Gaining pricing power from analysing demand

Hoteliers have a lot to win if they study how demand is influencing rates

The optimum way to adjust daily rates is based on demand. But timing this effectively and thinking ahead of the curve is a fine art. One research company has developed a set of econometric models that analyse the variables influencing demand.
One of the key economic indicators that influences demand for hotel rooms is employment. Research shows that, in past economic cycles, employment and hotel demand move in synchronisation.
However, when the economy is pulling out of recession – as is the case now – hotel demand presages growth in employment.
We are now seeing a surge in demand, as the large discounts made during 2009 have pushed forward the growth in demand for 2010 and 2011. To take the research ahead to forecast to coming three or four years, it is probable that current positive economic prognoses will “translate into sustained hotel demand growth through 2014.”
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[pictured: Hotel Riverton, Gothenburg, World Hotels]