is a process, which express an outcome of the business in advance. Forecasting
is one of the most important parts of planning strategy. All companies
operation is based on forecasting but not all hotels have useful forecasting
systems. Some of the important forecasting techniques, which are used in the
revenue management system of the hospitality industry, are Average Approach,
Drift Approach, and Time series methods. Forecasting can predict the number of
arrival guests in low or high season to help to set the price or promotion in
each season. Forecasting also can estimate the expenses such as food cost, how
many breakfast meals needed.
of benefits of forecasting is that business bases on what has happened in the
past and the company can predict what will happen in the future. By using value
information gathered from the past, hotel can change strategies at the right
time or make decisions for the hotel in the future. From that, the hotel will
develop stronger, operate stably and more profitable. By implementing regular
forecasting activities, hotels will get more outlooks. It can help the hotel to
have a look ahead to change market trends, create a new trend or catch up with
the other hand, Forecasting also has some disadvantages that affect on the
business operation. The problem that all businesses faced is wrong prediction.
Although business analysts have rigorously gathered data but there are likely
to have a flaw in gathering information or unexpected changes in the market
such as sudden drop in consumer demand. So no matter how carefully analyzed,
there is always the risk of inaccurate forecasting. Therefore, hotels should
not be overused in the analytical results and forecasts of the future.
Contingency plans should be planned to help businesses to be able to adapt to
the sudden change of the market.