The ultimate guide to on-the-books data for hoteliers
OTB is one of the most commonly used acronyms in hotel revenue management, and it stands for on-the-books.
It refers to the amount of room revenue that is already booked and confirmed for future dates.
OTB is one of the most commonly used acronyms in hotel revenue management, and it stands for on-the-books. It refers to the amount of room revenue that is already booked and confirmed for future dates.
Prior to the pandemic, OTB was crucial for hotel commercial teams. Historical data and OTB helped with everything from forecasting, pricing and group quotes to decision making and strategising.
During the pandemic both historical data and OTB data lost some of their predictive power, and it became harder to forecast trends due to ever changing travel restrictions and the resulting demand shifts.
In order to adapt to shifting conditions and quickly respond to market conditions, commercial teams turned to top-of-funnel, forward-looking data. Forward-looking data started gaining importance because indicators such as travel intent, search pressure, flight data reveal emerging market demand.
However it was hard to know what was converting into bookings and for when, this is where OTB forward looking data comes into play.
Hoteliers leveraging OTB forward-looking data to form revenue strategies have a leg up on their competition and are able to benefit from uncharacteristic booking changes.
In the ever-evolving hospitality landscape, forward-looking market insights remain highly beneficial, but OTB data is also regaining importance.
As competition for bookings heats up, using both your own and market OTB data can be a smart move. It will help you to fine-tune your commercial strategy and stay ahead of the market.
Read on to discover how you can begin using all forms of OTB data to your advantage.
What is OTB data?
Hoteliers use OTB when looking ahead to see how many rooms are booked at which rates for a given day.
In short, it shows the current confirmed occupancy and revenue for the future in terms of the total value of room reservations that have been made and are expected to be realized.
In most PMS’, you can choose to view it in a table or graph view by day, week or month.
Bookings and revenue OTB will change as reservations and cancellations occur, until the arrival date or period. This means that OTB data offers a precise yet ever-changing snapshot of your business.
There are pricing recommendation tools like Pricing Assistant that can easily display OTB data from your PMS directly in app, as well as your OTB forecast (how much occupancy we believe your hotel will close for a specific stay date), and your market OTB.
This allows you to view and analyze it directly beside external data and seamlessly assist your forecasting and revenue management process.
The role of OTB data in revenue management
Your OTB reservations show you the current occupancy for any date in the future.
OTB reservation data allows you to examine your business, identify need dates and find opportunities to drive more bookings.
Here are three simple ways to use OTB data to analyze your performance:
Monitor occupancy and understand booking pace
The most straightforward way to do this is to compare your OTB business day by day. This shows you how many new bookings have come in and if there have been cancellations. Track this pick-up momentum along with rate and demand insights to see if you’re getting sufficient reservations and identify underperforming dates.
Recognise the relationship between rates and occupancy
Plot your booking pace against your property’s rate evolution to analyze the correlation between occupancy trends and prices. How are they impacting each other? Where can you see opportunities to drive bookings, increase rates or even do both? There’s no single correct approach here.
Your decisions ultimately will depend on your overall strategy and whether you’re pushing for occupancy or high rates.
Visualize how your booking pace and OTB business compares to similar seasons, events or the same time last year.
Key questions for your commercial team to consider include: Are you doing better, worse or the same? Can you see why? Travel restrictions, postponed or canceled events or changes in your compset can impact your performance, so be sure to look out for them.
As you see, using OTB data is a powerful tool for performance analysis and well-informed pricing and distribution choices.
However, gathering and collating all this data manually can be time consuming. More and more, hoteliers are tasked with doing more with less.
Historic vs forward-looking OTB data
As the name implies, historical OTB data looks back. Historical OTB shows performance for a specific date, event or period in the past. Forward-looking OTB or OTB forecast data highlights your OTB business for a future date - revealing how it’s developing or likely to develop, given market demand and your compset.
In the past, both historic and forward-looking OTB were used. However, historic OTB data had more weight since it was reliable, and hotel tech had limited capabilities for leveraging forward-looking information.
Now, innovative tech solutions have developed to offer deeper insights into upcoming demand and booking intent. OTB forecast in Pricing Assistant incorporates a machine learning model using multiple factors, such as your historical performance data and current booking trends to calculate occupancy on a specific stay date.
These future-facing insights now play a significant role in understanding emerging demand and forecasting how business will develop at your hotel.
Taking OTB analysis a step further with market OTB data
To see your hotel’s performance as part of the bigger picture, the key is to also examine market OTB data.What is market OTB data?
When analyzing market OTB data, you look at the same points as we’ve outlined above, but for the market as a whole. This shows you how your market is performing at the city-level and how city-level OTB business compares to your own.
How you can benefit from analyzing market OTB data
Market OTB data analysis consists of three important steps:
Tracking daily pick-up momentum for both your hotel and your market reveals who sees bookings come in fastest.
Checking the correlation between compset occupancy trends and rate levels in the market shows who is getting bookings at the best rates. For this, plot your booking pace against your property’s rate evolution and do the same for your compset.
Examine the reasons behind your results to discover where tactical tweaks are needed.
This analysis provides an in-depth view of confirmed business in the market and your relative performance.
It gives you a better chance to identify and leverage new opportunities to optimize your strategies and drive business. You simply cannot get these insights from purely analysing your own data.
OTB forward looking benchmark
Running a hotel is challenging, and the competition for guests has never been fiercer.
Having the ability to accurately track and your own OTB performance and then benchmark versus the market is now invaluable.
This capability could be the difference in making your business perform above the market competition.
OTB forward looking benchmark utilizes market OTB and forward looking demand data to show how demand on the market is converting into OTB business for your property, so you can analyze your performance at the city level. This allows you to:
Spot early signs of demand in your market. The earlier you see it, the more of this business you can win by implementing the right strategies to capture it.
See how upper funnel demand converts into actual business for your hotel vs your market.
Is there room for improvement at your hotel? Do you need to run a promotion to attract guests on a high demand day where your OTB is lower than the market benchmark?
Without the right software OTB benchmarking is almost impossible to get right. The good news is, thanks to predictive intelligence solutions like Market Insight, it’s possible to simplify and accelerate the process.
Having live OTB benchmarking insights at your fingertips, alongside rates and demand trends will help you form a smart, effective and data-driven commercial strategy.
Despite the many changes our industry has undergone over the past few years, one aspect remains the same - OTB data still plays a vital role for hotel commercial teams.
Given advances in tech, forward-looking and market OTB data have become more accessible than ever. Now, you can detect emerging booking patterns and look beyond your own hotel’s results more easily.
This offers you a better understanding of how well demand converts at your property and who is capturing how much business across your entire market, so you and your team can benchmark performance.
If you want to perform above the competition begin leveraging OTB insights to inform your strategies and pricing decisions.