Future Demand Data: What It Is And How Can It Help Hotels
Every business works on the principle of demand and supply. Demand is the collective want of the market, while supply is the collective capacity of an enterprise to fulfil that collective want. Hotels not only have to plan for present demand, but they also have to predict future demand as well, since they need to keep room inventory and product inventory ready. Future demand data for hotels is especially important.
One of the ways to present future demand is with the help of data. We will be discussing the role of future demand data in the hospitality industry.
What is Future Demand Data For Hotels?
Future Demand Data helps in predicting the future demand for any product or service. For hotels, it helps in determining how many guests will stay in each room over a given period. Some of the sources for future forecasts are customer preferences, marketing research, surveys, and various other sources.
Future demand data can help hotels understand where their business will head if they follow their current strategy or change their strategy. Hotels need data to improve their services because, without data, there cannot be insights, and without insights, no marketing or management strategy can work.
For hotels, future demand data will help hotel managers to predict what the guests will want from their hotel. It also helps keep track of trends, seasonality and unexpected events. They can set their goals and strategies accordingly.
For example, glamping is a new emerging segment. Campers who want to experience luxury will look out for glamping options, rather than sticking to camping. How, the camping resort will need to forecast the demand for glamping tents, and adjust inventory and rates accordingly? They can also put out surveys for their previous guests to check if they want to experience glamping.
Future Demand Data And Revenue Management
Future Demand Data is crucial for hotel revenue management. Revenue Management utilizes data for setting the right price for the rooms. If you can forecast the future demand, you can set the prices of the rooms accordingly and also modify cancellation policies, and amenities pricing and also promote offers.
Here are the ways by which future demand data can help in hotel revenue management:
Local Market Insights
There are hotels which don’t focus on the local market much. They may have different strategies but they should go all out in tapping the local market. The locals can be the most profitable segment. They can also provide you with additional revenue along with long-distance travellers. It is one of the utilization for future demand data for hotels.
With the work-from-home trend, work from hotels is also emerging. Future data can help you get insights into the local market.
Insight Into What Your Competitors Are Doing
In the hotel business, knowing about your competitors is essential if you want to stay in the game. Be it revenue management or compset analysis, future data can help you understand what your competitors are doing and how you can adjust the prices of your rooms, cancellation policy and cancellation policy accordingly.
For example, a competitor reduces prices even during the holiday season, while the other hotel is working out on new pricing and cancellation policy. With the help of future demand data, you can determine which competitor has the right strategy and which one doesn’t.
Helps Analyze Your Present Strategies
You can have the best hotel revenue management strategies in place and also attract staycation guests. The question is “What if the staycation trend dies off”. Is the hotel ready to deal with the decline in the popularity of staycation?
If you have the pricing strategies to deal with the change in trend, then it's great. If you don’t, then you will need to formulate a different approach. With the help of future demand data, you can determine whether your strategy needs a change or not.
Helps You In Finetuning Revenue Management Tactics
Dynamic Pricing is one of the key components of the revenue management strategy. However, it is not the only tactic. There are many strategies used by hotels such as OTAs, direct bookings, overbooking etc. Future Demand Data will help you decide whether or not these strategies are working in your favour. Revenue Management is a vast field that involves room pricing, amenities pricing, dynamic pricing, seasonality, costing and profits.
In short, future demand data is the need of the hour. You don’t have a magic ball to look into the future, but we can use data to have predictions about the future. In the olden days, hotels didn’t value data, but in this dynamic environment, you can ignore data at your own peril.
Bigfoot Hospitality is the one-stop solution for all your hospitality needs. Be it revenue management or marketing, we will be here to give you guidance and solutions. If you need outsourcing of certain business activities, we are the place for you! Read our blogs to know more about the hospitality industry.