What You Need to Know About Forecasting Hotel Revenue

It’s no surprise that the hospitality industry is fast-paced and constantly evolving. And being successful in your hotel revenue management involves analyzing market data and making predictions about future trends. The only way to achieve that is by forecasting hotel prices.

Hotel forecasting encompasses anticipating demands and adjusting pricing strategies to attract more guests, regardless of the high and low seasons. An efficient forecasting hotel report gives you an advantage in planning resource and inventory utilization to improve internal processes and operating costs.

Successful forecasting of hotel prices requires an efficient tech solution or software to keep things running seamlessly. This guide discusses the hotel forecasting software's benefits, challenges, and features you must consider when choosing one for your hotel.

What Is Hotel Forecasting Software?

Hotel forecasting software is a strategic pricing tool hoteliers utilize to analyze historical trends and make demand predictions. Integrating this tech solution with your hotel technologies helps optimize your hotel’s occupancy rate and establish prices that can attract customers.

Utilizing this software helps boost your revenue, streamline processes, and improve your property’s profitability. You can also leverage this software to monitor competitor data and use it to create a more profitable business model.

Hotel forecasting software can also combine information about the following:

1. Segmentation strategies
2. Account sales conditions
3. Trend deviations
4. Market fluctuations
5. Lead time

Moreover, it looks after different types of forecasting strategies and suggests the best one that suits your hotel:

• Operational forecasting: helps anticipate your property’s staffing levels
• Financial forecasting:determine whether financial results achieve the goals you set
• Revenue management forecasting:maximize revenue by predicting implementation and demand strategies.

Forecasting hotel software features consistent and automated tools to make operations and processes more streamlined and functional. It generally can provide forecasting comparisons for various periods and actualize revenues, significantly reducing human errors.

It also provides visibility in the following sectors:

• Revenue management
• Accounting
• Team collaboration
• Sales

The Challenges With a Forecasting Tool

Challenges are inevitable, regardless of what software you’re using.Even Hospitality Technology solutions traditionally have issues with being clunky and unreliable, but that is changing, especially with offerings like HouseCount RMS. Because a forecasting tool is a key element in your pricing strategies, you must be aware of what these pitfalls are:

Organizational Misalignment

Keeping things aligned and organized is critical in forecasting, especially in the hospitality industry. More than understanding the financials, your team must know the best ways to achieve your financial goals.

Relying on a forecasting tool with a steep learning curve can be challenging for most hoteliers, especially those with no experience in tech solutions. Even when the platform is advanced and innovative, it can be troublesome to rely on it when you need to spend a hefty amount of time getting a hold of things.

This is why choosing a forecasting tool with user-friendliness and intuitiveness is important. You need a platform that can work across all your departments for better planning and forecasting operations. Moreover, the tool must clearly align with your financial goals.

Additionally, you need a cohesive team that knows how to work together efficiently with the tech tool.

Insufficient Data Credibility and Inefficiencies in Financial Forecasting

Forecasting issues arise from three main elements:

1. Disconnected data
2. Credibility issues
3. Incomplete information

Sometimes, failure to calibrate your forecasting tool leads to the authenticity failure of your data. And this can be bad for your hotel.

A forecasting tool without credible data is deemed ineffective. You won’t have any information to support your discussions, which can potentially lose your team’s trust in you as a hotelier. This can also lead to your business decreasing impact and value in the hospitality industry.

One way to overcome this challenge is to check the platform for structured processes and analytical procedures. You need to guarantee your chosen system allows accurate compilations of forecasts anytime with credible data.

Remember that structured processes can lead to better workflows and well-established templates. This will allow consistent data presentation and create convenient workflows across your team.

Issues Regarding Operational Data

Operational data issues are unavoidable, even with a reliable forecasting tool. Most hoteliers encounter unreadable data formats or difficulties in accessibility and analysis. This leads to hotels experiencing complicated issues in reporting critical metrics in real-time.

