This is How Future Demand Data Can Solve Your Revenue Management Struggles
Due to the developments in recent months, it has become clear that historical reference points do not offer the guidance they once did. But while this may make hotel forecasting seem impossible now, it’s more important than ever.
The COVID-19 pandemic has hit the hotel industry especially hard, and we are still facing great uncertainty.
Revenue managers are under pressure to maximize revenue from the little business a hotel has. At the same time, hoteliers find it challenging to set the correct prices in today’s shifting markets.
This has led the hospitality industry to talk more about forward-leaning data, how to access it and use it to optimize revenue and help to forecast demand more accurately.
Future Demand Data Provides a Unique Competitive Advantage for Hoteliers
To be successful in this new landscape, relying solely on on-the-books (OTB) data is not enough. Hoteliers must rethink their approach and adapt to the current market conditions by using advanced resources. Then they can move beyond the recovery period, find new demand pockets and revenue streams which might require developing new business models and/or new concept offerings.
Moving forward, the key to success for today's hoteliers will demand a proactive, data-driven approach supported by innovative tech tools and top-of-funnel demand information.
Top-of-funnel data will revolutionize the industry by providing hoteliers with the capability to better predict true demand based on booking and travel intent. On top of that, the ability to gain these insights automatically by supportive tech solutions will be a total game-changer and provide a unique competitive advantage for hoteliers.
“Historical reference points don't offer the guidance they once did. Hotel forecasting is extremely challenging in these times, however, looking into the future and planning for it has never been more important. Revenue managers must focus more on current and forward-looking data to predict demand and adjust pricing at the right time. Understanding true demand data in the future, like for example the intent to travel, will allow revenue managers to create realistic forecasts which will no longer be based on historical on-the-books data,” says Alexander Edström, CEO at Atomize.
Benefits of using Future Demand Data in Your Revenue Management Strategy
Using forward-looking data brings many valuable benefits you won’t get just from looking at historical data.
Among other things, using forward-leaning data can help you do the following:
Identify high-demand days and market anomalies to stay ahead of the game and maximize revenue.
Monitor hotel booking demand and booking intent in your geographical hotel market, 365 days into the future.
Stay ahead of your competition since the availability and adoption of future demand data is still extremely low in the industry.
Since this may sound a bit abstract, let’s look at three ways you can apply predictive, forward-looking market intelligence in day-to-day decision-making to maximize your revenue.
Leverage Localized Demand Insights
Forward-looking demand data takes into account how demand for your destination is trending in various source markets. Once you know which markets are interested in your city and which stay dates they’re searching for, you can create geo-targeted ads and promotions for this source market. Use this to direct more of the existing demand to your property and let your RMS support you with optimized rate suggestions.
Get Deeper Competitive Insights
Pair forward-looking demand data with competition insights to understand how your competitors are reacting to changing demand in the short and long term. Having this bird’s eye view of the market helps you accurately position your property among your primary compset and in the market overall. This means you reduce the risk of outpricing yourself all while maintaining optimal rates following real-time changes in the market.
Complete Market Overview for Refined Revenue Strategies
Top-of-funnel data looks beyond current competitor rates and trends on OTAs. It gives you the bigger picture by including GDS, flight, event, holiday data and much more. Since this is much more data than any team could ever collect and analyze manually, a business intelligence tool comes in handy. It will give you the chance to see your market and future demand as a whole instead of just individual snapshots. Use this information to refine your revenue strategy and optimize tactics and decisions both in the short and long term.
“Market conditions for hoteliers have changed drastically with fundamental shifts in traveler behavior and constantly evolving demand patterns. Understanding traveler search patterns and upper-funnel data has become essential for hotels to capture demand before their competition,” said Sean Fitzpatrick, CEO of OTA Insight.
In AtomizeRMS the users will be able to Identify high demand days and market anomalies. The demand data from Market Insight will be processed together with Atomize’s other data sources, including both historical and future on the books data, to identify dates with high future revenue opportunities.
How Can I as a Hotelier Get Access to Forward-Looking Data?
Until recently, OTAs have mostly possessed a monopoly on forward-looking demand data.
Business intelligence tools like OTA Insight’s Market Insight can now reveal this data to hotels providing hoteliers with aggregated data sets that reflect hotel booking demand and travel intent in any geographical hotel market, 365 days into the future.
To take things a step further and ensure rates are always optimized in real-time, this data can be fed directly into an RMS to improve rate recommendations. A recent partnership between Atomize RMS and Market Insight enables hotels to do exactly that and to better navigate current and future markets by providing more insight into the volume of travelers searching for and arriving in their respective markets.
For a hotelier, this brings a unique competitive advantage and provides better conditions to predict, forecast, and boost future business, revenue, and profitability.