City Demand vs. Cluster Demand –Which Approach Yields Better Insights?

3 min read
Mar 21, 2023 9:07:00 AM

City Demand provides a comprehensive estimate of the market potential for the next 365 days. These estimates are carefully derived from an analysis of numerous forward-looking market data combined with relevant historical data. City Demand is particularly useful for predicting hotel occupancy and developing pricing strategies. This tool is highly robust as it is based on all available properties in the market, ensuring that you receive the most accurate and up-to-date information.

But what if you would like to gain insights into the more granular, local situation? 
Perhaps you're interested in the demand solely for hotels in your district, or for hotels with a particular star classification or rating. Fortunately, HQ revenue offers extensive configuration options, allowing customers to tailor clusters to their unique requirements.

To illustrate, let's consider an example.

The figure shows Berlin's demand and demand for several clusters in March 2023. Of the clusters, Exhibition Berlin and Mercedes Benz Arena are of interest, as they are located far apart, in the western and eastern parts of the city.


On March 1st, demand around Mercedes Benz Arena (84%) is much higher than the average Berlin demand (71%) and demand around Exhibition Berlin (64%). However, on March 7th, demand for Exhibition Berlin (99%) is significantly higher than the Berlin average (93%) and demand around Mercedes Benz Arena (88%). This can be attributed to Chris Brown's long-awaited concert at Mercedes Benz Arena on March 1st and the opening of ITB Berlin 2023, one of the largest travel and tourism trade shows in the world, on March 7th.


GRANT3_cover_MG_MThis is an article from GRANT #3: Revenue Management from A to Z
Download and/or order here


Overlooking the impact of thousands of smaller events 

Although these observations may seem obvious, as every revenue manager plans for such events years in advance, the daily reality is often complicated by the impact of hundreds or thousands of smaller events. 

Therefore, when the demand for a specific cluster exceeds the average demand for the city, it may indicate opportunities for generating additional revenue. However, it's important to note that since cluster demand only assesses a portion of the market, its results tend to be less reliable and more volatile than city demand.

As a rule of thumb, it's recommended to use:

  • City demand as a comprehensive estimate of the market potential when building a pricing strategy;
  • Cluster demand to identify opportunities for generating additional revenue.
When the demand for a specific cluster significantly exceeds the average demand for the city, it may indicate opportunities for generating additional revenue.



What changes are we facing? What new sales channels will the future bring? Which technologies will play a role in the selection of travel and hotel offers in the future? What tools will hoteliers have at our disposal to assert ourselves in the market?

We created GRANT Magazine to find answers to these questions. The English to grant means to grant insights and to fulfill wishes ....

Go to GRANT Magazin



ivan_hq-revenueDr. Data (Ivan Abakumov), physicist and data scientist, is the head of a Data Science team at HQ revenue, where he conducts advanced analytics, and provides consultations on machine learning and digitalization. Ivan's expertise helps HQ revenue achieve significant breakthroughs, including daily forecasting for city demand, real-time occupancy forecasts, and analyzing millions of rates daily.

This article is taken from GRANT#3 – Revenue Management from A to Z

No Comments Yet

Let us know what you think