It’s relatively simple to avoid these issues when your forecasting tool features an intuitive dashboard that tracks all datasets you need for monitoring and tracking your performance. The dashboard should have optimal visibility so it’s easy to pull information when a team member needs access.

Additionally, it can be extra helpful when your forecasting tool features advanced analytics programs that promote data solidification for better delivery in making data-driven business decisions.

Financial Consolidation

Your forecasting tool must be tech-savvy enough to simplify complicated operations to create business decisions faster. Disorganized data can make your work principles all over the place, significantly reducing productivity and efficiency.

Your solution must efficiently organize and deliver financial information in the simplest format possible. Team members must easily access the data they need wherever and whenever. A forecasting tool with dynamic and automated journal entries can also establish processes faster.

Importance of Forecasting Solutions

Forecasting helps you determine key opportunities for making better and data-driven pricing decisions, especially in an unpredictable hospitality industry. It combines market trends, demographics, and marketing strategies to adjust prices and improve guest satisfaction.

Additionally, forecasting becomes your partner in improving your distribution strategies based on your target guest type and segmentation. This tool predicts the future performance of your hotel to become more aware of how you can improve your current condition and enhance user experience.

You must also remember that forecasting is a critical element of hotel revenue management because it eases the industry’s uncertainty. Even though it’s primarily advantageous to future trends, it also looks back on past data to identify mistakes you can improve to increase potential revenue.

Without forecasting, it’s almost impossible to determine the best room rate you can offer your guests, depending on their segmentation and preferences. Other benefits of forecasting solutions include:

1. Estimate your hotel’s future profitability
2. Work on your sales accordingly by controlling peak and off seasons.
3. Guarantee seamless operations and predict resource levels.
4. Establish well-defined key performance indicators
5. Real-time tracking of your business objectives to fit your annual budgets

Benefits of Revenue Forecasting Software

Revenue forecasting software is not just for well-established and prominent hotels. Even hostels and start-up boutique accommodations can significantly benefit from these innovative tools.

Moreover, because these software solutions can range from accounting to sales planning, you must be smart enough to choose the best one that can positively impact your hotel. Aside from better performance, you can expect the following benefits when relying on revenue forecasting software:

Improve Business Profitability and Enhance Guest Satisfaction

Company profitability and customer satisfaction are critical elements you must always consider in the business. Always remember that customers are your hotel’s ambassadors. They should always be satisfied with your accommodations, amenities, and other services to become loyal to your hotel.

Moreover, to keep your guests happy, your hotel must have a profitable and functional supply chain that includes:

1. Quality products and amenities
2. Fast service delivery:

Because forecasting tech guarantees accurate demand forecasting, you can ensure better metrics and performance tracking to enhance the guest experience. When customers constantly return to your hotel, you can expect better profitability and revenue.

Because forecasting tech is an efficient decision-making tool, it creates accurate market analysis. This helps with boosting your performance because the software quickly identifies potential errors in the past.

Promotes Automation

Revenue forecasting software also promotes automation, especially in business planning. The tech solution provides all the insights your hotel needs to make well-defined data-driven decisions.

Moreover, this saves your employees time dealing with manual, repetitive tasks. It gives them more time to deal with relevant tasks that can improve your team’s productivity.

For example, HouseCount RMS is a dynamic hotel-casino pricing solution that provides accurate, real-time pricing recommendations using automation. As the software captures more data from sales, it can make better and more effective recommendations over time.

Perform Quality Checks

Aside from automation, revenue forecasting software ensures quality results in monitoring trends equipped with future data sets that adjust to evolving market conditions. This yields better results hotels can rely on to improve pricing decisions and marketing strategies.

With quality results, you can expect minimal labor costs, maximum operational value, and automated scheduling processes.

Maximize Marketing Efforts

Revenue forecasting software does its best to provide the business insights you need to predict how well you’re doing in the industry. Moreover, it lets you determine the best revenue channels to drive the greatest profitability. This ensures you’re putting in the money you need to generate the highest gain.

