You should aim at 5% maximum (+/-) variance for the next month, variance between your forecast and the actual results. Take the time to analyze the variances to understand, learn and improve your hotel forecast and revenue management decisions.
How much do the room nights or the ARR variance impact total variance? Study the forecast variance by day of the week and by segments.
A variance can also be caused by an incorrect on the books; before extracting your on the books, ensure that:
- The segmentation is correct
- Review all your definite groups. Evaluate the possible increase or decrease of the block. Ensure room blocks are well updated
- Evaluate your group tentative and apply a materialization factor
- Verify you do not have duplicate bookings
- Ensure that you do not have pending reservations not entered yet in the PMS
- Take out oversold rooms on expected cancellations and base your forecast on the number of rooms available to sell
- Every room block and reservations are attached to a correct rate or rate code.
The accuracy of your forecast is the key to the profitability or GOPPAR of your hotel. Other departments depend on it. Therefore, revenue managers should set the bar even sharper, and only allow ourselves a maximum of 3% variance.
