Hotel Segment Forecasting

Hotel Segment Forecasting The Purpose, The main purpose of forecasting business activity and financial results is for planning and decision making purposes.

Accurate forecasting leads to better operational decisions regarding staffing, purchasing, marketing, and improved use of capital in decisions for capital expenditures and working capital.

The more accurate the forecasting process is, the more accurate the decisions are regarding the operation of the hotel.

The goal of every hotel is accuracy in forecasting, given current information and resources used in the forecasting process.

Hotel Segment Forecasting / Forecasting & Projection

The main difference is in the timing.

Forecasting addresses immediate predictions (Already OTB) On The Book, Reservations  on PMS, Tentative & Definite  , while Projections focus on the long term based on Analyzing Demand .

By understanding the nuances of these terms, you’ll be positioned to more accurately predict your future financial performance.

Hotel Segment Forecasting / Policy & Responsibility

• Finance Controller is responsible to accurately forecast operating results in the three-month and full-year forecast.
• Finance Controller ensures that weekly forecasting of business volumes is accurate and compared against actual results to assist departments in scheduling appropriate staffing and improving forecasting ability.
• Finance Controller  tracks  three-month forecast accuracy with the purpose of improving his/her own forecasting ability.
• Finance Controller  work with and train the hotel Management Team in accurate forecasting techniques and procedures.
• Finance  Controller will use the International Forecasting Tool as developed for analysis and reporting of forecasting

Three-Month/Full-Year Sales and Profit Forecast

The process of forecasting sales and profits for hotels varies due to several factors including:

• The complexity of the operation
• The nature of the business cycles in the market
• The intended use of the information
• The financial situation of the hotel
• The relationship with hotel owners

There are some minimum basic forecasting procedures and standards that must be used in all hotels in order to achieve accuracy in forecasting. These minimum standards include:

• Involvement of the General Manager,
• Finance Controller,
• Director of Marketing,
• Director of Sales,
• Revenue Management,
• Director of F&B

All above Head Departments are involved in the forecasting process. In hotels with Cluster Sales organizations, including Revenue Management, a representative of that group needs to be involved.

Use of some type of day-by-day tool in forecast occupancy for several months out.

• A method or format for segmenting types of rates (transient, group, and contract) used in estimating number of rooms sold and revenue from each segment for the month.
• A review and critique process on the accuracy of prior forecast and the assumptions that were used.
• Use of the Int’l Forecast program for:
  • Consolidating room occupancy and revenue information.
  • Forecasting other sales information based on appropriate variables (sales per room sold, etc.)
  • Forecasting department profit and deduct expenses based on the appropriate variables
    • Cost on volume,
    • Historical averages,
    • Percent to sales,
    • Fixed cost, etc.)

Weekly Forecasting

Accurate forecasting is vital to proper staff planning, both from a labor cost, as well as a customer satisfaction standpoint.
Vital information affecting the forecasts should be exchanged between departments through a weekly forecast meeting.
Accurate knowledge on every group from both Sales and Catering is the key for accurate forecasting and proper staffing.

Sales and Catering must, therefore, make the gathering of group-related information a normal part of their booking activity in order to come to the Forecast Meeting prepared to answer all questions.

Some hotels have continued to successfully use the Daily Forecast/Actual Summary, in the weekly forecasting process. Other hotels have developed other ways to accomplish the objective of forecasting volumes and comparing actual results to forecasted volumes.

A weekly forecast meeting provides a standard method of exchanging information relevant to the anticipated business volumes of the upcoming week, critique of last week’s business, and any effect this may have on the business volumes for the week being forecasted.

The Forecast Meeting is generally

held no later than Wednesday afternoon, and is attended by hotel managers and supervisors, including:

• • General Manager
  • Resident Manager (or Director of Operations)
  • Food & Beverage Director (or Director of Operations)
  • Director of Marketing
  • Director of Finance
  • Director of Catering
  • Executive Chef
  • Food & Beverage Outlet Mangers and/or Supervisors
  • Director of Services
  • Director of Reservation Sales
  • Front Office Manger
  • Any others, if appropriate (Director of Engineering)

The following sequence for the Forecasting Meeting is suggested

• Review the results of the previous week’s forecast with emphasis on conditions that adversely affected the forecast volume of business. Briefly review the previous week’s Labor Productivity Report.
• Briefly review the forecast business volume for the remainder of the current week with emphasis on adjusted volumes.
• Review next week’s room forecast in terms of Occupancy and House Guest counts.
• Review next week’s Sales groups with or without catering activity, and discuss their arrival and departure times and any special group needs.
• Review each day of the Catering Weekly with emphasis on established or anticipated habits of each group coming into the hotel and how the Food & Beverage outlets might be affected.
• Review tentative Food & Beverage volume forecasts and what changes are anticipated based on what has been discussed at the meeting.
• Final summary of the upcoming week.

Starting with Projection Data you collected from Analyzing Demand, At least 2 years ago