FORECASTING

A Statistical Analysis

To guess is cheap.. To guess wrongly is expensive..

Contents
Meaning Definition Importance Asset allocation Staffing levels Inventory availability Forecasting formula Factors Forecasting room availability Forecasting data Number of expected room arivals

Number of expected walk-ins Number of expected room stay-overs Number of expected no show rooms No of expected room understays. Number of room checkouts.

Definition
Forecasting is a process of predicting or estimating the future based on past & present data. Or A planning tool that helps management in its attempts to cope with the uncertainly of the future, relying mainly on data from the past and present and analysis of trends.

Importance
It provides information about the potential future events & their consequences for the firm. It is used by companies to determine how to allocate their budgets for an upcoming period of time. It increases the confidence of the management to make important decisions.

Definition
Forecasting is a tool used for predicting future demand based on past demand information

 It basically helps us/you to know approximately derive a future value having known its past and present values. Ex: Pharmaceutical company

How is it useful hotel industry

Asset allocation: hotel can predict from the forecast what demand may be placed on the infrastructure. Ex: helps for Engineering & Maintenance. Staffing levels: depending on the data that is extracted from forecasting hotel management can easily plan the staff for the particular period of time. Ex: planning duty roster and recruiting employees in case of more requirement. Inventory availability: on above two basis we can do the inventory can made for particular time. Ex: No covers reserved for that day @ inventory can be conducted.

Forecasting formula
Total no of rooms No of 000 (-) No of rooms stopovers (-) No of rooms reservation* %age of no shows (+) No of rooms under stay (+) No of rooms reservation (-) No of rooms overstay (-) ________________________________________ Total no of rooms available for sale

SAMPLE FORECASTING METHODS

Ten day method :
Done for every 10 days, starting from first day of every month. for this daily forecasted occupancy figures, including room arrivals, room departures, rooms sold & no of guests. No .of group commitments with a listing of each group name , arrival & departure dates, no of rooms reserved, no of guests & perhaps quoted room rates. A compression of historical periods forecasted and actual room covered and occupancy percentage. this is carried for all major days of the hotel business.

Three day method

Three day forecast is an updated report that reflects a more correct estimate of room availability. Three day forecast is intended to guide management in fine-tuning employees schedules and adjusting room availability information. Mainly done for overcoming of two half week business.