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Faculty & Research

Hospitality Leadership Through Learning
Faculty & Research

Forecasting Covers in Hotel Food and Beverage Outlets

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Vol 8 No 16
By:  Gary M. Thompson Ph.D. and Erica D. Killam

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Executive Summary: In this report we explain our finding that a lodging property can generally use information on its occupancy to improve the accuracy of cover forecasts in its food and beverage outlets. We examine twenty-seven forecasting methods. Six of the methods forecast covers using only an outlet’s historical data, while the others include information on the property’s occupancy. We conducted our study using four hotels that have a total of thirty-three combinations of food and beverage outlets and dayparts. The food and beverage outlets include room service, lounges, cafés, and main restaurants. Since we have extensive historical data from one of the properties, we split that into two samples, giving a total of forty-one outlet-daypart scenarios. In all of the cases we used an eight-week holdback data set to test the models. In thirty-four of the forty-one outlet–daypart scenarios, the best forecast originated with one or another of the models incorporating occupancy data. On average, forecast accuracy improved by over 11 percent when using occupancy data. In those thirty-four cases where using occupancy data improved the forecasts, the average improvement in accuracy was over 14 percent, while the accuracy improvement exceeded 25 percent in seven of the scenarios.

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Comments

This is a fantastic article! 

With respect to the findings on the usefulness of the previous day's occupancy in predicting lunch counts (Exhibit 7), many guests at trade shows, meetings, conventions, etc. and tourists with late flights need to checkout before noon.  They leave their luggage with the concierge and attend meetings, exhibits, local tourist attractions, etc. and leave for their final destination later in the day.  They are still in the hotel area for the lunch period.  They may have limited options depending on the location.

Joe Dunbar
President
Dunbar Associates

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About Gary M. Thompson Ph.D.

Gary M. Thompson is a professor of operations management in the School of Hotel Administration, where he teaches graduate and undergraduate courses in operations management. Previously he spent eight years on the faculty of the David Eccles School of Business at the University of Utah. He holds a BS with first class honors from the University of New Brunswick, an MBA from the University of Western Ontario, and a PhD in operations management from The Florida State University. His current research focuses on optimizing restaurant table mixes, on optimizing conference schedules to improve attendee satisfaction, on course scheduling in post-secondary and corporate training environments, and on the effects on customer service of labor staffing and scheduling decisions. His research has appeared in the Cornell Hospitality Quarterly, Decision Sciences, the Journal of Operations Management, Management Science, Naval Research Logistics, Operations Research and other journals. He has consulted for several prominent hospitality companies and is the founder and president of Thoughtimus, Inc., a small software development firm focusing on scheduling products.

For more information visit http://www.hotelschool.cornell.edu/research/facultybios/faculty.html?id=84