As the markets moves faster and booking windows tighten, hotel revenue management are relying less on historical data for their revenue management needs and more on forward looking projections. With the past economic downturns of 2001 and 2008 and the rise of online 3rd party travel agencies, the hotel market has grown more volatile over the past decade. With the recent economic crash, historical data lost its key significance. You may look at how peaks and troughs shifting throughout the year but couldn’t make comparisons between years. Forward-looking data plays a huge part in how hotels are positioning themselves. Hotels are now starting to load rates and inventory availability up to two years in advance so future pricing data is allowing them to benchmark and position themselves in the marketplace.
The volatility is partly tide to the rise of mobile booking. The biggest challenge is the whole evolution of mobile devices meaning that people are more willing to wait until the last minute to book something. As a revenue manager in a hotel, you have to have a steel stomach because you may sit there nothing on the books and there’s a fine balance if your hotel is going to be empty or full. With sites like Expedia, Hotel Tonight, Priceline and Hotwire, the consumer is starting to hold it until a few days or sometimes just few hours before arrival. With this new dynamic in play and consumers ability to shop at will, we see the historical analysis isn’t always right because of this new phenomenon and fast-changing market.