The massive eruption of big data has afforded the hospitality industry with abounding opportunities to better understand both their business and their guests to make intelligent and profitable revenue decisions. Ranging from product and technology capabilities to emerging new data sources, the amount of recent information for hotels to take in and process has been both vast and disparate. Unsurprisingly, there are no signs of this outpouring of data and its benefits stopping in 2017. In fact, one of this year’s biggest breakouts for maximizing revenue strategy is an evolving forecasting practice set to sweep the hospitality industry: futurecasting. In this article, IDeaS Revenue Solutions defines futurecasting and helps hoteliers understand how it could benefit their business.
Futurecasting is a practice used in many different industries to strategically plan for an organization’s future. It evaluates underlying industry dynamics, predictive analysis, and a variety of strategies to help develop an insightful vision of the future. In contemporary revenue management, it is quickly becoming the future of strategic hotel forecasting.
Hotel forecasting practices have conventionally focused on the algorithmic side of big data – looking at data sources such as historical results and economic factors, for example, to anticipate market demand. Hoteliers and revenue managers alike rely heavily on these traditional data sources and their performance-based numbers to influence, shape and evaluate what constitutes a profitable business strategy. However, progressive hotels are beginning to see a massive untapped pool of opportunity to dive even deeper into their data to extract and analyze the behavior-based facets of it.
Strategic revenue futurecasting builds upon traditional forecasting practices to look beyond the face value of a number to fully understand how and why a particular outcome occurred. Its practice fuses revenue management with marketing to help hotels not only understand the factors that are driving potential guests and enticing them to book direct, but to also determine the ideal price that makes them the most revenue at the lowest costs. This informed view of the future enables hotels to plan intelligently and make profitable decisions throughout the organization.
Many hotels have access to technologies that allow them to track basic shopper activity on their website; however, they have previously been fairly limited to high-level booking data and lost business data for only their brand.com website when forecasting demand. While they can typically see date ranges searched, time spent on each page, and room types or packages shoppers were interested in, their shoppers still remained largely anonymous. This is where the availability of travel intent data – and its implementation through futurecasting – has become critical for developing a hotel’s revenue strategy.
This specialized data uses search and booking data from third-party booking sites and OTAs to help quantify the demand a hotel can expect for future dates. This powerful market intelligence essentially puts names to faces, giving hotels human-focused insights (think: ages and hobbies, for example) so they can market strategically with more specific ad placements, experience packages and personalized offers that attract more direct bookings. Futurecasting takes the insights gained from travel intent data and layers it into forecasting’s traditional data to execute the most powerful and profitable marketing and revenue strategy possible.
Industry technology plays an extremely critical role in helping today’s hotels profit from this dynamic new practice. The ability to integrate information previously inaccessible to hotels (such as the relationships between intent to book and pricing) elevates a hotel’s forecast and its subsequent revenue opportunities, such as offering tailored package add-ons based on guest preferences. Technologies providing this extensive level of insight offer hotels distinct competitive advantage when it comes to pricing their rooms, personalizing marketing efforts and aligning the overall consumer experience across all booking channels.
The advantages of this advanced and innovative technology also address one of the biggest challenges that hotels face in operating and improving property performance: misalignment between their revenue management and marketing teams. By delivering insights that are relevant to the business goals of both departments, hotels will start to see this misalignment between departments dissipate. And with revenue management and marketing intimately collaborating through shared technology and data, they can better understand their desired guests enabling them to intelligently target and track profitable marketing campaigns. By using these insights, revenue management and their sales and marketing partners can align their goals, maximize their direct bookings, and most importantly, greatly accelerate their profitability.
For hotels looking to take full advantage of today’s cutting-edge technological capabilities and tomorrow’s innovative forecasting practices, futurecasting is in their future.