Revenue Driver Based Forecast

Summary

How to base your forecast on a Revenue Driver, e.g occupancy/guests from rooms or revenue/covers from another profit center.

Intended Users

Profit Center Owners.

Instructions

If you want this profit center to use, for example, occupancy from rooms or revenue/covers from another profit center, go into Configuration Settings and tick Revenue Driver. Click on the Tools menu and choose Revenue Driver.

Revenue Driver 2.PNG
Revenue Driver 1.PNG

1. When activating Revenue Driver, you also have two other choices to make.

– Use Seasons to calculate Revenue Drivers. This will take into account Seasons when calculating the forecast. Please go to point 12 to see how season based revenue driver works.

– Auto Save on revenue driver change. This will save the forecast whenever the driver changes.

2. Use the drop down menus to define which segment (if enabled) you want to build a driver for. Then choose the source (in this case Hotel, which means rooms). You can also define which segments within the source you want to build the driver from.

3. Choose if you want the calculations by weekdays or just as a total (unticked radio box).

4. After you have defined settings, click on the + sign and the rule for this segment is moved up in the rate grid list. You may build several drivers for one segment or department.

5. After all the rules have been created, choose if you want the entire forecast to be based on the rule. 100% means everything, but if you want to revise e.g. 30% of the revenue manually, change the cell with percentage to 70. If you have a positive change in the revenue with 10% on specific days or in total, you can change the percentage to 110%.

6. You can now define capture ratio for both cover/units and rates. An easy way of letting the system help you is by clicking on one of the two blue buttons, From Budget or From History. Please note that you may untick both percentage (covers or units) and Avg. Rev in the two radio buttons.

7. From Budget means that PMI splits the budgeted data per day based on last year’s actual figures. It will suggest the same average check, but different number of covers each day. In other words, PMI calculates the budgeted capture ratio of occupancy; e.g. if your budget is 100 covers and guest nights are budgeted at 1000, the capture ratio would be 10%.

8. From History means that PMI calculates each departmental segment individually, giving you different averages for each segment, and different average rates, based on last year’s actual figures. E.g. if you had 10 guests, on average, last year on Mondays and the guest night occupancy was, on average, 100, PMI will calculate 10% of guest nights as the capture ratio for this period.

9. Please note that you may calculate for just some of the rules as well; use the radio button next to the rule to activate or deactivate for calculation.

10. You may manually revise the ratios directly in the cells at any time. You can also make a New Period for different seasons that influence the average revenue, e.g summer is low season with guests spending less money, in average, in the restaurant, than in the autumn with conference guest, spending more in average.

11. Make sure that you save the data afterwards.

Revenue Driver 3.PNG

12. When choosing to base you driver on seasons, the driver will set it self to be based on guest nights by default. Should you prefer something else you need to delete the default row and add a new.

Season driver.jpg
  1. Make sure to look at the correct season before you start looking at the driver.
  2. The segments are added here by default Guest Nights. You can remove the driver by clicking the trash bin.
  3. Add new setting in the dropdown lists.
  4. Should you want this to affect all seasons you click default and then the wizzard.

How to Submit to Forecast

If you have more than one year of history for your department in PMI, then you can choose the option to use seasons to calculate Revenue Drivers. You define your Seasons by creating a new calendar for your department. The advantage of using Seasons is if you have periods (seasons) with similar activity for more than a month, you can improve your forecasting accuracy, while you have several days to calculate the historical median.

When you have a Revenue Driver that updates automatically, you will see a calculator icon on the left side of the dates. If you see a hand sign, then you have to update it manually. If you prefer that PMI should calculate via the revenue driver again, you click on the hand sign and the calculator appears. Remember to save.

Tools

You are able to export the data to Excel or PDF for further external reporting purposes.

Recommendations

If you have one year of history in PMI, we recommend you use seasons to calculate Revenue Drivers.

If you use revenue drivers based on history, we recommend you check the Median to see if the Revenue Driver follows the Actual; if there are large differences, you should adjust it.

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