The impact of Covid-19 on the hospitality industry means forecasting for strategic decision making has never been more critical to success, yet it is much more difficult to undertake. The traditional hotel demand pattern has been ripped apart – placing a significant obstacle in the way of making qualified revenue decisions, both through the budgeting process and in recovery. At such a crucial time, all commercial decision making should be grounded in accurate and reliable data. But when typical demand drivers have been upended and booking behaviour is unrecognisable, what type of data should you base your decisions on?
Traditional forecasting methods relied heavily on historical analysis. Such as identifying established demand drivers, year-over-year (YOY) trends and on-the-books (OTB) data. However, these tactics do not take into account the unique effect of the Covid-19 pandemic. With 2020 and the first half of 2021 being such outliers, trying to use them to accurately forecast the return of traveller demand is purely speculative. In recovery there is a need to disregard past forecasting approaches and make use of new, forward-looking data points to inform decision making.
Recovery is on the horizon but a return to pre-pandemic demand levels will only materialise gradually. International markets will re-open at differing speeds and hotels will be operating with varying source market mixes. Dependent on factors such as: government travel policies, successful vaccination programmes, resumption of business travel, coronavirus variants and travel corridors. In the upcoming months it’s likely the domestic leisure sector will continue to be your main source of revenue. But when foreign travel segments do return you want to be the first to identify these demand trends and take action - making well informed pricing, distribution and marketing decisions before your competitors.
Hoteliers who aim to perform above the market in recovery should look to a predictive market intelligence solution that gives an accurate sense of future demand. Actionable, forward-looking demand insights will help you forecast more effectively and deploy strategies to capture shifts in demand ahead of your new compset; driving revenue and business growth.
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