Rare are the times when hoteliers are frustrated by too much
demand, but a tsunami of electronic meeting requests for proposals, many
including dozens of properties and triggered by the rise of a few third-party
RFP applications, has left properties struggling to keep up and demanding
changes. It also leaves meeting buyers searching for strategies to separate
their e-RFPs from the pack.
The e-RFP explosion largely is a result of growing
popularity for the mechanisms offered by meetings technology companies Cvent
and StarCite, among others, and the use of those tools by large
meetings-management and site-selection third parties. Users of those tools have
the option not only to ask more than 100 questions of a potential meeting site,
but also to forward that request to dozens of venues. The result is a far
higher number of leads for properties, but much lower closing rates.
"It's broken," said Hyatt Hotels Corp. senior vice
president of sales Jack Horne. "This whole thing got out of control almost
overnight on us."
E-RFPs Marriott International received in 2011 increased by
44 percent from a year earlier and now comprise about half of all leads, said
senior global account director Doreen Burse at a March Cvent client conference
outside of Washington, D.C. "But when we looked at the closure ratio for
the leads that we don't receive between traditional voice and email, it's 50
percent less than traditional sources," she said.
Hotels have few options in dealing with such an influx, said
Dave Lutz, managing director of Velvet Chainsaw Consulting and former president
of the event planning and registration division of meetings-management third
party Experient. "It's a very inefficient model and it's not sustainable,"
he said during the Cvent conference, "and the only choice hotels have is
to throw technology against it or hire lower-level people to deal with the
situation. … To the degree that you're not efficient from a cost-of-sale
standpoint and they need to throw more resources at it, it's a challenge we all
need to deal with."
Methods hotels are employing to address the e-RFP wave vary,
from some shuffling of internal resources to the development of technology
designed to automatically respond to questions with no human intervention.
Loews Hotels & Resorts, however, hasn't taken
particularly drastic measures. "We've had to dedicate more resources so
the right leads are being worked on by the right people," said vice
president of global sales Michael Dominguez at the conference. "But I'm a
firm believer in not telling clients how they're going to buy from us. We've
had to look how to best utilize what is given to us, while educating the audience
on the best way to streamline the process."
Marriott uses what Burse called "lead triage" to
separate the wheat from the e-RFP chaff. "There's a pattern we use to very
quickly decide what is the best resource to pull that lead through. We'll handle
a complex, three-day, multiple-hotel lead differently than we would a 20-room
meeting in two weeks," she said. "We want more leads and more
at-bats, but it has forced us to look at how we're deployed in how we manage
the lead process."
Gaylord Entertainment Co., operator of several large
meetings-centric U.S. hotels, two years ago centralized its lead-managing
process, said executive director of lead generation Eric Mannino at the
conference. The company has exploited the new structure to better evaluate e-RFP
leads.
"By centralizing, the lead goes to the right person
almost immediately, but it's changed the way we evaluate them," Mannino
said. "While we've centralized the revenue management process, this is
more about business evaluation. Nothing gets turned down. When leads get
entered, they are pushed through a business evaluation tool. At the same time a
sales manager gets the lead, so does business evaluation. What they're
evaluating is what is the best fit, and they provide guidance back to sales managers."
[PULL_1]Turning To Tech
Hyatt, though, is taking a stronger step. Noting conversion
of just 2 percent of meetings leads from electronic channels, including Cvent,
StarCite and Hyatt.com, to booked business, Horne said, "It might be a lot
more volume, but it's not getting the results." He added that such
converted leads comprise only 6 percent of Hyatt business—but replying to them
can take up hours of a salesperson's day. To alleviate the burden, Horne said
Hyatt by year-end will introduce a tool that will automatically respond to
e-RFPs with some prepopulated answers.
"It will self-populate, and allow us by year-end to
return rate, food and beverage and meeting room rental [rate responses] without
human intervention," he explained. "Even if they submit 119
questions, we'll be able to self-populate probably 70. So if the customer is
serious, they can follow up."
Development of that tool, Quick Book, is made easier by the
recent addition of every full-service Hyatt hotel in North America—whether
directly owned or franchised—to the chain's Envision proprietary sales
database, to which StarCite and Cvent can connect, Horne said.
Still, while complimenting both the meetings tech companies
and the large third parties—ConferenceDirect and HelmsBriscoe, whose use of the
tools accounts for much of the e-RFP surge, according to Horne—for their
cooperation in addressing the situation, Horne said he would like to see
further changes to the RFP technologies. "We're hoping they'll revise the
tool, so the whole thing can self-populate, at least initially," he said.
Anthony Miller, vice president of strategy for StarCite
parent Active Network's Business Solutions division, called Hyatt's effort "a
contribution to an improvement. It's a natural response to some of the things they're
seeing. From there we're going to do some things with them to help them
understand which RFP may be appropriate for an automatic response, and which
would be more appropriate for a more manual, hands-on approach."
Neither Miller nor StarCite supplier market general manager
David O'Donohoe would detail what they called planned upgrades to StarCite's
RFP tools to help address hotelier concerns, but they said they already have
developed lead management technology for hotels and have pushed several planner
education initiatives to better meetings RFP submissions.
"Over the past two or three years, we've had a major
initiative in driving quality through the channel, and we do that through some
of the partners we do business with," O'Donohoe said. "I don't think
we should lump the e-RFP providers into one bucket. We've had significant
improvements in our channel in reducing the number of hotels per RFP, and we'll
continue to do that.
"A lot of it has to do with education," he
continued. "When we talk to buyers, we tell them that if you send a lead
to a hotel and it has 25 hotels on it, your chances of getting good responses
are slim. Hotels have to prioritize those leads to be able to respond
effectively. Hotels want their best sales managers working on their best leads
to drive the highest conversions possible."
Cvent Supplier Network senior director of sales George
Shagoury said his company also has staged recent meetings with buyers,
suppliers and third parties to help improve the process and Cvent's role in it.
He noted recent advancements like the integration of hotel technology systems
with Cvent and the ability to allow users to prepopulate basic responses from
prior RFPs.
"From a technology perspective, there is a way to
create automation to allow some standard responses to be answered,"
Shagoury said. "A hotel's distance from the airport, for example. Is there
a way for that to be defaulted in a response? The answer is yes. We're looking
at different ways to streamline that process."
Gold Among The Morass
The wave of e-RFPs makes it that much harder for meetings to
stand out and gain the attention of hoteliers. Velvet Chainsaw's Lutz noted
that regardless of the channel through which buyers choose to submit RFPs,
documented history often will carry the day.
"If you're a corporation or a large third party, you're
getting good contacts and relationships with hotel chains, and they can track
your share," Lutz said. "If you're doing enough business, your RFP
always is going to be at the top of the list."
Loews' Dominguez also cited the importance of providing
meetings history—even three or four years' worth—in hotelier decision-making
processes, and Mannino noted the importance of potential ancillary revenue in
the form of onsite meals and events and the proximity of a deadline for a buyer's
site-selection decision.
Despite the frustrations caused by today's e-RFP landscape,
hoteliers aren't likely to let business slip away because of it. "I'm not
really concerned with the number of hotels you're sourcing, as long as one of
them says 'Gaylord' on it," Mannino said. "If you're giving us the
opportunity to bid on it, we're going to take the opportunity."
This report
originally appeared in the May 2012 issue of Travel Procurement.