Is your business ready for RFP season? Read our expert guide
25 October 2016 by Lone Konradsen
Our hotel experts manage negotiations all year, but Oct-Dec remains the busiest time - here’s how to give RFP the best start.
Managing accommodation requests for proposals (RFPs) is a vital negotiation process for travel buyers. The outcome is a list of preferred hotels and agreed prices for your company’s travellers. The right result should be a list that keeps costs down, and keeps business travellers comfortable.
Know the market
Getting to grips with influential market trends is a good starting point. It’s important to arm yourself with global, regional and local price forecasts so you know how pricing might change in your main operating locations next year.
Then, familiarise yourself with recent hotel and venue openings, and any changes to existing properties. In today’s rapidly evolving hotel sector, there are tonnes of quirky options. Independent properties are competing with the established brands on value and comfort. With economy brands growing, the number of low-cost rooms available across the UK is rocketing. How might these new openings suit your travellers’ needs? You need to know your options.
Finally, do you understand how hotels approach the pressures of profit and pricing? Getting to grips with that will help you to gauge how suppliers think about your company’s business.
Don’t just use last year’s RFP as a template. You will miss opportunities and risks. Give your travel management company (TMC) the full picture. They need to know how much is being spent, in which locations and with which suppliers. They also need details of room types, meal plans, long-stay bookings and one-off projects. A good insight into your meetings activity will help, too, so provide any records of day-delegate rates and basic room-hire rates.
Traveller wellbeing and duty of care is always high on company agendas. You should consider what you’re doing to support travellers and what your aspirations are for the year ahead. Do you have any minimum standards? And does your travel policy restrict, or support, current business requirements?
Agree criteria for your RFP
Decide on your strategy and objectives for the RFP. This includes realistic timescales for suppliers to work towards. Technology that automates the process can assist with time-saving and accuracy.
Then, define how you will benchmark rates. You might consider market rates, previously negotiated rates, maximum allowed spend per night (rate cap), or important pricing terms such as meal plans, commission, total-cost-of-stay considerations and tax. If you’re completing a meetings-venue RFP, these terms could include things such as equipment and syndicate rooms.
Looking at your booking profile could help you to decide what your supplier selection criteria should be. For instance, average length of stay, day-of-week booking patterns and booking lead time are all important.
If you’re going to make changes to your policy, you need to know how you will measure the impact of any changes. One way of doing this is to look at the volume of employees who stick to your current programme, as a marker of its success.
Speak to your stakeholders
Your senior employees could have vital insights on future projects and locations you need to plan for. Potential new business will help make you attractive to the suppliers. Therefore, make sure the plans are accurate and don’t be tempted to embellish the impact on hotel bookings in key locations.
When you communicate with potential suppliers, highlight what your travel policy does well. This is because hotels want a contract with customers that have firm control of their travel spend and the ability to influence the travellers to follow it.
The travellers themselves can give you feedback on individual properties. That will help ensure employee welfare, which is important to any RFP programme.
Finally, ask your TMC’s reservation team for their advice. They’ll have experience of what works and any challenges or opportunities you might encounter.
Tell your travellers
You need to influence all your different travellers to make smart choices for the company and their own wellbeing. Think about what information and tools you have available to help you implement and share a new programme effectively.
Put the policy into action
It’ll be pointless negotiating rates that no-one can actually book. Understanding what your travellers’ requirements are will help you take advantage of the best offers. These might include room allocations with multiple release dates, or last room availability rates.
You also need to consider the distribution channels for the rates – in other words, which global distribution system (GDS) is being used by your TMC. Do you have other travel partners globally that need access to the same rates? Ensure they have the systems in place to ensure rates can be seen by all involved, once agreed.
Audit, audit, audit
Signing the contracts should be just the beginning. Before you start, commit to a realistic review schedule for regular audits against rate performance, compliance and traveller feedback. An accommodation programme is a living beast that needs careful management throughout the year if it is to be tamed so that you can maximise savings, efficiency and traveller welfare. For more on this, read our guide to auditing hotel rates.
Interested? Let’s have a chat about your company’s travel, meetings and events objectives - from the stuff that keeps you awake at night, to the everyday experiences of your employees! Call us on 0330 390 0340, or submit your details below.