Basic Hotel's Accounting Principles #12 Forecasting by Dino Leonandri

1. Hotel Basic Accounting and
Cost Control #12
By : Dino Leonandri

2. Forecasting
Forecasts are the financial documents that are used to update the operating
budget of an organization.
Forecasts are flexible and provide the possibilities open to the management
to carry out modifications in the operating budget during the operating cycle.
This permits the management to take into consideration changes caused by
the economic and market conditions as well as adapting to current trends.
Forecasts are used to update the budget so that it reflects current business
levels and conditions.
Forecasting involves using current information and combining this
information with established ratios and formulas to estimate or project future
business levels and operations. Forecasting is the key management tool
used to plan the details of the daily operations in the very short term such as
tomorrow, next week or next month

3. Forecasting
Generally, four types of historical patterns can be recognized: seasonal,
cyclical, trend, and random variations.
1. The seasonal pattern
2. The cyclical pattern
3. The trend pattern
4. Random variations

4. Forecasting
The seasonal pattern
The seasonal pattern exists when the series of data fluctuates in a
regular direction according to a particular period. This period could be
within a day (lunch as opposed to dinners); during the week (week days
as opposed to weekends); during the month (weekly variations within the
month caused for example by the spending patterns of the inhabitants of
the area in relation to their income flows); as well as the year (high
season as opposed to low season). Management should be able to
factor in such seasonal variations in their forecasts.
The cyclical pattern
The cyclical pattern results from the recurring and fluctuating levels of
activity that a business or economy will experience over a long period of
time. The five stages of the business cycle are growth, peak, recession,
trough and recovery. Due to their irregularity, frequency, magnitude and
duration variations it is much more difficult to make forecasts based on
the cyclical pattern. When plotted on a graph, it is similar to the seasonal
pattern except for the length of the pattern.

5. Forecasting
The trend pattern
The trend is the overall projection of the long-term forecast of the activity that
is being analyzed. Trends represent the general movement of a market or of
an activity. This movement is either upwards or downwards. In general, it is
best to move with the trends. This means that if the trend is upward, then
forecasts should reflect that upward tendency and also caution should be
exercised about making forecasts in situations where the trend is downward.
Trends can vary in length from short, to intermediate, to long term.
Random variations
Historical data are also affected by random variations. Random variation
simply indicates the absence of any pattern in the historical data. Statistical
tools such as random factor analysis are normally used to try and understand
if the outlying data is caused by an underlying trend or just simply a random
event. If the random data is caused by an underlying trend, that trend will
need to be addressed and remedied accordingly.

6. Forecasting of Room Revenue
Jan-21 ACTUAL ACTUAL ACTUAL ACTUAL ACTUAL ACTUAL ACTUAL FORECAST FORECAST FORECAST
FORECAST(onhand) 1 2 3 4 5 6 7 8 9 10 MTD
ROOMSALEABLEMTD 117 232 348 464 570 676 779 896 1013 1130 1130
ROOMSALEABLE 117 115 116 116 106 106 103 117 117 117 1130
Onhand 27 38 26 40 50 57 47 41 24 19 369
Occ% 23.08% 33.04% 22.41% 34.48% 47.17% 53.77% 45.63% 35.04% 20.51% 16.24% 32.65%
Arr 623,042 625,846 606,971 613,163 602,128 594,196 583,156 595,613 598,198 601,050 602,962
TotalRev 16,822,143 23,782,164 15,781,241 24,526,533 30,106,416 33,869,183 27,408,323 24,420,133 14,356,758 11,419,953 222,492,847
Budget 86 86 86 86 86 86 86 86 86 86 858
Occ% 55.00% 55.00% 55.00% 55.00% 55.00% 55.00% 55.00% 55.00% 55.00% 55.00% 55.00%
Arr 550,000 550,000 550,000 550,000 550,000 550,000 550,000 550,000 550,000 550,000 550,000
TotalRev 47,193,548 47,193,548 47,193,548 47,193,548 47,193,548 47,193,548 47,193,548 47,193,548 47,193,548 47,193,548 471,935,484
Variance -59 -48 -60 -46 -36 -29 -39 -45 -62 -67 -489
Occ% -56.01% -45.53% -56.96% -43.63% -34.10% -27.43% -36.96% -42.67% -58.86% -63.63% -31.35%
Arr 516,464 489,712 525,233 494,843 477,208 462,548 509,844 508,262 531,284 535,481 510,040
Totalrev (30,371,405) (23,411,384) (31,412,307) (22,667,015) (17,087,132) (13,324,365) (19,785,225) (22,773,415) (32,836,790) (35,773,595) (249,442,637)
FORECASTINLINEMTD 27 65 91 131 181 238 285 326 350 369 37
Occ% 23.08% 28.02% 26.15% 28.23% 31.75% 35.21% 36.59% 36.38% 34.55% 32.65% 3.27%
ARR 623,042 624,682 619,621 617,649 613,362 608,772 604,547 603,424 603,065 602,962 602,962
TOTALREV 16,822,143 40,604,307 56,385,548 80,912,081 111,018,497 144,887,680 172,296,003 196,716,136 211,072,894 222,492,847 22,249,285
TENDAYSFORECASTVSBUDGETJAN2021