Enhance Investing and Hiring

This is a pretty unique advantage of revenue forecasting technology. It gives you a glimpse of the current condition of your company. This enables you to check out your hotel's busiest and slowest times, ensuring you hire only the people you need.

Better Cash Flow

And finally, who doesn’t love more money for your business? The revenue forecasting software provides better cash flow because it predicts issues that constantly drain your money. This promotes better budgeting methods.

Features of Hotel Forecasting Software

Understanding the importance of forecasting hotel software is just the start of your pricing journey. You must carefully consider your platform options to cater to your team's needs. When you get the software with precise features, you’re in it to take advantage of what forecasting hotel revenue offers.

Accurate Demand Predictions

Accuracy is critical in hotel revenue management, including forecasting. Your forecasting hotel software needs to establish accurate predictions, especially in identifying what rooms and amenities promote the highest demands among your guests.

Accurate demand predictions ensure dynamic pricing strategies can quickly adapt to changing industry trends. These are based on real-time and historical booking data, pricing comparisons, train and flight schedules, and relevant information from travel aggregators.

Automated Processes

Forecasting Hotel software should promote automated processes and operations. These significantly improve convenience and accessibility, a win-win for your team and customers. Automation also reduces manual data entry, speeding up critical hotel processes.

Moreover, you can expect fewer careless mistakes affecting your hotel’s performance because of decreased manual data entry.

Upselling Revenue

Upselling revenue is outside of online travel agencies. And you need to completely take advantage of this pricing strategy if you want more revenue growth opportunities.

This sales technique offers higher room options to your guests with unique features, add-ons, and extra services that can make their stay more valuable. Forecasting hotel software leverages the full potential of upselling revenue strategies to promote personalization according to the guests’ preferences.

LuxSell URS is a great example of hotel-casino upselling software that utilizes the latest technologies to offer the right price to the right guest. Through active yielding powered by AI and ML, agents can offer optimized deals to guests during booking or at the front counter during check-in. Further, offers can be dynamically offered to guests when they book through the hotel’s website or third-party providers, so they can choose their own offers.

Better Offer Choices

An outstanding forecasting software should provide better offer choices through micro-experimentation. This learning framework allows more optimized recommendations through upselling. It guarantees your customers are presented with better room rate suggestions.

Enhanced User Experience

And finally, who doesn’t want a tech solution that’s all about user-friendliness and intuitiveness? Your forecasting software for hotels must feature automation, accessibility, and convenience to ensure users are equipped with how everything runs.

Forecasting Models

Another feature of outstanding forecasting hotel revenue software is properly utilizing a working forecasting model. Everything starts with the basics. But if you’re curious about more complicated and advanced models, we have provided brief overviews below.

Basic Forecasting Model

This is the simplest forecasting model the software can utilize and features the least calculation. The basic forecasting model leverages historical data and market trends to predict future client demands.

Advanced Forecasting Model

There are also software solutions that leverage complex forecasting models. Aside from market trends, this model prioritizes information by segment. This gives hoteliers more opportunities for better and more accurate forecasting.

The Need for Software for Forecasting

The software can be a game changer in hotel forecasting. This pricing strategy considers critical factors you must consider for its success and revenue growth. Failure to identify these factors can lead to ineffective forecasting for hotels.

This is also why you need to rely on a reputable tech platform to forecast hotels. The reliable revenue management system can generate real-time hotel forecasting reports, ensuring proper data collection to make data-driven price adjustments as needed.

Let’s look at the critical factors that drive the need for forecasting software:

Competitor Influence

We may have reiterated this a million times, but the influence of your competition is critical in an effective forecasting strategy. You must keep tabs on your competitors’ room rates and availability because this information helps you better understand hotel demands in your location.

