Pearson New International Edition International pcl tp indd 1

Extended Forecasts
FOMs often project room demand far into the future. For example, an FOM may be
asked to predict room demand for a 30-day period that is six months in the future—
a prediction in May about the room demand the following November. To compre-
hend the difficulty of this task, consider the value of the three sources of data that
FOMs rely on to make their demand forecasts:
•
Historical data. Historical data do not change as they age. In other words, data
from one year ago remain constant six months ago, today, and six months from
now. An FOM who wants to forecast November demand in May would find it
easy to use last November’s historical data to help with the task. However: his-
torical data do age. If an extended forecast is for a period more than a year in
advance (e.g., an 18-month projection in May of this year for room demand for
November of next year), historical data may be two years old when the fore-
casted time period actually arrives. In this case, historical data are likely to be
of less value than more recent historical data.