Procurement Portal Emerges

Meeting portal EventSource, founded in 1998 as a hotel directory and electronic request for proposal engine and grew into a business that offered meeting auction and corporate meeting data consolidation services, last month reinvented itself as an online solution for group travel and, eventually, transient travel procurement, citing the movement of the meetings industry to procurement-based lodging sourcing.

Now called ProcurePoint Travel Solutions, the company's current offerings encompass much of EventSource's functionality, including OpenBid auction services and its Compass data consolidation management application, while offering better integration between the tools on a cohesive platform.

Sausalito, Calif.-based EventSource's leadership—president and CEO Ed Sarraille and chairman Pat Foley—will lead ProcurePoint.

"This evolution to a new position has been in the making for some time," said Chris Kane, ProcurePoint vice president of marketing. "We have shifted our focus to emerging industry trends and expanded our solution set. We've created an enterprise solution that is an extensive evolution of Compass, which will include transient functionality in the second quarter of 2002."

With ProcurePoint's Enterprise Meetings, its first product, buyers will be able to drive savings by negotiating in the company's OpenBid process. After sending RFPs to properties listed in the company database of 12,500 properties, ProcurePoint will invite buyer-selected properties to an online auction. Though some hoteliers have criticized the auction process, Kane said ProcurePoint's disclosure policy allows hoteliers to know which other properties they're bidding against, if not which property is issuing which bid.

"There are usually six to 10 hotels in an auction, all in the same competitive set and their identities are not kept secret," Kane said. "Hotels' objections to this have concerned the lack of control over a competitive set, and we've gone to great lengths to address that." The transparent process also allows hotels that lose in auctions to see why that happened, he said, as the planner often chooses a property that hasn't submitted the lowest bid.

"We gain online access to business processes that allow us to present our best offer on a fair playing field to an important customer segment," said Hyatt Hotels Corp. vice president of electronic distribution Joan Lowell.

After the auction, meeting spending data can be tracked using the company's old Compass tools, a key evolution from the company's EventSource days. "We spent a lot of time integrating individual EventSource tools into a cohesive platform, so OpenBid and management reporting are integrated," Kane said. "This allows for end-to-end sourcing."

One of the first Enterprise Meetings customers is Houston-based Compaq Computer Corp., a company that was a prior user of OpenBid services.

"We're looking at companies that have a central meetings department and use our solution as a time-saver, or companies that want to bring buying lodging in alignment with procurement standards. Also, we're eyeing companies that have meeting planning fragmented and no handle on spend, but know nonprofessional planners who need structure and an account-management platform," Kane said.

ProcurePoint will offer a few pricing options: Clients can pay an annual licensing fee that would run between $10,000 to more than $100,000, based on volume, Kane said, and charge either a transaction fee or a per-meeting fee if actual volume exceeds a negotiated baseline. Additionally, the company can take a 10 percent commission on all hotel rooms booked.

ProcurePoint, like many Internet offerings, is not yet profitable and was not as EventSource, but Kane said funding is not an issue. "We've taken a conservative approach and we're still here," Kane said. "We have a secure financial position and the funding we need."