Meetings Industry Forecasts: How Much Should We Rely on Predictions?

I'm a fan of statistics and studies, something you've probably picked up on from the regular stream of posts I write on industry reports from groups like Smith Travel Research and PKF Hospitality. I certainly don't have the qualifications needed to predict the current and future state of the market, so I rely on the experts to do it for me. Yet sometimes I wonder, what makes me so certain they'll get it right?

My colleague Sherrie at the Cvent Surveys blog recently wrote a post about all the cable news polls you see on television, and how they might not be as legitimate as viewers are led to believe. I also recently read an article in The Wall Street Journal about industry forecasts, just like the ones I blog about, and how they are no longer so reliable during the recession.

"Numbers Guy" Carl Bialik points out, for example, that a leading hotel industry forecast predicted that hotel occupancy in the fourth quarter of 2008 would remain steady at 57.8 percent, about the same as in 2007. In reality, occupancy fell by 8 percent.

Different methods of measurement, errors in past forecasts and unforeseen circumstances (like the recession) contribute to inaccuracy—that's understandable. But I thought one explanation for errors was a bit unsettling. Bialik writes, "The true goals of some predictions, says Kesten Green, a forecasting researcher at Monash University in Melbourne, Australia, include lighting a fire under the sales force or alarming the public into some sort of action." So as with any forecast, as Sherrie pointed out, it's important to keep in mind not just who is being surveyed but also who is doing the surveying, and what purpose they may have.

In the end, then, where does that leave us meeting professionals trying to get a grips on upcoming trends? Will hotel occupancy remain low in the coming years? Is demand going to increase next year? Who should we believe?

I know that these groups put a lot of effort and time into developing these predictions, and in no way do I want to discredit that. I guess the point is that you have to take such forecasts with a grain of salt. It's more that we can't ring the doomsday alarm every time we see some bad news, and shouldn't really bank on them when it comes to making big decisions. What do you think?
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