Forecasting is a
procedure of foreseeing or assessing the future focused around over a
significant time span information. It gives data about the potential future
occasions and their results for the organization. It may not decrease the
inconveniences and instability without bounds. In any case, it expands the
trust of the organization to settle on imperative choices or decisions.
Estimating is the premise of commencing. Determining utilization numerous
factual methods. In this way, it is likewise called as Statistical Analysis.
Forecasting is very
essential in any business. Since, it
provides a platform where managers can work efficiently and make
important decisions. Every business organization has certain goals or
objectives, to achieve those goals and objective forecasting plays a vital
role. It a method or technique to identify the future path of any organization
by studying the past and present condition of the business. It is the basis
for making planning premises which are
determined through the utilization of numerous factual methods or statistical
methods. Forecasting may be of any segment of the business by which it keeps
tight control over the business.
Forecasting is a
fundamental to all the business, whatever the size. In the case of Hotel Rooms forecasting for the
hotel future performance, its very important to know or anticipate future of
the hotel by its Occupancy, Average Daily Rate and Revenue per Available Rooms.
Forecasting is a dynamic part of the business strategy so it leads to the
efficient planning for and decision making to all the departments and most
importantly it is one of the driver of pricing. Hotel rooms are the major
portion of the earning. So It includes the future events , holidays, weekends
and weekends trends, unconstrained demand and current trends. An accurate
forecast will help to define short term as well as long term strategies related
to pricing, yielding, discounting and service to the customers.
So, Accurate
forecasting is one of the way to find out the future use hotel rooms,
durability or the length of the stay for different category of the people
staying in the hotel. This also includes forecasting of the hotel’s revenues
and the profit margin. This helps to determine the improvement and generation
of the income or revenue from the systematic management of the rooms which
creates a larger impact in the hotel industry to achieve the goals and
objectives.
Most of the hotels they
use automated system to forecast the Hotels revenue called Revenue Management
Systems and some of the hotels uses manual excel based approach. Due to the
advancement in technology as well as service matters a lot so hotels invest a
lot in automated forecasting system to know the exact revenue and profit margin
in the future.
Forecasting in hotels
can be divided in to three types
1.
Occupancy Forecast
2.
Demand Forecast
3.
Revenue Forecast
It is not possible to
accurately forecast the future. Because of the qualitative nature of
forecasting, a hotels can come up with different scenarios depending upon the
interpretation of the data. For this reason, organizations should never rely
100 percent on any forecasting method. However, an hotels can effectively use
forecasting with other tools of analysis to give the organization the best
possible information about the future. Making a decision on a bad forecast can
result in financial ruin for the hotels, so an hotels should never base
decisions solely on a forecast.
So ,Forecasting to have
its drawbacks. Some of the drawbacks of the forecasting are :
1.
Forecasting is time consuming since the
collection and analysis part related to past, present and future involves lots
of time and money. So, Many hotels don’t do forecasting because of the high
cost and time.
2.
Forecasting related to prediction of
future events but it cannot guarantee that the events will be true or its going
to take place in the future. It’s only the determination and while comparing
the long term and short term forecasting, long term forecasting are less
accurate than short term forecasting.
3.
Forecasting is based on the past events,
if the data are not accurate it many lead to the wrong path.
4.
It requires proper guidance, skills or
judgement as a researcher or a as a part of manager. It may go other way due to
the wrong assumptions or skills.
5.
Hotels sometime faces continuity in
services, no-show in rooms, extended stay- over rooms or walk –ins guest
creates problem as per forecasted.
Therefore,
Correct data of the past , best use of the statistical tools to forecast, skill
and judgemental manpower are need to determine the future path of the business
or any organization.
