In most large-scale service industry properties, tremendous effort is devoted to anticipating guest or customer volume, as well meeting their needs. Managers accomplish this by providing and using available resources. In most cases, the key piece of information is volume. The purpose of a forecast is to develop volume projections and then determine the level of demand the anticipated volume creates.
There are two types of forecasts: short-term and long-term. LMS is most effective when producing short-term forecasts which means that forecasts look primarily one to two weeks into the future. The information gained from short-term forecasting can then be used in assisting the property to develop more accurate long-term forecasts (typically those a month to a year out).
Forecasts are based on the KBIs (Key Business Indicators) that have been established for the property and how they are set up in the system. Typically, the majority of KBIs in LMS fall under two major classifications: revenue centers or market segments. Revenue centers are created to configure KBI forecasting methodologies and to be able to edit those forecasts. Market segments are designed to go with Rooms forecasting. There are also some special forecasting circumstances.
LMS is designed to be flexible while accommodating a wide-range of operational and service environments. LMS can be custom configured in great detail while taking into account your targeted market segments, revenue centers, room count, etc. LMS can also be updated with accurate data as circumstances change.
The key to creating an accurate forecast is to obtain necessary data on a regular and timely basis for input into LMS. To gain the maximum benefit from the software and to ensure that it stays current, booked room counts must be entered prior to generating a room forecast, and actual volume counts must be entered each day. Since there is a natural tendency to accept numbers on paper as valid, it is extremely important that all numbers are carefully recorded and verified. When used properly, LMS is an effective and valuable management tool that lets management automatically produce accurate forecasts without maintaining myriad paper records.