Cornell Study Demonstrates Improvements in Hotel Food and Beverage Forecasting

Occupancy Data Can Substantially Improve Predictions of Hotel F&B Trends

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. October 14, 2008

ITHACA, NY, September 25, 2008. A detailed test of hotel food and beverage forecasting has found that most F&B forecasts are improved by the inclusion of room occupancy data. The study, "Forecasting Covers in Hotel Food and Beverage Outlets", by Gary M. Thompson and Erica D. Killam, is available at no charge from Cornell's Center for Hospitality Research. Thompson is a professor of hospitality operations at the Cornell School of Hotel Administration, and Killam is a graduate of that school.

Thompson and Killam tested 27 different forecasting methods, each with slightly different mathematical rules. Six methods were based on an F&B outlet's historical data, but those fell short compared to the 21 formulas that used some form of occupancy data. On average, hotel forecasting accuracy improved by 11 percent using room data, compared to using only historical data.

Hotel Food and Beverage Trend Study Identifies Key Ingredients to Controlling Costs and Improving Revenue

"This initial test used data from just four hotels, but that included 33 diverse food outlets," said Thompson. "It seems clear that it's worth pursuing forecasts that include room occupancy, especially given the importance of forecasting to effective F&B management."

In discussing the new study the new study of hotel food and beverage forecasting, Killam added: "In seven of our tests, we saw improvement of 25 percent by including occupancy data. We're hoping that hotel operators will be willing to share their data with us so that we can extend this test. Better forecasts are a way to control costs and improve revenues." Killam is now working in operations for Aman Resorts.

Thanks to the support of the Center for Hospitality Research partners listed below, all Cornell Hospitality Reports and Tools are made available free of charge from the center's website, www.chr.cornell.edu.

About The Center for Hospitality Research

A unit of the Cornell School of Hotel Administration, The Center for Hospitality Research (CHR) sponsors research designed to improve practices in the hospitality industry. Under the lead of the center's 73 corporate affiliates, experienced scholars work closely with business executives to discover new insights into strategic, managerial and operating practices. The center also publishes the award-winning hospitality journal, the Cornell Hospitality Quarterly (formerly the Cornell Hotel and Restaurant Administration Quarterly). To learn more about center and its projects, visit www.chr.cornell.edu.

Center partners and sponsors: AIG Global Real Estate Investment, American Airlines Admirals Club, Davis & Gilbert LLP, Deloitte & Touche USA LLP, Denihan Hospitality Group, Expedia, Inc., Four Seasons Hotels and Resorts, Fox Rothschild LLP, FX Real Estate and Entertainment, Inc., General Growth Properties, Inc., HVS, InterContinental Hotels Group, job.travel, JohnsonDiversey, Inc., Jumeirah Group, LRP Publications, Marriott International, Inc., Marsh's Hospitality Practice, Mobil Travel Guide, Inc., Nestl'e, PricewaterhouseCoopers, Proskauer Rose LLP, Smith Travel Research, Southern Wine and Spirits of America, Inc., SynXis (a Sabre Holdings Corporation), Taj Hotels Resorts and Palaces, Thayer Lodging Group, TIG Global, Travelport, WATG, and WhiteSand Consulting.

Center friends: 4Hoteliers.com o American Tescor, LLC o Argyle Executive Forum o Caribbean Hotel and Restaurant Buyers Guide o Cody Kramer Imports o Cruise Industry News o DK Shifflet & Associates o ehotelier.com o EyeforTravel o Fireman's Fund Insurance Company o Gerencia de Hoteles & Restaurantes o Global Hospitality Resources o Hospitality Financial and Technology Professionals (HFTP) o hospitalityInside.com o hospitalitynet.org o Hospitality Technology Magazine o Hotel Asia Pacific o Hotel China o HotelExecutive.com o Hotel Interactive o Hotel Resource o International CHRIE o International Hotel and Restaurant Association o International Hotel Conference o International Society of Hospitality Consultants (ISHC) o iPerceptions o Lodging Hospitality o Lodging Magazine o Milestone Internet Marketing o MindFolio o Parasol o PKF Hospitality Research o The Resort Trades o RealShare Hotel Investment & Finance Summit o Resort+Recreation Magazine o RestaurantEdge.com o Shibata Publishing Co. o Synovate o The Lodging Conference o TravelCLICK o UniFocus o WageWatch, Inc. o WIWIH.COM

Contact:

Glenn Withiam,

607.255.3025,

[email protected]