Today, the major business imperative in the hotel industry is to increase efficiency – so an accurate sales forecast is crucial.
Fierce competition from the sharing economy and rival brands means costs need to be cut and margins raised. Therefore, hoteliers have to create creative solutions for augmenting efficiency. Sales forecasting is central to cost-effective business management, as executives need to make predictions in order to strategize. Here, we discuss three main reasons why hotels need to improve their sales forecast methodologies.
1. Drive Cumulative profits through detailed analysis
To create an accurate, informative sales forecast, it is important to regularly analyze inventory. By carefully studying each category, hotels can identify areas where profit can be driven and savings made. For instance, through studying demand curves, distribution statistics and pricing trends for particular rooms, hotels can gain an insight into market dynamics. To give but one example, in periods of high demand, hotels can increase revenue by introducing a minimum length of stay. Equally, during the offseason, the marketing and sales departments can channel their efforts towards high-spend customer segments.
Through a detailed understanding of the supply and demand matrix, hotels can formulate strategies to drive incremental profits, no matter the season or event. However, technology is key to advanced reporting. In order to analyze sales statistics for multiple properties, executives should partner with tech firms to pool, crunch and visualize valuable data.
2. Consolidate information across every level
An accurate sales forecast is useful across all levels of an organization. For example, large hotel groups need to communicate across numerous registers to various stakeholders. At the micro level, an accurate sales forecast can benefit the sales and marketing teams hugely. Through clear, concise and correct forecasts, these departments can focus their energy towards particular customer segments or product packages. On the macro level, robust sales forecasting allows senior management to communicate the financial status of the company to shareholders. When it comes to these top-level communications, accurate forecasting is key. Overstated forecasts can upset markets and lead to drops in share value, whereas overly cautious projections can alienate investors.
3. Promote a collaborative approach
An important point which is generally skimmed over is that sales forecasting has use value beyond selling rooms. Insights from sales forecasting can have several company-wide benefits. For instance, in periods of high occupancy, hotels will need to make greater investments in housekeeping, food and beverage provisions and staffing. From here, all related departments can formulate strategies for busy periods. When executed well, sales forecasting can inform a complete operations strategy.
Data: The key to an accurate sales forecast
As implied, data is critical to accurate sales forecasting. Hotels need to gather far-reaching, high-quality data in order to formulate accurate reports. By and large, this is why several large hotel groups are favoring their direct channels over OTAs, as it allows them to harvest a great amount of customer data. By selecting the right analytics partner, hotels can begin to extract relevant, actionable insights from sales data. As a result, executives can implement robust, evidence-based strategies to drive sales, cut costs, and run more efficient businesses.