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Revenue Forecasting and Demand based pricing

Revenue Forecasting and Demand based pricing

OTA management is not simply updating rooms and prices in the backend, moreover it is about revenue forecasting and demand based pricing. In general, revenue forecasting in a hotel’s context is an incredibly valuable practice that helps hotels predict the time frames throughout the year that will bring them higher or lower than normal occupancy, demand and revenue. Secondly, demand based pricing is a strategic practice, is a strategy that takes into account known periods of high demand and establishes prices accordingly to maximize sales over a given period. Revenue FACTORY is a revenue management company which believes strategic approaches like revenue forecasting and demand based pricing while managing OTA sales for our partnering hotels and resorts.

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Revenue Forecasting and Demand based pricing levers

For accurate revenue management forecasts, it is important that hoteliers have detailed data that contains both historical and future information. The historical data should include the number of occupied rooms, as well as the achieved revenue by market segment per day. Dynamic pricing, also known as time-based pricing, is a revenue-management strategy employed by various industries, involving real-time tweaking of prices of products or services on the basis of their demand and supply.

Revenue Forecasting:

OTAs are the most effective and highly dependable distribution channels for current scenario. Revenue FACTORY’s revenue forecasting strategy, is intended to estimate the expected future demand for our partner hotels and resorts so they can manage that demand to achieve the hotel’s ultimate revenue objectives from their OTA channels.

Accurate Forecasting:

Accuracy in demand forecasting is a major challenge face buy hoteliers and revenue management companies. Accurate forecasts are important in revenue management because not only do they influence rate decisions and strategies, but they also impact any displacement evaluations for potential group business. Our revenue managers give ultimate attention to accurate forecasting to generate maximum results for our partner hotels and resorts.

Occupancy Forecasting:

Once a Revenue Manager is aware of both the internal and external supply and demand factors they can then start to forecast more accurately as to how each market segment will perform each week and set rates accordingly. Where there are periods of low demand, this is where the hotel needs to create their own demand through promotions or targeting for group or conference business.

Dynamic Pricing:

In the early days of revenue management yield managers used to work with price BAR levels. However this practice in the age of dynamic pricing is a bit outdated. It limits you to work only within a predefined set of rates. Revenue FACTORY prefers with a fully flexible pricing matrix which allows for any rate that adds value and align with our revenue forecasting and demand based pricing.