Dear WuBookers, in addition to present and past performance, those who do Revenue Management also take into account future performance, i.e., projected earnings. How? Through the OTB for hotel, a data that allows you to measure the property’s expected performance and make important assessments on which strategy to adopt.
Let’s take a look together at what it is, what benefits it provides and with what tools to obtain it.

What is OTB and what does it measure

OTB is short for “On-The-Books” and is the index that calculates revenue for rooms already booked for future dates (today/tomorrow forward), before any cancellations.
In other words, OTB shows currently confirmed occupancy and future revenue in terms of the total value of reservations made, and therefore expected, at the time of measurement. It is, therefore, an accurate but constantly changing figure: manually as reservations or cancellations occur, the OTB updates, up to the date of arrival. 

Along with other essential metrics, such as RevPar, the OTB index contributes to the property’s revenue management, i.e., the definition of the most profitable pricing and sales strategy.

3 ways to use OTB in hotels and what’s the point of using it

Along with the data history, surveying future projections is essential to get a handle on the situation, anticipate any changes, and act accordingly without missing important revenue opportunities. 

1. Monitor occupancy rate and reservation pace

One of the most effective ways to use OTB is by surveying and comparing it day by day. By doing so, you will have an up-to-date overview of occupancy, turnover and “Booking Pace”.

Booking Pace is nothing more than the speed of reservations, that is, the frequency with which demand occurs during a certain period.

This allows you to check the hotel’s performance and identify any dates that are not performing adequately. 

2. Identify the correlation between occupancy and rates

Tracking the pace of reservations against rate trends can help you understand how prices affect occupancy, if they do, and vice versa.
Through OTB you can in fact identify any flaws in your offer (your selling price) that may be too high or too low.

Let’s take an example: if the high season for your hotel is summer, revenue at that time of year should be higher than in spring or fall, partly because of increased demand.

But if, at the beginning of the season, you have already sold all available rooms without a noticeable increase in revenue, something is wrong. Of course, a lot depends on the goal, which may be more oriented toward economic growth or on occupancy.

3. Obtain an overview of property performance

The OTB index allows you to read the property’s performance in the future and interpret it, both as such and in relation to the past.
If you have set a certain goal (e.g., a certain percentage of occupancy), you can constantly monitor the situation and work towards it.
Or, you can compare occupancy and projected turnover against a specific date or the same period in the previous year and evaluate it. 

The comparison over time is very useful. However, before intervening with possible corrective actions to your business strategy, you need to consider all the factors that come into play, such as extraordinary events, weather conditions, public initiatives, and so on.

Measuring OTB through the use of a PMS

Measuring OTB manually is likely to take a lot of time and still result in an inaccurate and unreliable value (human error is always around the corner!). Much better to rely on technology, especially if it already has all the necessary data and is prepared for querying according to customizable search filters.
From this point of view, the hotel PMS is one of the most suitable tools.

OTB on Zak, the PMS by WuBook

Although not a revenue management software, Zak (WuBook’s accommodation management software) records property data and returns them in the Statistics section, organizing them according to the most important KPIs updated in real time: available rooms, rooms sold, rooms closed, total revenue, room revenue, percentage of occupancy, RevPAR (revenue per available room), TrevPAR (total revenue per available room), TrevPOR (total revenue per occupied room), % occupancy, RevPOB (revenue per occupied bed), RevPAB (revenue per available bed), ADR. And, of course, OTB, although not with this nomenclature. 

In fact, to streamline consultation of this metric, OTB on Zak is broken down into total revenue-derived from bookings received to date for stays from tomorrow onward-and bed occupancy (occupancy). Depending on the value you wish to view, you can filter the results by month/year/quarter or by selecting individual dates. In addition, thanks to the “Compare with other dates” function, forecast data up to 1 year later can be compared with data from 1/3/6 months earlier or up to 5 years back.
Histogram or pie charts make for immediate reading, but for more detailed analysis everything can be exported to convenient tabular (csv) files.

Comparing dates also makes it possible to calculate Booking Pace, which is the difference in the amount of bookings received for the selected period.
However, Zak also provides another interesting index for those involved in rate optimization: the “BookingWindow,” or the time from reservation to check-in. Knowing how far in advance, on average, people purchase lodging can in fact help define a consistent plan of action and management.
Finally, note that even more precise data can be derived from Zak’s statistics, such as revenue specifically and divided by OTA channel, and the unbundling of the cost of meals per board or per “fly meal” (additional meals).

As we have seen, OTB is an important indicator for checking future performance and acting in time if something is not working properly. Once again, the PMS proves to be an indispensable tool for those who want to manage a property professionally and effectively.