Room revenue forecast

Hotels and resorts must set prices in an environment with highly perishable inventory which varies dramatically, and customers whose value may need to be carefully measured.

There are two approaches to forecasting rooms revenue available to hotel management.
One of the simplest methods of forecasting rooms revenue involves an analysis of rooms revenue from past periods. Dollar and percentage differences are noted and the amount of rooms revenue for the budget year is predicted.

The second method of forecasting rooms revenue bases the revenue projection on past
room sales and average daily rooms rates. A simple formula of multiplying rooms available by occupancy percentage by average daily rate reveals the forecasted rooms revenue. Occupancy percentage being the proportion of rooms sold to rooms available during a designated time period, average daily rate is derived by dividing net rooms revenue by the number of rooms sold and the number of available rooms is calculated by multiplying the number of rooms in the hotel by the number of days in the year the hotel is operating.

Various automation tools exist to assist in forecasting rooms revenue. It is key that the automation system should:
. Assist in determining overbooking at roomtype level for optimal use of valuable inventory
. Stay pattern controls to enforce checkouts occur as anticipated to help maximize revenues on peak periods
. Shoulder date management that targets revenue potential on either side of peak periods.
. Measure and evaluate the value of prospective group business relative to other uses of the inventory
. Enable management of special events according to their revenue potential; and determine guests’ value to one’s business.