Has forecasting become a lost art?
— 10 experts shared their view
Robert Cross, the de facto Godfather of Revenue Management, stated "…everything starts with a day by day, segment by segment forecast", yet many hoteliers no longer produce one as part of their strategic process. Most of today's advanced revenue management systems do not generate one, instead of leaving the user to rely on a total hotel forecast and to trust the "black box" for the details.
Should hotels be producing a detailed long-term forecast, and if so, what are the benefits of doing so? How far out should they forecast and how often should they do it? The automated systems (only 15% of hotels have one!) can be very accurate at projecting the optimized results of an existing strategy, but are they effective when contemplating a change in strategy, as an increase in group rooms, eliminating an airline crew, or even a renovation? How do hotels that don't do it satisfy other stakeholders like senior leadership and owners, who may have an interest in understanding the detail behind the hotel's forecast, especially when recent performance has not met expectations?
Corporate Director Revenue Management Palladium Hotel Group
There is a very popular sentence in the marketing world... "Cash is King and Brand is Queen", in our little world call Revenue we could say "Forecast is King and YOY is Queen", with that I would like to point the importance of the Forecast in our daily task. From my point of view, the use of technology is going to change the way we make a Forecast ... we will have a faster and sometimes better accurate data, the use of Big data and artificial intelligent is going to kill the "ancient art" of forecasting and probably we are are going to be replaced by machines with no soul and no art, but better data.
On the other hand, sometimes I have the feeling in this VUCA world is becoming really difficult to make a decent forecast, the new art of this Revenue world woulb be improvising new strategies and have the capability of changing that in minutes.