The following are significant elements to monitor in your competition:

• Selling strategy changes
• Fully booked dates
• Hotel opening and closure
• High and low demands
• New management and refurbishments

Top Accounts Expectations

The success of forecasting software also relies on the strengths of your hotel revenue manager. You need to consider where your top accounts come from, including:

• Meetings or conventions
• Internet
• Corporate
• Tour operators
• Wholesale

This means it’s important to gather the necessary information when speaking with your customers, especially knowing about their expectations so you would know how to improve your services.

Your top accounts can help you identify and correlate effective sales strategies with your global system. Moreover, remember that forecasting should be both qualitative and quantitative. It should also be participative and involves your team members.

Forecasting Software Process

Following the steps below should make everything smooth, especially for your chosen software.

1. Collect market trends and historical data, including ADR, room nights, competition, current events, unconstrained demand, and more. These will help you understand past guest behaviors to anticipate future demand better.
2. Identify causes and patterns like cancellations, denials, no-shows, and denials to know how and why problems occur.
3. Understand demand behavior, including length of stay, booking pace and lead time by guest segment, and average stay.
4. Identify market trend variations by comparing results.
5. Analyze forecast demands and make pricing adjustments accordingly.

Best Software for Forecasting

While it’s a fact that revenue management tools, including hotel forecasting, can benefit your revenue, performance, and guest experience, only 28% of hotels learned to utilize these innovative tech solutions.

And to help you, we’ve gone over the best revenue management software system that features efficient forecasting—HouseCount RMS. Let’s take a closer look at this particular product and how it can benefit your hotel.

HouseCount RMS

HouseCount RMS is upselling software that complements Luxe Pricing’s other offering, LuxSell URS It’s an exceptional revenue management software that features 24/7 pricing management in the entertainment and hospitality industries.

HouseCount RMS

HouseCount also features easy deployment, meaning your team only needs minimal effort to complete the operations, forecasting, and other processes in the fewest days.

Pros

• Easy integration with your current tech stack
• Intuitive dashboard and customer support
• Unique revenue growth opportunities to boost your hotel’s performance

Cons

• Slight learning curve to get used to how everything works

Why Is Hotel Revenue Management Forecasting Important?

Revenue management is essential in the hospitality industry. But combining that with forecasting? Now that’s innovative and resourceful.

Hotel forecasting should be part of your revenue management because it’s the key to making vital and more data-driven decisions. Making it part of your RMS improves your distribution, promotion, and pricing strategies.

Incorporating demand forecasting in your revenue management for accurate predictions. These predictions help your team establish methods to earn higher than your average revenue.

How HouseCount RMS Can Help With Hotel Revenue Forecasting

HouseCount RMS guarantees revenue growth and performance boost with its outstanding features. Aside from ensuring an exceptional revenue management system, this tech solution also promotes forecasting for better pricing strategies that resonate with your target customers.

Moreover, HouseCount RMS also allows for autopilot pricing, meaning that it will adjust prices and guarantee coverage around the clock so that you don’t have to be constantly monitoring prices. Plus, HouseCount RMs have the benefit of being able to turn auto-pilot on or off as it makes sense for you.

HouseCount RMS also promotes flexible pricing options:

1. Fixed monthly fee
2. Inventory pricing so that you can get accurate pricing down to the inventory segment
3. Revenue increase percentage achieved by its system

Conclusion

Forecasting is critical to any hotel’s pricing strategy. This tool helps hoteliers achieve their desired revenue which can establish a better online presence and market visibility.

Moreover, hotel forecasting promotes building a base price and working around it to maximize revenue.

Trusting a revenue management system with a forecasting tool helps streamline processes and prepare your business for future issues and uncertainties. Remember to analyze market trends, consider holidays and events, and create forecasts by segments.

One hospitality technology that can help you price and forecast effectively is HouseCount RMS, a pricing strategy software by LuxePricing. Request a demo today to learn more about how Luxe Pricing can help you forecast hotel prices.