Hotel RFPs: What's the story?
Following the ‘Annual Hotel RFP – Finding You a Better Way!’ panel session at the 2019 Business Travel Show, attendees were asked how they organise their preferred hotel programme. The poll results were as follows:
- 55% outsource on a yearly basis
- 25% do it themselves every year
- 10% outsource every two years
- 10% do it themselves every two years
This particular poll shows, many corporates still follow an annual hotel RFP process. It’s one which takes several months and resources.
And yet, current market trends and reports increasingly suggest that businesses are moving towards alternatives, such as two-year RFPs. The main reason is that buyers believe it provides a more consultative approach; they’re able to look at their data over a longer period. For example, this deeper insight can help them to better understand what they’re buying compared with what travellers book. And in theory, it’s less time and resource heavy than the annual negotiation seasons.
According to a recent Buying Business Travel feature, ‘Sourcing: Step change’, “Contemporary sourcing is dynamic, using real-time and predictive data for decision-making in partnerships between buyers and sellers, based on mutual trust and understanding.”
But you can’t do a dynamic discount if you don’t know what the original rates are. So, hotel data analytics are important, no matter which process corporates choose.
And technology has its part too. The ‘Finding a Better Way’ audience was asked whether they would consider using rate assurance tools like Tripbam or Tapta. These tools claim to rebook hotel rooms at the cheaper rate if they become available closer to the date of stay. The poll results?
- 64% no
- 24% yes
- 12% didn’t know what the tools were
It seems the raft of options could be causing confusion for buyers, particularly those who haven’t been in the travel game for long.
“This is where a good TMC will guide it’s clients through the options and help them to decide which route is best for their business and their hotel programme.” says Julie Shorrock, managing director of HTS.
She continues “Today, hotel sourcing is about more than negotiating a fair price for your expected spend or volume of business. The RFP isn’t just about price – it’s about traveller safety and security, and peer reviews – what your colleagues think of their accommodation. So buyers are selecting suppliers with these in mind too.”
Regardless of which route corporates choose to take for their hotel sourcing, relationships are vital. As one of the ‘Finding a Better Way’ panellists put it, “…you should bring the right people to the table to challenge and make the necessary negotiations – engage the right people for the right solution.” And you certainly can’t do that without effective supplier relationships.
Want to know more around Hotel RFPs? Get in touch with the team today.