The annual hotel RFP process is a pain point for nearly everyone. BTE Think Tank buyers offer some solutions
By Travel Buyers Think Tank
Mark Ziegler Senior Travel Manager, NetApp, Inc. “For my program at NetApp, my goal is to negotiate advantageous rates at hotels in cities where our employees travel, ensuring those rates are the lowest available at any participating hotel. Sounds simple, doesn’t it?
“Not any more, thanks to yield management and hotels undercutting negotiated rates. After we spend untold hours negotiating, my travelers are constantly telling me they can call a hotel and get a better rate. Frustrating and infuriating!
“Now hotels are approaching me more than ever about dynamic pricing, chain discounts and even off-season RFPs. While chain discounts are interesting, the proposals have such unreasonably high growth thresholds that we haven’t committed to any yet. That may change this year but we’re still negotiating. “For now, we’re staying in the traditional RFP mode, but after this year the old model may not work any more. The trick is to see how our program can be viable with distribution changes in the hotel industry.” Cheryl Benjamin Travel Services Manager, Dart Container Corporation “Last year we began sourcing two-year agreements instead of one year, requesting rates that were fair to both parties. We audit rates to ensure we are receiving the lowest available for our preferred hotels and so far so good! If we can secure rates that are fair, remove some of the hassle of the RFP process and create good partnerships with our hotel partners, I believe we can eliminate most of the RFP pain.”
Rosemary E Maloney Senior Manager Global Travel, Coach “We all know that the hotel RFP process is broken and outdated, yet no one has come up with a new viable solution that works for more buyers. Many buyers don’t have the bandwidth to go to all dynamic rates to secure multi-year agreements. Revenue managers should work hand-in-hand with both hotel sales and the buyers. But instead they put up too many barriers and then undercut the corporate rates in slow times. Both sides of the industry need to work together to simplify these processes and be more effective in our negotiations.” David Smith Travel and Relocation Manager, Americas, Amdocs “For me the annual hotel RFP process is very detailed, labor and data intensive, but we do see savings for the company and more satisfied travelers overall. We opt for preferred rates at specific properties rather than national or global percentage-off rates. Over the past few years we advanced from using huge spreadsheets and e-mails to an RFP tool to start the process. We can negotiate and decide on over 80 percent of hotels via the tool; the rest are usually either outside North America or very strong partnerships, which are better for us to meet.
“The engagement with the hotels is valuable because they understand we truly do control the volume and in turn we expect them to provide what our employees need to be productive. We are experimenting with doing some RFPs off the normal January-December cycle. Since we add hotels to our program almost every month, we find hotels have more time and understand better what their inventory is for corporate clients outside the traditional RFP timeframe. (Shhh! I don’t want everyone to do this!)”
Jennifer Steinke Manager, Corporate Travel, Dycom Industries, Inc. “The hotel RFP season continues to be a pain point for so many travel programs. We are a project-based business so our hotel needs change depending on project location. This gets hard to source. We have determined that we can optimize our project hotel needs through dynamic pricing and chain wide agreements. In our bigger locations we still go through the annual RFP process. As we look at integrating tools like Yapta or TripBam, they may influence how we deal with our preferred hotels too.”
Chris Brockman Travel Manager - North America, Electrolux Major Appliances North America “The hotel RFP process is a tedious, frustrating endeavor where I actually question why I am a Travel Manager in Q4 of each year. I try to get an early jump on the process, yet it seems to take longer every time. I can only assume the hoteliers feel the same pain – like accountants during tax season. “There are a few reasons I believe the current process is flawed. First of all, every company in the world is going through the RFP process at the same time, making quick turnaround nearly impossible. Add to that the turnover in the hotel industry; the rep you worked with in years past is gone so you have to chase down the replacement. Finally, the rate loading never seems to be thoroughly tested or completed, resulting in more work.
“Hotels should begin looking at what other travel suppliers do – longer contracts which expire at different times of the year. This would allow buyers and suppliers alike to have a better handle on the process.”