7. Forecasting of Room Revenue
Jan-21 ACTUAL ACTUAL ACTUAL ACTUAL ACTUAL ACTUAL ACTUAL FORECAST FORECAST FORECAST
FORECAST 1 2 3 4 5 6 7 8 9 10 MTD
WALK IN 2 4 6 2 4 6 9 33
% 1.71% 3.48% 5.17% 1.72% 3.77% 5.66% 8.74% 0.00% 0.00% 0.00% 2.92%
ARR 652,892 692,148 619,834 619,834 692,148 630,853 634,526 #DIV/0! #DIV/0! #DIV/0! 645,379
REV 1,305,784 2,768,593 3,719,003 1,239,668 2,768,593 3,785,120 5,710,738 21,297,498
LONGSTAY -
% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
ARR #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!
REV -
CORPORATE 2 3 7 12 11 16 7 - - - 58
% 1.71% 2.61% 6.03% 10.34% 10.38% 15.09% 6.80% 0.00% 0.00% 0.00% 5.13%
ARR 652,892 641,873 659,976 650,137 631,855 631,662 628,571 #DIV/0! #DIV/0! #DIV/0! 639,826
REV 1,305,784 1,925,618 4,619,831 7,801,645 6,950,406 10,106,600 4,399,996 - - - 37,109,880
GOVERNMENT - - - - - - 1 - - - 1
% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.97% 0.00% 0.00% 0.00% 0.09%
ARR #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! 619,835 #DIV/0! #DIV/0! #DIV/0! 619,835
REV - - - - - - 619,835 - - - 619,835
MEETING, MICE / CORP & GOV - - - - - - - - - - -
% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
ARR #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!
REV - - - - - - - - - - -
3rd PARTY ONLINE 13 15 8 7 12 14 16 - - - 85
% 11.11% 13.04% 6.90% 6.03% 11.32% 13.21% 15.53% 0.00% 0.00% 0.00% 7.52%
ARR 567,877 560,233 565,415 546,745 528,560 558,356 556,817 #DIV/0! #DIV/0! #DIV/0! 555,355
REV 7,382,396 8,403,498 4,523,317 3,827,212 6,342,717 7,816,978 8,909,079 - - - 47,205,197
DIRECT HOTEL BOOKING 9 13 8 14 16 18 13 - - - 91
% 7.69% 11.30% 6.90% 12.07% 15.09% 16.98% 12.62% 0.00% 0.00% 0.00% 8.05%
ARR 649,219 664,335 619,834 648,169 637,912 623,507 630,006 #DIV/0! #DIV/0! #DIV/0! 638,815
REV 5,842,971 8,636,355 4,958,671 9,074,370 10,206,599 11,223,126 8,190,074 - - - 58,132,166
BW.COM - - - 1 - 1 - - - - 2
% 0.00% 0.00% 0.00% 0.86% 0.00% 0.94% 0.00% 0.00% 0.00% 0.00% 0.18%
ARR #DIV/0! #DIV/0! #DIV/0! 497,602 #DIV/0! 497,602 #DIV/0! #DIV/0! #DIV/0! #DIV/0! 497,602
REV - - - 497,602 - 497,602 - - - - 995,204
RETAIL AGENTS 1 - - - - - - - - - 1
% 0.85% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.09%
ARR 548,760 #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! 548,760
REV 548,760 - - - - - - - - - 548,760
GROUP SERIES/ PACKAGE - - - - - - - - - - -
% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
ARR #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!
REV - - - - - - - - - - -
WHOLESALER 2 7 3 6 11 8 10 - - - 47
% 1.71% 6.09% 2.59% 5.17% 10.38% 7.55% 9.71% 0.00% 0.00% 0.00% 4.16%
ARR 581,860 564,132 559,807 554,284 530,736 528,110 528,934 #DIV/0! #DIV/0! #DIV/0! 541,917
REV 1,163,719 3,948,926 1,679,421 3,325,702 5,838,099 4,224,876 5,289,339 - - - 25,470,082
TOTAL ONHAND + FORECAST 1 2 3 4 5 6 7 8 9 10 MTD
Room Sold 27 38 26 40 50 57 47 - - - 285
% 23.08% 33.04% 22.41% 34.48% 47.17% 53.77% 45.63% 0.00% 0.00% 0.00% 25.22%
ARR 601,616 603,010 606,971 613,163 586,756 594,196 583,156 #DIV/0! #DIV/0! #DIV/0! 596,776
REV 16,243,630 22,914,397 15,781,240 24,526,531 29,337,821 33,869,182 27,408,323 - - - 170,081,124
TEN DAYS FORECAST VS BUDGET JAN 2021

