Tuesday Tactics: Re-Opening Scenarios- Revenue Forecasting
As the public health sector responds to the COVID-19 crisis, public park agencies are called to respond. The purpose of the Tuesday Blog is simple: to provide you with strategies that assist you, your agency and your partners with a mutually beneficial way forward.
Photos:
@rossnedon, @nextvoyage_pl
Revenue Forecasting for Public Agencies
Our past blogs have spoken about the three data elements you need to create your visitor demand forecast. Today’s blog will focus on how to use that data to develop various scenarios for revenue forecasting.
The COVID-19 Pandemic is different from every other economic slowdown because the strategies to contain the spread of the infection vary by state and county and the timing and impacts of reopening remain unknown. This significant uncertainty requires revenue forecasting that is dynamic and can evaluate various options across a portfolio of locations and assets. A simple, static “open or close” or “no money or some money” model does not provide leadership the necessary insight for fiscal and staffing decision making.
Revenue forecasting is defined as estimating revenues over a fixed period. There are three core components of revenue forecasting:
1. Establish the Scenarios: Agencies should develop at least four options of operation and consider time horizons to cover the next two years.
Baseline: Historical operations and revenue profile
Scenario 2: Operating Season Reduction for Day Use
Scenario 3: Operating Capacity Reduction by Recreation Asset for Day Use and Overnight
Scenario 4: Shift in Operating Seasons for Day Use and Overnight
2. Identify the Variables: Variables are data elements needed to develop your scenarios.
Visitation by Park by type of visitor (e.g., day use vs. overnight)
Visitation by Asset Type (e.g., camping, boat launch, lodging, picnic shelter, cabins, etc.)
Inventory by Asset Type (e.g., RV, tent, cabin, large picnic areas, small picnic areas, etc. )
Zip Code: (e.g., profile of visitation by origin)
Average length of stay (e.g., how long are people staying)
Public health (e.g., cleaning) and public safety (e.g., law enforcement) staffing
Public health costs (e.g., supplies, equipment)
Pricing by asset type and by season
3. Develop the Model: Revenue and Expense estimates.
Each scenario requires the development of revenue and expenses estimates. The CHMGS team develops “baseline” status quo models and then adds or subtracts revenue and expenses for each scenario. A dashboard is created that allows for choosing various scenarios and seeing the financial impact of each.
For the last two decades, CHMGS has supported our clients’ decision making by developing interactive revenue forecasting dashboards. This experience has provided us insight into the important requirements of developing accurate and informative revenue forecasts. We would welcome a chance to discuss with you how you are undertaking your revenue forecasting during this period.
