Forecasting Rooms Bhm6_ gurminder preet singh

8/9/2019 Forecasting Rooms Bhm6_ gurminder preet singh

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ROOMS FORECAST:

Estimate of future room sales activity, OR projecting room sales for a specific

period.

Forecasting Techniques:

Generally FOM is interested in maximizing both revenue & no. Of rooms sold,

when the number of rooms is sold at highest possible ARR/ADR, RevPar is

maximized. By accurate forecasting future demand/sales & revenue, FOM can

make the rate & sales decision needed for the maximize RevPar. Sales history

of a hotel also helps to forecast the requirement of staff during a shift.

According to standards one front desk clerk can take 50 check in during his

shift. So forecasting of room sales also helps management to schedule required

staff.

The hotel’s reservations department does two primary tasks; setting rates and

selling rooms. Before working on these, the reservations department needs an

accurate count of the number of rooms available for sale. Knowing how many

rooms are available for sale on a given date is a first step for the task of sellingrooms.

ADVANTAGES OF GUEST ROOM SALES FORECATS:

• Accurate revenue estimates

• Better guest service because of improved staffing decision

• Improved budgeting

• Increased operational efficiencies

• Increased profits

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Forecasting Rooms availability can be done by maximizing room rate through

accurately estimating demand. Hotels generally receive a higher rate from the

last few rooms sold than they do from the first few rooms sold. This is so

because the first rooms may have been reserved year or more in advance. So the

rooms left with may be sold to walk-ins or chance customers at rack or

premium rates which gives spike in ARR. With the experience of the past.

Hotel gets certain idea that how much rooms can be blocked for a particular

period of a year. As confidence grows and occupancy for the date becomes more and more certain, the room rate rises. In the end, the last

rooms sold receive the highest rate. By raising rates, step-by-step, as the room

forecast grows in accuracy, the hotel reaps maximum yield for the period in

question.

Sometimes estimating forecast hotel may face losses due to under booking or overbooking

An error resulting in under booking rooms available for sale can occur a

number of ways. A few examples might include: a reservations department

which holds more rooms for a group than they actually occupy, a heavier

number of checkouts than forecast, or a high last-minute cancellation rate. Any

of these examples will result in more available rooms than projected. Andunsold rooms are costly!

Overbooking the hotel is equally costly. Examples of overbooking errors

might include:

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projecting a higher number of check-outs than actually experienced, forecasting

more no-shows and cancellations than occurred, or holding less rooms for a

group room block than were actually required.

Calculating availability:

If guests never changed their minds, it would be very easy to fill hotels. The

formula would simply be:

Stayovers + Today’s reservations = Rooms committed

When the number of committed rooms equalled the number of rooms in the

hotel, the hotel would be full. And since no guests were changing their minds,

there would be no need to overbook the hotel in anticipation of a few

cancellations or no-shows.

The ultimate goal of every hotel is to achieve the ‘perfect fill, to reach this

elusive benchmark, however, the hotel needs to make some difficult and risky

decisions. One of the first steps in the decision-making process is to understand

which types of reservations are acceptable to the hotel. Hotels seeking to reach

perfect fill generally book a very high percentage of their rooms as guaranteed

or advance deposit reservations.

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However, rather than guaranteeing the room to a credit card or corporate

account, an advance-deposit reservation requires the guest to send payment in

advance. Payment may come in the form of a cashier’s check, personal check,

money order, or even authorized credit card payment. In any case, hotels that

require advance-deposit reservations often establish more rigid cancellation

policies (longer lead time for cancellations) in order for the guest to receive full

refund.

Why some hotels are able to better manage their room availability

forecasting than others? Describe the reason is in the details.

Well operated hotels strive to:

1. Include as much information as possible on each reservation:

• How recently was the reservation made?

• Is the reservation part of a larger group?

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• If it is a corporate reservation, are other representatives of the company

currently in-house?

• How far is the guest travelling (weather problems, airline delays, etc.)?

2. Begin forecasting room availability early in the day:

• Calls to corporate offices confirming reservations must be accomplished by

5 p.m. at the latest.

•

Checking with in-house sales managers and administrative departments before the end of the work day may also provide insights for certain guest

reservations.

• Having a sense of room availability early in the day allows the reservations

department to accept same-day and walk-in reservations.

3. Uncover duplicate reservations:

• Watch for spelling variations (e.g. McDonald, MacDonald, Mike Donalds).

• Verify that the guest has not already checked in at a sister, same-brand, and

property down the street or across town.

• Look for reservations under the same name for tomorrow night or later in the

week.

4. Validate the reservation.

• Verify that the guaranteed reservation is using a legitimate credit card

number. Then authorize and approve the card.

• Validate the credit status of all corporate guarantees. Is the company in good

current standing with the hotel?

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Tracking the accuracy of each reservation is an important step in forecasting

availability because it places a higher confidence on each of the incoming

reservations. However, no matter how carefully the hotel monitors itsreservations, some guests will inevitably cancel or no-show. The net impact

from each cancellation or no-show is an increase in the number of available

rooms.

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Forecasting Rooms Bhm6_ gurminder preet singh