Why considering futuristic data is crucial for a hotel’s revenue management in this pandemic?
Pandemic creates challenges in forecasting, so considering futuristic data is crucial for a hotel’s revenue management.
The hospitality industry faces a halt in demand in pandemic due to the spread of the life-threatening virus.
Furthermore, the situation gets worse when government implement lockdown in various countries to slow down the spread of the same.
The historical data will not aid in the management of revenue that it was used to do before the pandemic.
Hence, looking forward to the future forecast has never been more important.
Taking this situation seriously, revenue managers must become so efficient using future data that even in future.
If any critical condition arises they know how to tackle them and use futuristic data for hotel management.
Because focusing on these future data they can create realistic forecasts by predicting demand and charge prices accordingly.
What Is Revenue Management?
It involves the use of performance data and analytics.
By the revenue management team to accurately predict demand and other consumer behaviour.
Thus, it helps them to decide on pricing and distribution to maximize revenue.
The main aim of revenue management is to sell the right product to the right customer for the right price at the right time.
Having a revenue management strategy in place not only helps determine the best rate to sell rooms.
But also enables the hotel to plan ahead of other competitors.
Now let’s look at how to use future data in revenue management and why it is beneficial for your hotel.
How to consider futuristic data for revenue management
Forward-looking strategy
In an attempt to be proactive and understand guests behaviour and intention.
Give importance to data sets like search patterns and rooms they are booking.
Hoteliers may use the search data, add to cart data, and guest arrival data to better understand the behaviour of customers.
Relying on Property Management System and already booked room data for making strategies is no more effective as it was used to be.
Once you get comfortable with using these data then you can create correlations to your demand patterns.
Hence, better understand the customer’s behaviour and find out whether or not you are getting a reasonable amount of cash flows.
Reason for using this strategy
Data from searches contain a variety of information. Hence, you can use it to see what hotels and their rooms visitors are interested in.
The time they want to visit and how long they want to stay.
Revenue managers may identify which hotels in their market are the most popular and find the reason for their popularity.
For instance, the experiences guests are having while they are staying in those hotels.
The prices they are charging for a day. So, that they can compete with them.
These data revenue managers use to make sales by taking effective marketing decisions and;
Ultimately position themselves in the market.
Mixing historical data with estimated future demands
However, forecasting is challenging when done through only future estimates.
Hence, you can use the best of both worlds by integrating historical data with estimated futuristic demands.
In this way, you can predict with more accuracy. We know you can’t predict accurately with 2019 or another year data.
You don’t need to consider the whole year data.
Only you have to include in historical data the number of occupied rooms, as well as income generated by the market segment per day.
Future data include the number of rooms and income on the books per day for at least 3 months.
By collecting data daily, the hotel may create basic booking pace estimates based on market segment and compare them to past data.
Hence, in this way you know when demand increases or decreases and use marketing strategies accordingly.
Factors you must consider in historical data
For forecasting when you are looking at historical data look at these three factors:
- Operational
- Financial and;
- Revenue management
Operational forecasts are the number of staffs and housekeepers are required
To perform day to day activities, a number of hotel guests visiting hotels.
Financial forecasts mean the revenue generated after deducting all expenses
To deliver profitability forecasts to owners and investors.
And finally, revenue management projection that anticipates future demand for a hotel
So that demand may be managed to meet the hotel’s ultimate revenue goals.
Keeping a check on all these is essential because their performance influences the whole price, inventory, and revenue management process.
By using both past and present data hoteliers can make accurate revenue management forecasts.
Benefits of considering futuristic data for revenue management amid crisis
Gather information
Using present data( as historical data are held less significance) the revenue managers have sufficient information about visitors intent.
Hence, they can use it to properly estimate demand.
Recognize new trends prevailing in the market
By looking at future demand data you will know the demand shifts in your market.
When you know the demand is high and which target market you should approach.
Then you will set up promotions and advertisement accordingly.
Offer optimized rates
After understanding the new market trends you will know the rates you can charge to position your brand.
And you can easily optimize rates according to real-time demand fluctuations.
Competitive advantage
Not only learn about shifts in demands but also gain insights into how your competitors are addressing the problems.
How they are responding to shifts in demand? Then position yourself accordingly to gain a competitive advantage.
Conclusion
From the above we conclude that working with historical data isn’t enough to keep a business afloat these days.
Rather, hoteliers must implement new strategies for adapting to shifting market conditions.
Give importance to data sets like search patterns, rooms added in the cart, rooms they are booking.
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