Bank Convenes Hotel RFI Forum

<B>Bank Convenes Hotel RFI Forum</B>

By Bruce Serlen

As they put together the 2001 preferred hotel program for Credit Suisse First Boston, travel managers at the global investment bank sought an innovative way to improve their communication with hotels that were either already in the program or wanted to be. Enter the hotel forum, held for the first time last week at CSFB's New York headquarters.

Of the 50 hotel companies invited, more than 90 percent attended the midday informational event. Most of those attending were global account representatives from the major chains, though a sampling of independent hotels also was present.

"We wanted to be proactive and get the hotels' input early enough in the process so that we could accommodate their comments before the RFPs actually go out," said Erin Wilson, vice president of global hotel and car rental programs. "For the first time, we're introducing a Web-based RFP process this year, so we wanted to be doubly sure hotels around the world were comfortable with what we were doing and what we expected to achieve."

"So much of our communication with hotels, by necessity, is not face to face," she added. "As a result, we thought it would be beneficial to bring everyone together in the same room to exchange ideas and get feedback. During the session, there was a lot of give and take, which allowed the hotels to learn from each other as well as from us."

The bank's annual hotel spend is approximately $80 million, 50 percent of which is domestic and 50 percent international. About 6,000 CSFB employees travel under the program.

<B>Going Out Early</B>

Unlike other large companies, CSFB doesn't wait until the fall of the year to send out RFPs. "The RFPs go out July 1 and are due back to us Sept. 1," said Wilson. "The next two months are spent in negotiation over rates as well as clarifying any facets of the program that may still be unclear. We then make decisions by Nov. 1." The new negotiated rates then are loaded into the GDSs and are "included in the hotel directory on our Web site by Dec. 1," he said. The rates go into effect on the first day of the new year.

Michelle Lee, a CSFB director and head of global travel and corporate events, explained the company's rationale for building additional time into the process: "This kind of timing provides the hotels two extra months to respond, which they can use to ensure the integrity of the data. Data integrity is key to the RFP process working effectively. In fact, so much time is wasted when there's a lack of data integrity. The hotels we work with need to be clear on our requirements, at the same time we want to be sensitive to their needs."

There's also an added benefit for CSFB: Because most other companies don't start their RFP process until the fall, the firm gets a larger share of the hotels' attention those first two months. "It isn't crunch time for them yet," said Lee.

In the negotiation phase, CSFB achieved 10 percent savings in 2000. Lee and Wilson are going into 2001 negotiations expecting rates to remain flat with minimal adjustment to the preferred hotels in the program.

"Better communication between companies and hotels in putting together a preferred program is a goal across the board," said consultant Julie Hylton, director of hotel consulting for American Express Consulting Services, which is not involved with the CSFB program. "The more precise the company can be as to its travel patterns, office locations and so on, the better able hotels will be to respond in a productive way."

At last week's forum, each participating hotel company received a personalized packet that listed all of that hotel company's properties that are in CSFB's program for 2000. "Included as well was a listing of every property we are looking at to complement the existing program in 2001," said Wilson.

In addition, each hotel company received an overview of CSFB's hotel program objectives, a description of the firm's online booking product and reporting and contact information within the firm.

What the hotel companies did not receive was competitive information on how other hotel chains stacked up in the program, either in 2000 or as projected in 2001.

The hotel directory is structured by city in a specific geographic area. Preferred hotels are listed in 86 cities around the world where the firm has offices--and in an additional 50 cities that are frequent destinations for CSFB travelers because important clients are based there. A total of 750 hotels are in the program worldwide.

The firm's top three cities in terms of volume are New York, London and Zurich. "Because the bulk of our spend is in those cities, negotiations will be especially intense there," said Lee.

In New York, for example, 28 hotels are on the approved list. Because proximity is so important, all are within a 40-block range of the firm's offices. "While they are at somewhat different price points, the negotiated rate is within $50 at all of them," said Wilson. "Major chains are on the list as are a few boutique business hotels--again because of proximity."

