Buyers' RFP Stress Prompts Tool Upgrades

Third-party RFP vendors for this year's hotel negotiating season have added new technology to track hotels' response time to ensure a greater percentage of requests for proposals are completed accurately and on time. The efforts are in response to travel manager reports that an increased number of hotels last year did not respond to their electronic RFPs or filled the forms out incompletely.

"We're seeing more hotels choosing not to respond to RFPs, which is frustrating since they claim they want to be included in the hotel program," said Jo Ann Gallardo, hotel/meeting coordinator for Dell Inc. in Round Rock, Texas, this month at the National Business Travel Association annual convention in Orlando. "They know they won't be included in the bid process without going through the RFP. At the same time, some of these same hotels are trying to bypass the program altogether and negotiate rates directly with travelers, so it seems they intentionally are failing to respond to the RFP as we would prefer."

To ensure all the critical information is completed on the RFP, third-party vendors Lanyon and RFP Express have built quality control mechanisms into their tools. "To help ensure that more RFPs are completed to buyers' specifications, this year we've introduced a color-coded system where fields indicated in red must be filled out. This is mandatory," said Rik Danielson, Lanyon executive vice president for marketing and sales. "Hotels that don't comply can expect to get the RFP back, so they can supply the missing data."

RFP Express has introduced an upgrade called Express Forms, which allows buyers to create their own tool. As part of this process, buyers can indicate which fields of information hotels are required to complete, according to Brian Langer, vice president of sales and marketing. "Checking on those fields tells the hotels they're mandatory," he said. In addition, buyers have the option of not including entire modules, such as the safety and security section, if they don't consider the information relevant. "More likely, within a module there will be select questions they want to delete," Langer said.

Modules typically include requests for 100 fields of information. Eliminating an entire module shortens the RFP significantly. Trimming individual questions is less drastic. At the same time, responses to certain questions can be made mandatory.

"The sum of these changes is that hotels are more likely to respond to customized RFPs since they're going to be shorter and the requests for information more focused," RFP Express' Langer said.

Both Lanyon and RFP Express built their structures based on the latest version of the National Business Travel Association's modular approach, which is considered the industry standard. The 2005 NBTA form further streamlines a model last updated for the 2003 bid season.

"Given the number of hotels that large buyers especially are soliciting for RFPs and the number of proposals many hotels are processing, turnaround time becomes crucial. Neither side can afford any wasted time—such as is entailed in having to revisit an RFP that was incompletely filled out the first time," Danielson said.

To keep hotels further on their toes, third-party vendor Uversa International this year is introducing status reporting. "Considering they have some hotels that don't respond, clients tell us they want to be able to see where an RFP is at any moment in the process," said president JoAnn Baynes. "With this in mind, we've introduced a change log so buyers can see every change that's been made to a hotel bid and when."

In the past, this information was not visible to a client, at least not in a formalized way. "Each year, we're making more and more of the process visible to the client. Clients feel more empowered, if they know what's going on during the process," Baynes said. "Especially when they've entrusted this critical phase of their hotel program to a third party, they sometimes can find themselves in the dark."

Particularly when a hotel hasn't responded at all to an RFP, buyers want to know as soon as possible, so they can make adjustments accordingly. "Depending on the market and the number of room nights involved, buyers will want to solicit one or more other properties for an RFP. They need to protect themselves that way," she said.

Lanyon also has introduced a form of status reporting. "Corporations in the past really haven't known where they were in the bidding process. They had to call or e-mail to find out," Danielson said. "Now as part of an electronic exchange, they'll know that X number of hotels in a market had decided not to bid, X number had begun the process and X number had submitted complete RFPs."

As the last part of the status report, buyers are able to learn whether hotels with which they have been negotiating rates have received acceptance or decline letters.