September 29 2022, Kimpton Fitzroy London
Friday 30 September 2022, JW Marriott Grosvenor
21 November 2022, Hilton London Metropole
It’s that time of year again... The hotel request for proposal (RFP) season is upon the travel buyer community.
Between now and the start of next year, when freshly negotiated rates are loaded into the bookings systems, buyers and suppliers go head-to-head on hotel contracts. Occupancy levels are strong across the UK, and much of Europe and the emerging markets. It’s not necessarily a sellers’ market, but the hotels are in a strong position.
This year the buyers’ objective is less likely to be about driving down rates, and more about finding added value for the programme. In any case, both sides of the deal appreciate the precarious nature of the contemporary global economy. Rest assured, negotiations will be tough but respectful. Buyer-hotel partnerships are for life, not just until Christmas.THE PRIVATE SECTOR BUYERStephen McGrane, global travel category manager, XchargingThe starting point: What do you want to achieve: cost savings? Content en¬hancement? Consolidation? Collate all the relevant data. Ask suppliers and TMCs [travel management companies] for a raw data file. The T&E [travel and expenses] data is also vital if you are to establish what is being booked out of policy and what is being channelled through the TMC to preferred suppliers.
After the initial assessment, align the RFP questions with your goals. Be sure to involve all relevant stakeholders. You don’t want to miss anything, such as a vital piece of legislation on a multinational RFP, or a chief financial officer’s PA who spends £200,000 annually on hotels.
Ask suppliers about how to get the best from them, and for their opinions on new developments and opportunities. It may give them a sense of belonging to your programme. This is especially useful for ancillaries or adding value to the programme. Suppliers have inside knowledge on what is available and what is in the pipeline.
Always include the major chains when inviting hotels to tender, particularly on large-scale RFPs, where content can run into thousands of properties. They can help establish a platform of necessary properties to manage demand. Closely align this to the TMC and T&E spend data from your finance team. Feedback on frequently-used prop¬erties from bookers may present some savings opportunities and insight into traveller preferences.Outline your expected outcomes and any changes to your business or pro¬gramme since the last RFP. This helps suppliers understand your needs, keeping them focused on your goals instead of just their own revenue points. Keep it simple: too much detail can produce unexpected results. Set up 30-minute calls with chains and existing preferred suppliers to run though the key points and expected outcomes of the RFP, as it can clarify many misunderstandings ahead of time.THE TMCNicky Traynor, commercial manager, NYS CorporateStart by revisiting and measuring the previous year’s objectives and ascertain next year’s goals. Data plays a vital role in the process. Provide a clear picture of key locations, hotel volumes, feedback and average achieved rates. This helps identify appropriate suppliers to take part, and helps us to undertake an effective negotiation ex¬ercise and consolidate a preferred hotel programme that will be used by the client’s travellers.For existing clients, data is easily acces¬sible through MI [management informa¬tion] and hotel reporting. However, for new clients we rely on analysing one or multiple information channels: expense systems and credit or procurement card reports. Speaking to key bookers and travellers helps the TMC paint a picture of their expenditure and booking patterns.Hotels with previous high bed-night volumes, chains with geographical coverage in key locations, new openings and a wild-card recommendation assist with competiveness and would be invited to partake in an RFP. To reduce challenges, it is essential all hotels fit the original brief and the client’s objectives. Including a testimonial from the travel buyer and a top level booking pattern overview helps in outlining the requirements. During the process, it is important the hotel reads and completes all details, under¬stands the objectives and replies in time for the specified deadline.
Price negotiation is a key element of the RFP process – but we encourage hotels to think outside the box. They should include added-value items such as free wifi and car parking, or look at package pricing and incorporate taxi fares from the hotel to the office or station. Discounts on food and beverages for guests reduce subsistence charges to the company. Sup¬porting local companies with staff dis¬counts is a great way to show you wish to work in partnership. For the travel buyer, these inclusions within the rates reduce the overall cost of a stay and add value to the company and business traveller.
THE PUBLIC SECTOR BUYER
Charlotte Lowe, travel manager, University of East London
Travel managers know a high volume of room nights means an RFP process is the smart way to secure best-negotiated rates for their programme.
It’s essential to get good data pinned down and analysed prior to entering into an RFP. TMCs are there to assist, so you should work closely with them. If your data is good and you know your city room nights, booking trends and the objectives of your programme, then the rest of the process will be far easier and a much more pleasant experience for both parties.A hotel programme needs to be moni¬tored regularly. There will be times when particular hotels in your portfolio aren’t matching where travellers actually want to stay. No matter what you do they’ll choose that particular hotel anyway, which creates leakage. It’s worth trying to find the balance. Understand why it is hap¬pening. If there’s a legitimate reason, you may be better off bringing that hotel into the portfolio to ensure competitive rates.
Communication with bookers and trav¬ellers is key. A hotel programme needs to be publicised throughout your business. Most OBTs [online booking tools] will prioritise these rates during searches. But it’s often worth consulting bookers and travellers so they feel part of the process and encourage commitment to the hotels in the programme. This two-way conversation helps you get feedback, so managers can ensure the service being paid for is being delivered to the guests.We’re also looking into dynamic pricing. For a business like ours, which doesn’t have hundreds of room nights in par¬ticular cities, we find ourselves booking the best available rate [BAR]. We do have a small hotel programme and it can be challenging to utilise our rates, because of the demand on rooms where we’re located – on the doorstep of the London Excel exhibition and convention centre and the Olympic Park. So having a mix of negotiated rates in some locations and a percentage off BAR in others is potentially the best way of achieving value for money.