Forecasting Accuracy Forecasting: The ultimate resource for anticipating the future performance of rooms, space, revenues and profits based on the analysis of available pertinent data. Why is forecasting so critical?
Forecasting leads to efficient planning and decision making for all departments, and most importantly it is one of the drivers of pricing. Prism Hotels and Resorts Forecast Accuracy for October, 2015: Augusts Forecast for October = +0.4%
(equates to +$69,003) Septembers Forecast for October = +2.7% (equates to +$412,353) October 1 Forecast = +4.6% (equates to +$687,636) Your Hotels Forecast Accuracy
Why is accuracy so important? How is it calculated? Where do I find the accuracy %? The accuracy of the forecast is essential because the forecast is the main driver of the pricing/room allocation decisions, checkbooks, cash requests Inaccurate forecasts or predictions will
diminish the hotel's revenues and profit margin. Calculating Forecast Accuracy Total Revenue Variance Percentage = (Actual Revenue Forecast Revenue) Forecasted Revenue Finding Forecast Accuracy
In ProfitSword, Follow this path Site Reports, under Monthly Reports, FC Accuracy Prism Hotel Prism Hotel Prism Hotel
Layering of Rooms Forecast Rooms Forecasting Fundamentals: Contract business Group Transient Rebates Other Revenue ROOMS
Contract Group Transient TOTAL HOTEL FORECAST CATERING Local Group
AV OTHER Retail Spa Food and Beverage Golf Forecasting Contract/Crew
Layer in manifest, rooming list received from the contract/crew rooms contact Forecasting Group Step #1: Layer in WASHED definite room nights by segmentation and rate Step #2:
Layer in to-bes segmentation and rate How do you forecast to-bes? Lets Talk Slippage Lets Talk Slippage Why is this accuracy so important when forecasting group slippage?
How do you predict group slippage at your hotel? Calculating Group Slippage Forecasted Slippage = Contracted Rooms Forecasted Rooms Example: Group X is arriving in 9 months. They have contracted 50 total rooms with the hotel. We are forecasting 40 based on historical pickup. 50 40 = 10 room forecasted slippage
Forecasted Slippage Percentage = (Forecast Slippage/Contract) x 100 (10 / 50) x 100 = 20% forecasted slippage percent Actual Slippage = Contract Actuals = Actual Slippage
Example: Group Y stayed last month. They contracted 100 rooms, but only picked up 82. 100 82 = 18 rooms actual slippage Actual Slippage Percentage = (Actual Slippage/Contract) x 100 Actual Slippage Percentage (18 / 100) x 100=18% Best Practices: Forecasting Group
Wash Group Definites Group Pace Important to note that rooms usually pick up on a bell curve. The top of that bell curve is called the peak that includes dates with the most room nights. The ends of the curve are called the shoulders least amount of rooms.
Forecasting Transient Transient The most reliable way to forecast the future is to understand the present John Naisbitt, Author of Megatrends PAST Room Nights Mix ADR/Revenue
Rebates Other Revenue Events Impacting Results NOW Pace Booking Window Seasonality Demand by Segment
Special Events Market Compression Economic Climate Unconstrained Demand Arrivals by day of week/LOS and Rate Cancellations and No Shows This all leads to the future
Forecasting Rebates Rebates: Part of the room rate that is returned directly to the guest or applied to the master account. Group rebate / group rooms sold = group rebates per room night Best Practices for Tracking Group Rebates
Forecasting Other Revenue Other Revenue GNS, part day revenues, service failures Other revenue / total rooms sold (excluding comps) = other revenue per room night Rooms Forecast is just the
first portion to the Total Hotel Forecast: ROOMS CATERING OTHER Group
Local Retail Contract Group
Spa Transient AV Food and Beverage Golf
Life of a Forecast Revenues updated daily in PS drive inventory/pricing decisions; update month end forecasts, labor cost analysis, profit and NOI Forecasting Pitfalls to Avoid
Over-Forecasting High rooms forecast, low remaining supply = too restrictive inventory and pricing, higher rates and limited discounts. Potential for turning away needed business Over-staffing Under-Forecasting
Low rooms forecast, high remaining supply = open inventory and pricing Lower rates and discounts remain open, potential for leaving $ on the table. Under-staffing Forecasting is a Team Effort Now.How Do I Forecast Expenses?
Is it possible to generate a real-time P&L during the month? YES!!!! (with a little bit of effort on your part) 1) View the P&L Report in PS 2) Set columns to Forecast, Budget, Last Year or your specific needs 3) Updating forecasted expenses a) Set up drivers where applicable b) Revised fixed expenses as needed
customize to c) Update non-recurring items or one time expenses 2016 Forecasting Accuracy Expectations 90 Days Out = 7% 60 Days Out = 5% 30 Days Out = 3%
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