Revenue Management Glossary

Advanced Forecast (Linear Method)

Definition

The Advanced Forecast, or Linear Method, is a forecasting technique that combines current on-the-books (OTB) reservations with expected future bookings to predict demand. The expected bookings are calculated by multiplying the average daily pick-up rate by the number of remaining days. This method is used by revenue managers to make accurate predictions of occupancy and optimize room rates.

How to use it

Revenue managers use the Advanced Forecast to predict future demand more accurately by factoring in current bookings and expected pick-up. This forecast helps in setting dynamic pricing, planning for high-demand periods, and managing room availability. By using the Linear Method, hoteliers can adjust rates based on the forecasted occupancy and avoid overpricing or underpricing rooms.

Formula

Advanced Forecast (Linear Method) = On-the-Books (OTB) + Expected Pick-Up (PU) Where: Expected Pick-Up (PU) = Average Daily Pick-Up × Remaining Days

Related Terms

Forecasting Models, Pick-Up Rate, On-the-Books (OTB), Revenue per Available Room (RevPAR), Dynamic Pricing
“The Advanced Forecast (Linear Method) gives revenue managers a precise tool to predict future bookings, optimize pricing, and ensure maximum occupancy and revenue by accurately forecasting demand.”

Hendrik Niehues

Hendrik Niehues
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