![]() You can speed up the process slightly by using Excel and the right formulas to quickly calculate your lead time, but you still have to manually enter names, booking dates and arrival dates, and that can quickly eat into your time and prevent you from working on more strategic matters such as working on fair pricing strategies.Īnother more efficient method for calculating your lead times is using revenue management software. If, for the same booking, they reserve on the same day as arrival, then the lead time is 0 days.Īlthough the calculation is simple, calculating each guest’s lead time manually can take a lot of time, especially if you are a large hotel with a high level of occupancy. So, for example, if a guest makes a reservation on August 1st and they check in on August 15th, then the lead time for that reservation is 15 days. You just need to calculate the number of days between a guest making a reservation and their actual check-in date. Optimising your lead time is all about understanding the specific nuances of your booking window and finding the right balance, also taking into account your cancellation rate and no-show rate. ![]() For example, if you are filling rooms much quicker than your competitors then it could suggest that your prices are lower than the market value. If it is too long, then it might suggest that there is an issue with your pricing strategy. However, it’s not always as simple as aiming for a longer lead time. You can also plan promotions and price adjustments if you know that certain dates are going to be quiet and get those all-important occupancy rates up in advance. For example, the kitchen can buy supplies and plan menus in advance, and housekeeping can make sure they have enough staff on duty to manage busy periods (and, conversely, make sure there are fewer members of staff on duty during periods that are anticipated to be quiet). This is because each department in your hotel has enough notice to prepare for a guest’s arrival. The aim, as a revenue manager, is to optimise your lead time as this can lead to a significant increase in revenues.Ī longer lead time can help you anticipate revenues and optimise resource costs. Essentially, it is a formula used to calculate the time between a guest confirming a reservation at your hotel, and their arrival date. Lead time is a powerful KPI in revenue management that provides valuable insights into customer behaviour. What is lead time and how do you calculate it? Why is tracking it so important? Read on to find out. The obvious KPIs that you should be tracking include RevPAR and occupancy rates but tracking your lead time is equally important. That’s why it’s so important to have access to the right performance analytics. Part of this is down to instinct, but you also need to rely on the right data. This is the most effective method for increasing the level of revenue your business generates. As a hotel revenue manager, one of your core functions is understanding and anticipating customer behaviour so that you can make the right strategic decisions and optimise your prices accordingly.
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