Forecasting is an important, if not crucial, tool for a successful business. Managers rely on well-researched forecasts that take into consideration all vital information for accuracy.
There are two types of forecasting – long- and short range.
Long rage forecasting requires the following information:
How mature is the product or service?
How is the economy of the country or region doing in relation to the product in question?
What special events may/can influence the business?
What hidden costs are involved?
Short term forecasting is used mostly for scheduling and production in the hotel business. The forecasting usually looks ahead one weak at a time. This type of forecasting must be done carefully, for it influences profitability to a great extent. Some of the above points, such as maturity of the product or overall economy do not have to be factored in when forecasting just a week ahead. To consider special events, the weather forecast, and to some extent previous week’s business and bookings will suffice.
Restaurant forecasting differs from hotel forecasting. (In both cases, many other points must be factored in). While a restaurant or bar located next to a sports arena will be very busy before and after an event, a hotel located next to the establishment catering to the same clientele will have little business during the event, but much on the previous day and after. A restaurant forecaster must take into
account sports events happening in the vicinity of the restaurant or bar, write ups of food critiques which may influence business volume, weather, pay days, holidays, graduations if the establishment is located near an educational institute, the time of the year, and many other factors. Hotel forecasters on the other hand, want to take into account the plans of associations for annual meetings and conventions, public relations programs, transportation schedules and longer-term developments.
Weekly forecasting should start Wednesday and Thursday for the week starting Sunday. This forecast is best distributed to all concerned on Friday and those who plan purchasing, production and scheduling.
Expected cover counts or occupied rooms forecasts serve planners best for production, purchasing, and scheduling.
Maitre d’hotels are responsible for forecasts in dining rooms, café managers for their outlets, and front office managers for occupancy.
Occupancy levels affect breakfast volumes, and conventions, pending on arrangements for all three-meal periods, and lounge traffic.
(For forecast form see The World Of the Restaurateur page 242 available by contacting firstname.lastname@example.org)
Forecast and actual results for each week must be compared to improve accuracy.
Short-term, 90-day forecasts must take into consideration seasonal fluctuations, but can follow the same guidelines as for weekly forecasts.
Detailed forecasts are more valuable for planning.
An establishment in need of a short-term loan can present to the bank and most likely expect a favourable outcome.
Hotel forecasting is more involved and requires co-ordinating all revenue-producing departments. They include – rooms division, food and beverage outlets including banquets and outside catering, garage, entertainment, laundry, and in some instances, telephone which is becoming a difficult department to manage due to new technologies becoming more popular with frequently traveling businessmen and public.
Room occupancy affects food and beverage outlets, particularly breakfast. Convention room occupancy may or may not affect breakfast business pending on arrangements of the organizer.
Bars and lounges are likely to be busier than normal around 5 p m if there is a convention. On the other hand, if cocktail hour receptions are booed bar traffic will be adversely affected.
Hotel forecasters must bade their predictions based on firm reservations, activities organized by city administration, civic events, official holidays, promotions of businesses in the area and walk ins.
The annual plan depends on the economy of the city, region, country, continent, or the world and requires input from institutions that maintain departments staffed by economists, regional governments, and federal statistics departments.
Such plans must be prepared by hotel and restaurant professionals with a good understanding of all types of operations, and have all the information available at their fingertips and the expectations of the management. This requires time and good-co-ordination.
Spreadsheets widely available can be used to speed up forecasting and dissemination of information.