Prepping for Budget Season

Yes, it has come around again….along with the darker Autumn evenings, the return of Strictly Come Dancing, and the influx of Pumpkin spiced lattes, budget season is with us once more. There is something quite comforting and familiar about the “normality” of prepping for budget, while still acknowledging the absolute uncertainty around 2022 performance.

So where to start, when prepping for budget season 2021? What data to consider, and what to ignore. Which elements of your property’s past performance are relevant to next year’s forecast and how can you utilise market data and predictions to your advantage.


Here are some things to consider for this budget season:
  • Firstly be honest with your stakeholders. There is still a great amount of uncertainty in the travel market – typical booking patterns, segment behaviour, and demand drivers have changed. Whether your property relies heavily on corporate travel, weddings, or the International leisure guest we are becoming all too familiar with moving goalposts that are outside our control. So be honest – all we can do is forecast based on the information we have right now and utilise more forward-looking data, rather than considering recent past performance.
  • If you do feel the need to compare (and what revenue manager doesn’t!) comparisons to 2019 are most likely more relevant. While some markets and properties did see an uplift during the summer months this year in both occupancy and ADR vs 2019, this was largely based on the pent-up demand in the domestic market – something we are unlikely to see next year.
  • While it may be commercially necessary to produce a budget for the full year, I would recommend having a discussion (if you haven’t already) around the ever-growing importance of a 3-month rolling forecast. This will allow you and the team to put in place more realistic targets, utilise more relevant data and ensure your stakeholders are fully aware of any significant movements in your revenues as the year unfolds.
  • Consider data from outside sources. Companies like STR and Tourism Economics are gathering worldwide data and sharing forecast models up until 2024. While some of these are on a macro level, the data is broken down by market (Europe, Asia Pacific, US) and gives good insight into what markets should expect for the next 2-3 years. Use it to sense check your own forecasts and assumptions – I always found that including this data in your budget presentations provides a larger context for your own findings.
  • Use your network. Conversations with Tour Operators, OTA account managers, Sales Managers, and event/concert organisers will yield some invaluable insight into the likely return of certain markets. And while they are also at the mercy of elements outside their control, your knowledge of any movements, positive or negative will ensure your forecasts are grounded in true data from numerous sources.
  • Finally, take a big deep breath. We are continuing to deal with a global pandemic. Human behaviour has changed drastically, companies and society at large have had to question what is truly important. We have had a tremendously tough few years, some of us have experienced extremely challenging situations and while we do want to return to a level of “normality”, this is going to be different for everyone. So for the budget season, I would say, try and embrace the uncertainty, become comfortable with looking ahead and not behind, and remember in the wise words of Yogi Berra “It’s tough to make predictions….especially about the future”.

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