Here is How!
When it comes to the hotel, travel and tourism industries, the importance of demand forecasting and optimized inventory distribution for effective RevPar management can not be overemphasized. It is a hotel of Holy Grail.
If you belong to any of those industries, you need to measure and forecast demand at various levels and for different market segments to develop profit-making strategies, gather sizeable information of the market and integrate the efforts of different departments including distribution to enhancement business performance .
How do you go about such intricate and intensive measuring? You are probably following the approach of obtaining data, analyzing web customer sentiment and competitive rate monitoring.
Here are some ways in which accurate forecasting of demand and effective room distribution can be a revenue-maximizing tool for your hotel:
1. Better Strategy for Marketing Decisions:
Marketing decisions and demand forecasts share an invaluable relationship. While you already put efforts into data analysis and research to measure your overall room demand, you must take into account how the various macroeconomic and seasonality factors affect demand. This helps you to market your different products to their targeted segments and generate more revenue from the most profitable segment at a given time.
For example, at the time of any event (s) in your city, demand will increase. Correspondingly, at the outside of vacation season, you can start marketing your group-booking plans and offer benefits like discounts and bonuses in the form of non-room services for that limited period.
2. Effective Pricing Strategy:
Pricing is a critical area in your hotel's marketing arsenal. In many cases, price is the single most important determinant of a buyer's booking decision. Such a scenario creates a pressing need for dynamic pricing to grab the most profitable opportunities. For instance, in times of low occupancy, you can offer lower prices and yet hit the desired bottom line on account high prices during high occupancy. By the same token, an increase in corporate bookings may make you focus on profitable room bookings instead of high bookings because corporate guests are likely to prioritize your services over their budget.
3. Optimizing Distribution Channels:
An experienced revenue manager does not focus only on revenue-maximization but also pursues meticulous cost cutting to achieve a healthy bottom line. Since distribution channels offer several opportunities for optimizing distribution, tracking their performance in the context of geographical demand can prove immensely beneficial for your hotel!
For example, your forecasts may tell you that the following month will witness domination of occupations from a particular location. Subsequently, you can invest more in inventory distribution on those channels. Not to miss you need an advanced channel manager for this.
4. Better Procurement Decisions:
As a common practice, you keep purchasing several goods and services to keep your business running and in good shape. However, you can do more. One way is to optimize your investments in procurement operations with an appropriate demand forecast.
For example, if your demand forecast entails an increase in bookings, say, due to holidays or any special event that is due to take place in your city, you will probably put more money into the Food and Beverage department. Doing so will not only assist in better planning and execution when the time comes, but also save you costs in such a perishable materials department.
5. Timed Staffing forecasts:
Staff requirements usually increase with the growth of your business. Staff investments are not limited to just hiring personnel, but also extend to training them to manage critical operations such as complaint resolutions. Accurate forecast of demand will give you a clear picture of timing and help you plan your hiring and training processes appropriately.
For example, an increase in demand will necessitate the availability of a well-groomed, round-the-clock customer service personnel ready to face the challenges thought about by an increase in occupancy. In such cases, you can carry out the concerned processes before the stream of footfall ushers in.
6. Timed Maintenance Operations:
Maintenance and renovation are the kind of processes you need to carry from time to time. Timed maintenance will help you stay prepared to manage your operations in times of increased occupancy from guests. For instance, if you forecast hotel room demand accurately, you can carry out processes such as repairs, refurbishments and replacements before the surge in occupations kicks in.
With so much predictions as well as contingencies to plan for, you must plan well. Moreover, with the kind of benefits forecasting tools bring in, it is clear that you need to focus more on forecast demand at city-level to keep your hotel business flourishing.
However, accuracy in forecasts can only be achieved through meticulous analysis of the right type of data. For procuring realistic data and its automated analysis, you can also use Travel Technology Tools, which will make your job a lot easier.
The upshot is, to yield better RevPAR and stay ahead of your competitors; you must measure room demand from a geographical standpoint. Happy Forecasting and Distributing!