1. Forecasting Accuracy

2. Forecasting:
The ultimate resource for anticipating the future performance of rooms, space, revenues and profits based on the analysis of available pertinent data.

3. Why is forecasting so critical?
Forecasting leads to efficient planning
and decision making for all departments, and most importantly it is one of the
drivers of pricing.

5. Prism Hotels and Resorts Forecast Accuracy for October, 2015:
August’s Forecast for October = +0.4%
(equates to +$69,003)
September’s Forecast for October = +2.7%
(equates to +$412,353)
October 1 Forecast = +4.6%
(equates to +$687,636)

7. Your Hotel’s Forecast Accuracy
Why is accuracy so important?
How is it calculated?
Where do I find the accuracy %?

8. The accuracy of the forecast is essential because the forecast is the main driver of the pricing/room allocation decisions, checkbooks, cash requests…
Inaccurate forecasts or predictions will diminish the hotel's revenues and profit margin.

9. Calculating Forecast Accuracy
Total Revenue Variance Percentage = (Actual Revenue – Forecast Revenue) Forecasted Revenue

10. Finding Forecast Accuracy
In ProfitSword, Follow this path…
Site Reports, under Monthly Reports, FC Accuracy
Prism Hotel
Prism Hotel

11. Prism Hotel

12. Layering of Rooms Forecast
Rooms Forecasting Fundamentals:
Contract business
Group
Transient
Rebates
Other Revenue
TOTAL HOTEL FORECAST
ROOMS
CATERING
OTHER
Contract
Local
Retail
Group
Spa
Transient AV
Food and Beverage
Golf
Now that we understand how important the forecast accuracy is, and how to calculate and where to find…how do we build an accurate forecast?
Start with what we know.

13. Forecasting Contract/Crew
Layer in manifest, rooming list received from the contract/crew rooms contact

14. Forecasting Group Step #1: Step #2:
Layer in WASHED definite room nights by segmentation and rate
Step #2:
Layer in to-be’s – segmentation and rate
How do you forecast “to-be’s”?
Want to spend some time on group forecasting. As a company, our group forecasting for December in Oct was -16.9%, in November for December improved to -12.2%, and 30 days out for December we were off 7.9%. How do we improve on these numbers

15. Let’s Talk Slippage…

18. Let’s Talk Slippage…
Why is this accuracy so important when forecasting group slippage?
How do you predict group slippage at your hotel?

19. Calculating Group Slippage
Forecasted Slippage = Contracted Rooms – Forecasted Rooms
Example: Group X is arriving in 9 months. They have contracted 50 total rooms with the hotel. We are forecasting 40 based on historical pickup – 40 = 10 room forecasted slippage
Forecasted Slippage Percentage = (Forecast Slippage/Contract) x 100
(10 / 50) x 100 = 20% forecasted slippage percent
Actual Slippage = Contract – Actuals = Actual Slippage
Example: Group Y stayed last month. They contracted 100 rooms,
but only picked up – 82 = 18 rooms actual slippage
Actual Slippage Percentage = (Actual Slippage/Contract) x 100
Actual Slippage Percentage (18 / 100) x 100=18%

20. Best Practices: Forecasting Group
Wash Group Definites
Group Pace
Important to note that rooms usually pick up on a bell curve.
The top of that bell curve is called the peak – that includes dates with the most room nights.
The ends of the curve are called the shoulders – least amount of rooms.

21. Forecasting Transient
“The most reliable way to forecast the future is to understand the present” John Naisbitt, Author of Megatrends
PAST
NOW
Room Nights
Pace
Mix
Booking Window
ADR/Revenue
Seasonality
Rebates
Demand by Segment
Other Revenue
Special Events
Events Impacting Results
Market Compression
Economic Climate
Unconstrained Demand
Arrivals by day of week/LOS and Rate
Cancellations and No Shows

22. This all leads to the future…

23. Forecasting Rebates Rebates:
Part of the room rate that is returned directly to the guest or applied to the master account.
Group rebate / group rooms sold = group rebates per room night
Best Practices for Tracking Group Rebates

24. Forecasting Other Revenue
GNS, part day revenues, service failures
Other revenue / total rooms sold (excluding comps) = other revenue per room night

25. Rooms Forecast is just the first portion to the
Total Hotel Forecast:
ROOMS
CATERING
OTHER
Group
Local
Retail
Contract
Spa
Transient AV
Food and Beverage
Golf

26. Life of a Forecast
Revenues updated daily in PS drive inventory/pricing decisions; update month end forecasts, labor cost analysis, profit and NOI

27. Forecasting Pitfalls to Avoid
Over-Forecasting
High rooms forecast, low remaining supply = too restrictive inventory and pricing, higher rates and limited discounts.
Potential for turning away needed business
Over-staffing
Under-Forecasting
Low rooms forecast, high remaining supply = open inventory and pricing
Lower rates and discounts remain open, potential for leaving $ on the table.
Under-staffing

28. Forecasting is a Team Effort

29. Now….How Do I Forecast Expenses?
Is it possible to generate a real-time P&L during the month? YES!!!! (with a little bit of effort on your part) 1) View the P&L Report in PS 2) Set columns to Forecast, Budget, Last Year or customize to your specific needs 3) Updating forecasted expenses a) Set up drivers where applicable b) Revised fixed expenses as needed c) Update non-recurring items or one time expenses

30. 2016 Forecasting Accuracy Expectations
90 Days Out = 7%
60 Days Out = 5%
30 Days Out = 3%