In hospitality, possibly more than in any other sector, you have to be prepared for anything! From unexpected bad weather to a local event diverting foot traffic away from your doors – there are a lot of variables that can have an effect on your revenue.
So, where do you start when it comes to sales forecasting with so many variables at play? As well as changeable and one-off variables you also have to factor in seasonal trends, and this is harder than usual due to the effect of the pandemic. Due to enforced closures during lockdowns, you now no longer have the same year on year comparison data to help you forecast for seasonal trends. Similarly, if you are a new hospitality business then you will not yet have the historical data to consider when planning a sales forecast.
In this article, we’ll look at sales forecasting for hospitality and some of the crucial things you should consider when planning your forecast, as well as our top dos and don’ts!
Why is forecasting important in the hospitality industry?
Forecasting helps give businesses a better understanding of how they can expect to perform. Using seasonal trends, historical data, local event knowledge and other insights, business operators can make more accurate predictions of performance. More accurate forecasting leads to more accurate budgets, more accurate staff scheduling, more accurate ordering and more profits!
Hospitality businesses that are more successful in their forecasting are also better prepared to manage unexpected changes and adapt their strategy if necessary.
And in case you’re still wondering why sales forecasting is so important for hospitality businesses, check out how you could optimise your operation:
Maximise sales at peak times
Accurate forecasting will help you more effectively schedule your staff, ensuring you’re never understaffed at a crucial point in time. Having the right amount of people working your peak shifts means you will always deliver a quality service experience and enable steps of service such as offering more drinks or desserts that will in turn increase spend per head.
Save on costs in quiet times
Being more effective in forecasting will also help you more accurately predict and plan for your quiet times and avoid over staffing. Overstaffing will lead to more cancelled shifts and sending people home early which will frustrate your teams and lead to lower staff engagement.
Managing stock levels
Accurate sales forecasting enables businesses to plan orders more effectively, what quantity of products needs to be ordered, what’s already in stock. And more accurate ordering leads to less wastage and more savings.
Be prepared
So, you’ve got all your data, you know the benefits, now it’s time to sit down with the calendar and start thinking about all the seasonal trends, local events and other variables that may impact your sales forecast.
We’ve compiled a helpful list of things you may want to consider:
- Local events – What local events are on that might drive footfall away from or towards your venue? Any big shows? Concerts? Marathons? Any planned road closures?
- Bookings – Look ahead over the next few weeks, are bookings up or down? Is there a reason why? You can utilise your own customer trends to help inform your sales forecast.
- Absence of events – It’s not just what’s on but what’s not! If you’re using your historical sales data to help forecast then consider the absence of events that occurred last year.
- Competitor analysis – Check out the state of your local competitors regularly. Any new openings? Any closures? What promotions and discounts are your competitors offering?
- Weather forecast – Check out the local weather forecast and don’t forget to check again when anticipating a high sales prediction day – many venues are heavily impacted by the weather and a rainy Saturday is going to look a lot different to a sunny one.
Now let’s look at our top do’s and don’ts of sales forecasting for hospitality.
DO Review sales forecast daily to monitor the week
Make sure you continuously check how your actual sales are measuring against your forecast and look at the emerging trends across the week. Has unexpected bad weather made your week a little slow? How’s the weekend looking? And don’t be afraid to adjust accordingly ahead of your busier days – after all a slow week might affect what stock you’re holding heading into the weekend.
DO Have an events calendar for the local areas
Your local events calendar is extremely important when it comes to accurate forecasting. Theatre and cinema listings, sports events, local fairs and festivals can all impact your sales.
DON’T Forecast for the whole month and leave it
Accurate forecasting in hospitality means being flexible and adaptable. You can’t forecast the entire month and then leave it. Invest your time into regularly checking and updating your forecast and the more accurate you’ll become at being able to see the effects on staff scheduling and ordering.
DON’T Ignore what your competitors are doing
Your local competition can greatly affect your sales, you should ensure you are continuously aware of your local competitors and their offering, in particular any promotions or discounts they are running – particularly if they are targeting the same customers as you, for example, if you are both family restaurants and your competitor launches a new kids eat free offer.
Sales forecasting doesn’t have to be intimidating, and we are on hand to help – why not watch our masterclass in forecasting and scheduling for more insights and tips into more accurate sales forecasting for hospitality.
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