The 28 approved properties are ranked in three categories. Travelers booking a hotel are directed--either by the company's travel agent or via the online booking mechanism--to certain categories first, depending on availability. "Given how tight a market like New York can be, many of the selections may be sold out on a midweek night," said Wilson. "But we provide detailed instruction guides online and travelers tend to know--and be comfortable with--the policy."

Dealing with so many hotels in so many cities can be a very fluid situation. "There are so many variables to consider," said Richard Venezio, president of Events Forum, a consultant for CSFB on the hotel program. "You want to keep the list as current as possible. Company or client offices may relocate, for example, which means that there now may be hotels in closer proximity that you hadn't considered previously."

When it comes to negotiating last room availability, Lee feels it is important, first and foremost, to make sure she and the hotel have the same definition in mind. "Last room availability can mean different things to different people," she said. "We understand there are going to be black-out periods, for example. But by last room availability, we mean run-of-the-house availability for the room types we are requesting with the exception of suites. In addition, the CSFB definition of last room availability appears in our RFP to ensure complete clarity."

As for compliance, CSFB travelers tend to cooperate. "In most cases, you need approval to stay at a non-preferred hotel or, if it's after the fact, you need to submit an explanation," she said. "Having the policy so clearly stated makes people think twice about choosing a hotel that's not in the program."

When the hotel program first began, the firm made sure to get travelers' input on the initial selections. "We checked with the different divisions early on and got their buy-in," she said. "An internal hotel council of 75 members worldwide provided input when the program first launched. As a result, there's the sense that the directory accurately reflects the needs of our travelers, which helps us drive compliance."

Unlike other large companies, rate loading hasn't been much of an issue for CSFB. "Because we start the RFP process earlier, we expect rates to be fully loaded by Dec. 1, not Dec. 31," said Lee. "We follow up during December, if necessary, because the rates take effect on Jan. 1. That's an imperative because we're looking to see the effect of the rates in the first quarter."

Nor has CSFB chosen to work with the NBTA standard RFP form. "We created our own customized database, which will now feed into the new RFP Web site," she said. "The NBTA form is an excellent effort. But some of the information it requests we didn't feel we needed, while some of the data we felt were necessary were missing. We fully expect to review the NBTA form as it evolves and consider using it in 2002."

Much of the discussion at the forum revolved around the new RFP Web site. "Particularly for hotel companies that aren't U.S.-based, we wanted to be sure we weren't inadvertently creating an obstacle," said Lee. "After all, we're looking to create a process that's fair for all the parties involved."

The Web site was well received from hotel companies in all parts of the world. "Of course, we don't want to be rigid. Should there be a hotelier who can't submit the data on the Web, we'll certainly make allowances," she said.

Most of the properties that CSFB ultimately selects are four or five star. Additional requirements--not counting an acceptable rate--include guest rooms with sophisticated telephone systems, computer access and separate modems. "Technology is paramount to our travelers," said Wilson.

Other amenities the firm's travelers prefer include onsite dry cleaning, 24-hour room service, fitness centers, business centers and, in Europe, complimentary continental breakfast.

Driving much of Lee and Wilson's proactive approach to the hotel program is a directive from CSFB's senior management. "These executives want to see productivity gains at the same time we cut paper and move to electronic processes wherever possible," said Lee. "We have their full support to launch these initiatives."

Lee and Wilson also were sure to build the right relationship within CSFB's technology group. "As we moved toward creating the RFP site, we realized how invaluable these internal resources were," said Lee. "Travel managers really need to look upon information management as partners, not only for developing the product but for troubleshooting."

In addition to the information exchange, CSFB's travel buyers were struck by the sense of camaraderie that emerged from the forum last week. "We feel we know what hotels need to make the RFP process succeed--and now we feel they know what we need," said Wilson, who had many years' experience in the hotel industry before joining CSFB.

In this spirit, when she was putting together the hotel information packets for distribution at the forum, Wilson also included information on the road shows and group meetings that the firm holds.

"We wanted participants to have an idea of what CSFB's hotel needs are beyond the individual travel piece," she said. "After all, when you're a preferred provider in our hotel program, we want to give you the opportunity to get more business from us.