8. Forecasting of Room Revenue
MarketSegment Occ%BudgetMTD BudgetMTD BudgetByDay Budget10days ONHAND Occ%Onhand Varriance Occ%Varriance
Corporate 41.69% 1109 36 370 58 5.13% 312 -36.56%
Government 3.68% 98 3 33 1 0.09% 32 -3.60%
MICE 8.61% 229 7 76 1 0.09% 75 -8.52%
3rdPartyOnline 15.00% 399 13 133 87 7.70% 46 -7.30%
DirectHotel 15.19% 404 13 135 91 8.05% 44 -7.13%
Retail Agents 6.50% 173 6 58 1 0.09% 57 -6.42%
Wholeseller 9.32% 248 8 83 47 4.16% 36 -5.16%
100.00% 2660 86 887 286 25.31% 601 -74.69%
MarketSegment BudgetARR ONHAND Varriance
Corporate 550,045 639,826 89,780
Government 542,857 619,835 76,978
MICE 529,258 - (529,258)
3rdPartyOnline 556,391 554,028 (2,363)
DirectHotel 594,059 638,815 44,756
Retail Agents 529,480 548,760 19,280
Wholeseller 504,032 541,917 37,884
550,000 506,169 (37,563)
MarketSegment BudgetREV BudgetByDay Budget10days ONHAND Varriance
Corporate 610,000,000 19,677,419 196,774,194 37,109,880 159,664,314
Government 53,200,000 1,716,129 17,161,290 619,835 16,541,455
MICE 121,200,000 3,909,677 39,096,774 - 39,096,774
3rdPartyOnline 222,000,000 7,161,290 71,612,903 48,200,401 23,412,502
DirectHotel 240,000,000 7,741,935 77,419,355 58,132,166 19,287,189
Retail Agents 91,600,000 2,954,839 29,548,387 548,760 28,999,627
Wholeseller 125,000,000 4,032,258 40,322,581 25,470,082 14,852,499
1,463,000,000 47,193,548 471,935,484 170,081,124 301,854,360

9. THANK YOU
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