Forecasting Hotel Room Bookings

Requirements Clarification & Assessment

1. Understanding the Business Objective:

   • The primary goal is to forecast hotel occupancy rates accurately to optimize pricing strategies, manage inventory effectively, and improve customer satisfaction.
   • Determine the granularity of the forecast: daily, weekly, monthly, or hourly.
   • Clarify if the model needs to function in real-time or if batch processing suffices.
   • Identify the geographical scope: is it for a single hotel, a chain of hotels, or a specific region?

2. Clarifying Definitions:

   • Define occupancy rate clearly: is it based on the number of rooms occupied or the number of guests?
   • Understand the impact of incorrect predictions: overestimating can lead to lost revenue, while underestimating can result in customer dissatisfaction.

3. Data Availability and Sources:

   • Assess the availability of historical booking data, including cancellations and no-shows.
   • Identify external data sources such as local events, weather conditions, and economic indicators.
   • Evaluate the data quality and completeness, especially for new hotels.

4. Benchmarking and Historical Data:

   • Determine if there are existing models or benchmarks for comparison.
   • Understand the historical trends and seasonality in occupancy rates.

5. Feature Identification:

   • Identify relevant features: hotel location, room types, pricing, promotions, local events, holidays, and weather conditions.
   • Consider external factors like economic indicators or public health issues (e.g., COVID-19).