Hotel demand forecasting: how you can optimize revenue with predictive market intelligence

Traditionally, the holiday season has been a boom time for the hospitality industry.

Prior to the pandemic, forecasting hotel demand relied heavily on historical data, with certain seasons like Christmas and New Year having typically recurrent booking patterns.This holiday season, there is much more to consider.

2022: A mixed year for hoteliers

In many markets, the optimism we’ve seen returning to the hospitality industry in 2022 is mixed with caution. Two years of restricted travel left many people desperate to travel, and we saw a travel boom in the regions that lifted inbound and outbound restrictions. Domestic travel also picked up.Demand returned to pre-pandemic levels, and prices in many destinations surpassed 2019 levels. However, business travel was slow to return, and many destinations had to wait for international markets to open up again.Looking ahead to 2023, headwinds remain for the hotel sector. In Europe, rising domestic energy prices and high inflation are eating into disposable incomes. In the UK, the pound has weakened, meaning that the spending power of one of the primary drivers of international travel for many global destinations has fallen.However, a strengthening USD offsets this as rising destination costs may have less influence on US-based travelers. And, with many Asian markets yet to return to full capacity, destinations and accommodation providers dependent on these markets still face some uncertainty.For hoteliers trying to navigate these dilemmas and predict future demand without the security of previous years’ forecasting models to rely on, they risk reactionary tactics that lead to their occupancy rates falling in an already challenging landscape.

Hotel revenue management made easy with forward-looking data

However, forward-looking search data - which merges several key pre-booking metrics to help hoteliers understand booking intent much earlier in the booking journey - extends the window of opportunity for hoteliers to put in place the right pricing and marketing strategies to capture demand.Predictive market intelligence solutions, such as Market Insight, source and aggregate this data for you, optimizing your demand forecasting and highlighting new revenue opportunities in your market before your competition is even aware of them. It helps to identify those outlier periods where the market is behaving differently from what would typically be expected by aggregating many of the indicators of demand, up to a year before the arrival date. It means that hoteliers can track dates that are showing signs of high, low and normal demand well in advance and receive alerts when there is a shift in demand in their market.The better you understand your market and your guests, the better you can plan for periods of both high, normal, and low demand. With this level of forecasting accuracy, you can then implement the strategies that ensure you are positioning your property effectively, leaving nothing to chance and maximizing your hotel’s revenue potential.

Hotel revenue strategy for high-demand dates

By spotting demand levels ahead of time, hoteliers can apply demand-generating actions, such as a new pricing strategy, that can boost both their market position and RevPar.Days around recurring events that generate high interest, can be forecast in advance so that you can establish how your pick-up may be trending - if it is in line with the rest of your market, and when you can expect it to peak.Special events that may have driven demand in previous years might be behaving differently this year. Importantly, you can leverage what the data is telling you about your own demand, pickup and occupancy to act early, decisively and confidently. Here are some actions you can implement at your hotel to optimize your revenue performance when demand is higher than normal.


  • When travelers are looking, make sure your individual pricing is right 

  • Make sure your group pricing reflects the demand trends identified in Market Insight


  • Put in place the right LOS restrictions using Market Insight

  • Check your LOS promotions and see what travelers are searching for so that you can implement an LOS for which there is actual demand

  • Restrict low rates - e.g. FIT rates, corporate, friends and family

  • Restrict promotions - e.g. Mobile, point of sale, channel-specific discounts

  • Restrict low-priced room categories to drive increased revenue in higher-priced room categories

  • Ensure your website is on parity or offer special deals to drive more direct booking

Dubai, Valentine’s Day 2022. Very high demand. Final market occupancy: 97%

Dubai Valentine’s Day 2022 Very high demand

In the graph above we can see that in the buildup to Valentine’s Day in 2022, Dubai began to see elevated demand a year in advance.

The graph shows how far in advance demand evolved there before any pick up in bookings. 287 days prior to the date of travel, Market Insight adjusted its prediction to very high demand, but it was only 146 days before travel that the market occupancy began to pick up.

Having the right strategy in place early on in the booking phase shows just how long hoteliers have to ensure they are optimized to realize high occupancy, at the best possible price

Hotel revenue management strategy for low and normal demand dates

Spotting low demand days far in advance is equally as important. It will support you in capturing demand before any of your competitors. While hoteliers can’t create demand, they can align their property position with the demand in their market according to what potential visitors are looking for, with effective demand forecasting.Capturing market share during periods of low demand requires forward-looking data and a proactive range of tactics to drive bookings and ensure you have your share of the market.With predictive market intelligence tools, such as Market Insight, hoteliers can identify feeder markets that drive high volumes of searches, and thus become much more targeted in their promotional, marketing and sales strategies. Here’s what you can do:



  • When travelers are looking, make sure your individual pricing is right

  • Make sure your group pricing reflects the demand trends identified in Market Insight


  • Know who is looking, and target those feeder markets that are driving higher search volumes with market-specific offers on OTAs, Metasearch sites, GDS and/or

  • Target length of stays that drive high volume of searches with LOS offers on OTAs, Metasearch sites, GDS and/or

  • Open Mobile rate offers. Tip: On OTAs, you can target specific markets through member dealsBecome part of the OTAs' member programs and increase your visibility

  • Overbook low room categories and ensure your low rates are available to book (corporate, FIT rates, friends, family, etc.)

  • Ensure your website is on parity or offer special deals to drive higher direct bookings


  • Boost your visibility on OTAs, Meta, GDS, and search engines in these markets via commission increase or with ads

  • Optimize your advertising spend down to city level

  • Reduce costs associated with campaigns in geographical areas of low source demand, eliminating some of the trial-and-error in the process


  • Develop new partnerships with travel agencies, OTAs and wholesalers located in countries with a high volume of searches

Sydney, 1st July 2022. Elevated demand. Final market occupancy: 61%

Sydney 1st July 2022 Elevated demand

In Sydney, demand indicators showed that even though there was a slow buildup, it provided hoteliers with a window of 136 days to implement a strategy to drive bookings and capture demand. The final market occupancy was 61% for that particular date.


At the heart of having an effective revenue management strategy is the data that feeds it.Knowing who is looking, for which dates, and for how long, up to 365 days in advance, means that you have a longer period to monitor future dates and ensure that you are well positioned to maximize your revenue with the right offer, exactly when guests are looking to book.

Download our latest white paper, which showcases the effectiveness of forward-looking search data when predicting hotel demand. Discover how you can harness forward-looking search data with Market Insight to get a competitive advantage and stay nimble in this ever-changing hotel landscape.

Read more about using market intelligence to uncover new revenue opportunities