Forecasting and budgeting have never been more challenging for hoteliers than right now. As revenue teams prepare for the new challenges that 2022 may bring, many are considering how to put their long-term strategy ahead of their short-term forecast.
Here, four hoteliers from around the world talk to Duetto about how they are approaching this important industry conundrum:
Wilhelm Konrad Weber, Partner, SHS – Swiss Hospitality Solutions:
I’ve worked in revenue management for almost 20 years and I was always proud of my good forecasting abilities. Never was I as wrong as during the pandemic!
What do you do if what you used to do fails? Strategy is important here.
First, we must admit that algorithms are now smarter and faster in dealing with large numbers.
Once you admit that the computer is better at this, you must think ‘how do I redefine my role?’ And that’s about using the algorithm in a way that meets the strategic objectives of the organization. It's important to use the power of algorithms, and to combine it with a corporate strategy.
Victoria Curley, Group Revenue and Distribution Manager, Roomzzz Aparthotels:
We've really switched to focusing on what we can change. We ask: What can we impact in the day-to-day to yield results? What tools do we have that can make an impact for the wider business? And we’re looking at more long-term things instead of just the here and now of forecasting in the month and trying to look at granular data that doesn’t really exist now, because we're still so new into this ‘new normal’ of ‘what does a corporate week look like now?’ and trying to forecast for that. We're putting the emphasis on the strategy of the long-term goals of what we're trying to achieve.
Ryan Dance, Group Revenue Director for Malmaison, Hotel du Vin and Frasers Hospitality:
The most important part is the strategy, which is to understand the market, understand the data, understand the dynamics and then be able to react accordingly. Budget is a point in time. Forecast is a position that you believe is going to happen. And the strategy is about understanding the metrics so that you can respond accordingly to what's happening.
Gerk van der Poll, Director, Van der Valk Business:
Strategy can be the starting point, but it can never be a straight line of execution because of all these unknown factors that may force you to change your strategy. You need to be much more adaptable so that strategic changes can take place.
When it comes to forecasting and budgeting, you must start looking at other aspects of the current situation rather than looking at a rolling 12 months with a low, mid, and high season. Other elements must come into place. What we are doing right now is taking both historical data and looking at certain touchpoints. We're not specifically looking at one year as a whole and taking that to forecast or budget for a complete full year ahead. Rather, we’re looking at pieces of data or pieces of time. For example, our summer season is not that much affected by COVID, so we don’t need to look at comparative year-on-year data, we just need to look at how we are optimizing our segmentation for our separate products. For the rest of the business cycle, we are cutting it up into smaller pieces and putting different strategies in place on each piece of the puzzle. It’s not a straightforward exercise anymore.
Discover more on this topic. Watch our Industry Insights video for more insights: https://www.duettocloud.com/videos/how-can-and-should-hotels-put-strategy-before-forecast