Watch the Recap:
Sometimes it can feel like part of the job description for revenue managers is knowing the future. If we could, that would be amazing. But with the right tools, data, and process, you can get surprisingly close.
That’s exactly what we covered in our recent webinar, Forecast Before Bookings Arrive.
How Much Can You Rely on Historical Data?
During the webinar, we found that many of you lean on historical data when creating forecasts, and you should. Historical performance provides valuable context and helps establish a baseline for what normal demand patterns look like. But it’s important to understand the blind spots.
We’re always saying, “the market is changing,” because it is. Traveler behavior varies; economic conditions shift, and demand patterns that worked last year may not look the same this year. Even changes happening in neighboring destinations can influence demand in your market.
Historical data should be the starting point of your forecast, not the entire thing.
Inventory Changes
Your inventory can look completely different from year to year. New unit acquisitions, lost properties, renovations, amenity upgrades, and changes in unit mix can all impact performance and make year-over-year comparisons difficult.
If your portfolio isn’t the same as it was last year, your forecast can’t rely solely on last year’s numbers. Understanding how inventory has changed helps ensure you’re making accurate comparisons and setting realistic expectations.
Local Events
Many local governments are finding new ways to engage with their communities, and travelers notice.
New festivals, sporting events, concerts, and community gatherings are constantly being added to local calendars. That’s why staying connected with local organizations, tourism boards, and community groups is so important.
Ideally, you want to know about major events long before your guests do. And if possible, before your competitors do too. The earlier these opportunities are reflected in your forecast, the more time you have to adjust rates and maximize revenue.
Major Destination Changes
Your destination matters, and major shifts can have a significant impact on demand.
New attractions, infrastructure projects, airline routes, regulatory changes, and even climate-related events can dramatically change how travelers view a market. Some destinations experience rapid growth, while others see demand soften for reasons outside a property manager’s control.
Keeping an eye on what’s happening in your destination helps you forecast the future instead of reporting on the past.
Understanding Market Conditions
Once you’ve reviewed your historical performance, it’s time to look at the market around you. Forecasting is bigger than understanding your company. You have to develop a deep understanding of the market and what “normal” looks like, and how to react when conditions are out of the ordinary.
Market data can help you identify emerging demand trends, changes in competitor pricing, occupancy shifts, and traveler behavior patterns before they show up in your own booking data.
Ask Yourself:
Are my expectations of the market and the conditions of the market aligned?
If the answer is no, your forecast needs another look.
Why Revenue Managers Need to Be Local Event Experts
Keeping up with your local event calendar is critical. But don’t stop there.
You should also monitor the event calendars of nearby drive-to markets and surrounding destinations. Travelers plan trips around regional events, and demand can spill over into neighboring markets.
You never want to celebrate a booked night only to discover later that a major concert, tournament, or festival came to town, and you could have charged $500 more for the stay.
Event awareness gives you the opportunity to price proactively instead of reacting after demand arrives.
How Do You Forecast Demand Before Bookings Arrive?
This is where all the pieces come together.
Historical performance, market conditions, inventory changes, event data, booking pace, and destination trends all help paint a picture of future demand.
Instead of asking, “What happened last year?” the better question is, “Based on everything I know today, what is likely to happen next?”
Strong demand forecasting isn’t about being perfect. It’s about making the most informed decision possible with the information available. The earlier you can identify periods of high demand, low demand, or unexpected shifts, the more time you have to respond.
Setting Initial Rates
Once you’ve built your forecast, it’s time to put it into action.
Your initial rates should reflect the demand you expect. If demand indicators suggest a stronger season ahead, your pricing should account for it. If the market is softening, pricing strategies may need to adapt accordingly.
Your initial rates don’t need to be your stopping place. You’re starting from an informed position and making adjustments as new data becomes available.
Think of your initial rates as your first forecast-driven decision.
Are You Monitoring Booking Pace?
This step is often overlooked.
Your forecast should never be something you build once and forget. Booking pace provides one of the clearest signals about whether demand is tracking with expectations.
Are bookings arriving faster than anticipated? Slower? Are certain unit types outperforming others?
Checking your booking pace weekly helps you identify changes early and make proactive decisions before small issues become larger revenue challenges.
If you want a deeper look into why monitoring your rates matters, be sure to watch the replay of the Weekly Revenue Audit webinar.
Adjust Strategically
No forecast will be perfect, and that’s okay.
The best revenue managers aren’t the ones who always predict the future accurately. They’re the ones who recognize changes quickly and adapt.
As new booking data arrives, events are announced, market conditions shift, or demand trends evolve, revisit your forecast and adjust your rates accordingly.
Forecasting is an ongoing process that turns uncertainty into informed decision-making.
You can’t know the future, but you can be ready for it.