FORECASTINGA 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-in’s• 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.

OrA 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.

DefinitionForecasting is a tool used for

predicting future demand based onpast 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 industryAsset 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 roomsNo 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.