends
Hotel budgeting and demand forecasting
Before you set your budget, create a demand calendar so you know exactly what you have to deal with. There is usually a forecast every day for the next 30 days and every week for the next 90 days at most hotels.
This is often done in a spreadsheet after hoteliers extract data from their RMS, but you need a system that can do it all in one place that is both high-tech and easy to use.
Hotel Budgeting and Forecasting with Pricepoint
Pricepoint – a real-time price optimization engine – was developed by industry experts and data scientists with over two decades of experience building revenue management systems powered by artificial intelligence. In order to keep you ahead of the curve, Pricepoint can be your perfect tool to constantly analyze the market and update room prices. Pricepoint can optimize room rates as soon as availability changes, using artificial intelligence to analyze a hotel’s performance.
How Pricepoint will Give You Leverage
Developed to solve hoteliers’ pricing problems, Pricepoint is an automated revenue management system. Your website and OTAs such as Booking.com and Airbnb can be optimized with airline-grade, AI-based pricing intelligence in real-time. The use of revenue management techniques, such as Pricepoint, increases occupancy and revenues, as well as saves managers time.
With Pricepoint, you can analyze historical data directly from your PMS or Channel Manager. Your room prices are optimized by an AI engine powered by machine learning.
By analyzing factors such as customer behavior, seasonality, competitor rates, and more, Pricepoint determines the optimal price per room for your hotel.
Prices are automatically updated to OTAs whenever room availability changes. Email notifications are sent to you, and no further action is needed on your part.
Want to see how Pricepoint works? Start a FREE trial TODAY!