Which aspects of life and business has the pandemic not impacted? It’s hard to come up with any.
Especially when you look at the hospitality industry, barely anything is as it was one or two years ago.
One thing has become even more important though: a revenue manager’s ability to understand the market, predict demand and form an optimized, adaptable pricing strategy.
Running your property without this is like letting go of your ship’s rudder in the middle of a storm.
But where do you get the data you need to take back control of your rudder and steer your business through these uncertain times?
Adjusting to a new demand landscape
While many regions saw positive developments throughout 2021, the demand landscape in most markets still remains different from pre-Covid times.
Shorter lead times, shifted primary source markets and changed guest requirements (e.g. regarding cancellation policies and value for money) create difficult and often unpredictable situations for hoteliers. Not having reliable reference points to base forecasts on makes things even more challenging.
Luckily, there are ways to make well-informed pricing and distribution decisions even in the most trying times. In the past, you may have looked to historical data for the needed insights. However, it no longer offers the guidance it once did. That’s why it’s important to expand the data sets you use for your demand predictions and pricing calculations. It’s time to begin taking advantage of forward-looking data.
Why historical data is no longer the golden standard
Since early 2020, well-established travel patterns across all segments have been committed to the history books. Today, travel corridors and entry rules based on people’s vaccination status have a stronger impact on destination choices than any holiday season or promotional deal ever did in the past.
Lead times also changed dramatically. Travellers now prefer to book last-minute to reduce the risk of sudden new restrictions. Traditional high and low seasons are also less pronounced as people travel closer to home and the MICE industry is still rebooting.
Combined, this reduces the significance of historical data and the insights it offers. Of course, it’s still a valuable indicator of what your property can achieve. Therefore you shouldn’t completely disregard it. But the shifted markets mean that live, forward-looking data deserves a bigger role in your pricing strategy. Moving forward, it’s the key to optimizing your rates, capturing bookings and driving the most revenue possible.
A closer look at future-facing demand data
Future-facing data describes top-of-funnel information that helps you anticipate future market demand and trends. Having access to real-time forward-looking data allows you to act quickly and make the most of all emerging revenue opportunities.
Here are some examples of forward-looking data:
- Flight and hotel search volume on online travel portals and search engines
- Source market data on holidays, alternative lodging, and meta-review sites data.
- Upcoming events and holidays in your region and your primary source markets
- Search pressure on search engines (e.g., Google)
- Competitor insights (e.g. pricing for dates in the future, availability, future hotel arrivals in a destination such as Demand360)
You’ve likely experienced firsthand how difficult it is to find, collect and collate this data manually. As a result, revenue opportunities pass you by despite your hard work.
The most time- and cost-effective solution to this issue is to leverage a business intelligence solution like Market Insight. It handles the research, data collection and collation for you. This leaves you more time for analysis and decision-making because you skip the manual research process.
Three benefits of using forward-looking data in your revenue and distribution strategy
Leveraging forward-looking demand data in revenue management has many advantages. Let’s go over the three most important ones.
- Ability to seize more revenue opportunities
Forward-looking data reveals the first signs of demand, like when more people run flight or hotel searches. Seeing these initial signs well in advance enables you to adjust your prices or offers in time and make the most of demand shifts. Feed this data directly into your revenue management system (RMS), so it can use this information for automatic rate updates.
- More accurate forecasting
Using forward-looking information is the only way to create accurate forecasts during times when historical data isn’t reliable. It gives you the ability to include more external data points into your forecasting for a more trustworthy result.
- Targeted promotions and ad campaigns
Source market data reveals where people are currently searching for your destination. It can also show which guest demographic is looking, which length of stay they’re checking and which weekday they prefer.
Getting the most out of forward-looking data by integrating it into your RMS
As we’ve established, future-facing data is a valuable resource for getting a reliable picture of the market and forming long-term pricing strategies. In short, it gives you the chance to prepare for travel rebound as well as future high and low seasons.
But that’s by far not all you can do with forward-looking data. Take things a step further and leverage it to optimize rates in real time whenever the market shifts. You have two ways of doing that.
- You can manually collect and analyze the data and make pricing decisions accordingly.
- You can use an RMS that leverages real-time future-facing data for its automatic live rate updates.
Without a doubt, option two is faster and more effective.
But how can you implement it? And what other steps should you take to get the most out of your future-facing data?
Download our latest eBook The Ultimate Guide to Using Forward-Looking Demand Data to Maximize Revenue for detailed guidance.
In this free eBook you’ll learn:
- More about how future-facing demand insights add value to your whole operations (think: a higher ADR and boosted ROI on marketing spend)
- Which tools you need to automate the collection and use of your forward-looking data (they’re not as complex or expensive as you might think!)
- Which benefits and results you can expect at your property (Spoiler: other hotels are already following our advice and have seen RevPAR increases anywhere from 5% to 20%)
If you could use results like that at your property, download the free eBook to unlock the power of forward-looking data at your hotel.
What are you waiting for?