Hotel Forecasting: The Key To Optimizing Your Strategies

Hotel forecasting has been around for a while and is becoming more popular and common among hoteliers, revenue managers, and hospitality professionals. It is a great way of creating a personalized strategy to increase your revenue and optimize your inventory. Not only does it increase your profit, but it also gives you a clear view of what to invest in the future. Keep on reading to find out how to utilize hotel forecasting.

What is hotel forecasting?

Hotel forecasting is a technique involving analyzing past data to predict future KPIs, occupancy, revenue, and more. This technique is also known as hotel demand forecasting, and it has been helping hotels increase their revenue by optimizing their strategy.

Predicting future demand can impact many things, from your pricing strategy to inventory management. Hotels can make data-driven decisions based on a combination of internal data, such as historical performance and booking patterns, and external data, including competitor pricing and market trends. 

Modern forecasting software allows hoteliers to collect, organize, and analyze this information, making it easier to predict future demand and make proactive decisions that drive success.

Why is hotel forecasting important?

Hotel forecasting is preparing for the future from today. As the name suggests, you can forecast important topics that make or break your revenue and get ready for them, optimizing your strategy for each individual data.

• It optimizes your revenue by adjusting the pricing on anticipated occupancy levels.
• Manage your inventory better.
• Focus on the right KPIs and optimize them better.
• Stay ahead of your competitors.
• Make a profit from your long-term investments.
• Predict your slow and peak periods better.

You can leverage data-driven solutions to predict them and so much more. 

Hotel forecasting methods

The demand forecasting process for hotels can be done through 5 straightforward steps. 

1. Collect data: Start by identifying and collecting the data that will shape your forecast. Prioritize your historical booking and pricing data while supplementing it with insights on competitors and market trends.
2. Analyze trends: The next step is to factor in the trends, seasonality, and any other factors such as marketing.
3. Create your forecasting models: Use your forecast insights to craft strategies that maximize revenue during peak periods and drive bookings during the low season. 
4. Create your strategy: Tailor these strategies to the unique needs and preferences of various market segments. 
5. Test, adjust the strategy, and repeat

Demand forecasting is a continuous process. To maximize your profits consistently, it’s essential to stay committed to forecasting.

Which data does forecasting factor in?

Hoteliers consider several key factors to ensure decisions drive optimal occupancy and profitability when doing their forecasting. Here are the important data points to factor in:

• Historical data
• Market trends
• Seasonality
• External factors
• Lead time
• Customer segments

How can hotel forecasting help you?

As demand forecasting becomes more and more widespread among all sizes of hotels, it is now more accessible. With this way of making data-driven decisions, you can optimize your rates and strategies.

It ensures maximum revenue during peak periods and reduces losses during slower seasons. With its accurate predictions, you can balance occupancy, preventing overbooking or underutilized inventory and ensuring a seamless guest experience.

Beyond day-to-day benefits, hotel forecasting plays a vital role in shaping long-term strategies. It identifies trends and opportunities, supporting informed decisions about investments, renovations, or market expansion.

Hotel forecasting technologies

Hotel forecasting solutions such as HotelRunner Insights are the way to unlock your hotel’s true potential. Insights is a powerful tool designed to provide valuable intelligence and analytics that can directly impact forecasting accuracy. Save time and effort by scheduling automated reports tailored to your needs. Get comprehensive insights delivered directly to your inbox at the frequency of your choice. Making data-driven decisions is easier than ever. Try HotelRunner Insights today!