Looking for an alternative to the traditional hotel RFPs? Here’s one buyer’s step-by-step solution
Last July, I sat in a conference room in my company’s headquarters with my sourcing leads and teammate and said the dumbest sentence ever… “I want to do our hotel RFP differently.” I wanted to look at it in a new way; not using the usual tools or even the guiding principles.
During the last few years, we had issues with some of our preferred properties. Our amazing sourcing team would negotiate tough with our hotel partners resulting in fantastic rates – that had a tendency to be sold out by revenue teams. As this issue arose at all sorts of properties, I decided to do some research.
I started to pester not only my sales teams, but I also took advantage of every opportunity to talk to revenue managers and teams across properties and brands (names have been redacted to protect the innocent). I learned that while they may have agreed to the rate, revenue managers would close out corporate rates while keeping others open in the GDS. Then when employees would call our preferred properties, the hotels would honor our rate for the employee for them to book directly – causing distrust and frustration.
As for the available RFP tools, I’ve never been the biggest fan of them. They have poor user experience and interfaces and they double dip by charging both buyers and suppliers. All in all I’ve been dissatisfied with the current technology, so we came up with a new plan.
First, we looked into different technology options for tools. We wanted a questionnaire that we could program logic into it, so our hoteliers could skip the sections that they didn’t need to answer. I wanted it be a one-time data dump. A property would only have to fill this out once and then they would never have to revisit it again.
Second, we needed a tool that would work in China, so anything powered by Amazon or Google web services wasn’t going to cut it. We decided on SurveyMonkey, as it would fill the needs above. We saw this as an opportunity to move our program off season, so we requested our contract terms to last for 18 months and we provided up to 10 seasons.
We had our bidders’ call, asking that we give them a timeline of six weeks – HAHA. Our hotels were given two weeks to provide our first bid, then the plan was for us to provide negotiations back two weeks later – HAHAHA. The timeline was closer to 12 weeks.
To start our analysis, we researched the expected increases in our major cities and calculated the actual average weighted rate from the previous year. Using the historic room nights, we then calculated an estimated average weighted rate for the new bids. Our tier one cities and hotels got more pushback on rates. We wanted to make sure that where we spent the most money, we had the strongest discounts to make the most of our ever-decreasing budgets. For new properties in smaller cities, we still pushed for lower rates.
The problems1. Doing something new meant that hotels couldn’t use their old systems to fill it in. This caused some issues, especially with a nameless large chain provider. While I won’t name names, I will say that it caused significant issues. We weren’t using the system they were familiar with nor did we put in the numbers to match up to the GBTA format. (Remember that whole ‘you don’t need to answer questions that don’t apply to your property’? Thus no numbers.)
2. Our limited number of team members suddenly had to provide extensive operation support to a major event in APAC. This had to take priority over the hotel sourcing project. Whether we were helping with bookings, visas or the many changes to the hotel, the RFP had to take a back seat.
3. Survey Monkey wasn’t a perfect tool to support the RFP. Hotels couldn’t edit their submissions once they provided it to us requiring us to e-mail them the proposals in Excel. We also learned that hotels didn’t record what they submit. For properties that we didn’t need to negotiate our rates, we provided them with the loading directions and the hotels responded asking for what rates we agreed to.
Overall, we felt the hotel RFP was successful. While hoteliers needed to take more time to fill out all of their property details, they will not have to fill it out again. In our next RFP, they will only need to provide the rates.