<B> Paper Still The RFP King</B>
While the concept of using technology to speed up and simplify the hotel bidding process seems to have caught the attention of the industry, technology hurdles--and the pull of the familiar--have the great majority of properties and buyers still using paper for the Year 2000 bid season. A packed roundtable discussion at the National Business Travel Association conference this month showed the depth of interest in automating the most time-consuming negotiating process of the travel industry by using an electronic RFP, or outsourcing the process to a third party that can. But it also brought up the historic concern that the standard is simply too much technology for the average buyer.
The NBTA hotel committee argued that a standard RFP is of little value unless it includes the vast majority of information that most companies need. The form is now up to 420 data fields--"the 420 fields that someone thinks are important. It's easier for the hotel to crank out the same form to everyone and then you import the ones you want," noted NBTA hotel committee chair Rick Wakida, travel analyst and technology manager for AirTouch Communications in San Francisco.
And indeed, many users love it. Eric Miller, Federal Express Corp.'s senior travel specialist in Memphis, had little trouble using the electronic form for the first time last year. "We gave the specs to an IS person and he built the database in three weeks," he said. "The process saved me three or four weeks in turnaround time--and that was extra time I had to review my bids."
But Scott Sward, travel management administrator at SLC Technologies Inc. of Portland, Ore., echoed the feeling of many, saying the form is too complex for those less fluent in technology. What we now need, he argued, is a second version, a sort of Standard RFP Lite.
With a total T&E budget of $5 million and only 10 preferred properties, SLC is "not negotiating on the same level as larger companies, and much of what's on the form I don't need. I send out a letter to the hotels around our plants, but if it were possible to point, click and have a simple proposal printed, I might extend my program to more hotels."
Indeed, even the big buyers acknowledged the hurdles they face. "We did the process at Bayer and found that 420 data fields is too much to import into an Excel file. We had to go back and have them send the property profiles and the pricing separately," said one audience member.
And at IBM, which last year tried a global bid using the standard RFP for the first time, "we really customized it, and for 2000 we will do something similar," said hotel program global leader Stella Bugtas. "We cut it back from six pages to three, and we sent it to the chains hard-copy. We don't want to do electronic because the hotel community at large is not yet capable of sending us error-free electronic data. It's not ready--and we need to go with what works."
"If I had to look into a crystal ball, I'd say we're probably not going to create a short form," said hotel committee member Wendy Nathan, travel services manager at Johnson & Johnson in New Brunswick, N.J. But she noted the committee will meet on Sept. 15 to consider changes for the 2001 standard form.
On the hotel side, "For independent properties that aren't technology-oriented, it's a bit of a challenge," acknowledged Preferred Hotels' national accounts director Joe Carino. "But it brings them into a new realm."
Marriott's Debbie Meekin said the chain is using the form to bid electronically "across all our brands, all our programs, all our hotels."
A Promus person in the audience said the company is "offering Hampton Inns a choice this year of responding on paper or electronically, and we convert that into an electronic bid at the chain level."
Meanwhile, current users of the form are reporting seriously positive ROI figures. J&J's Nathan noted that her "one-time investment of time and money becomes a yearly download of information that pays out year after year in terms of the integrity of the data and the speed of the response time." Carino said Preferred Hotels is "looking at huge time savings--of 20 to 30 hours per hotel."
That efficiency should carry through to the customer level as well. "If we know in advance that these are the 420 questions you want answered, we ought to be able to respond to you in 24 hours, and minimize the errors," said Marriott's Meekin. "This process enables travel managers to focus on the strategic rather than the administrative, and hotels to focus on the customer instead of looking for a typewriter. It's hard to quantify that, other than to note the redundancy of big hotels spending 45 to 60 minutes each on more than 1,000 proposals.
Indeed, the concept of standardizing the RFP process is such a hit with suppliers that travel agencies seem anxious to bring the trend to their own sector.
"Our business arrangements are becoming too complicated. I would campaign for scaling down RFPs, taking a few shortcuts in describing our services, defining common terms and a core transaction, and giving it a set price and letting customers build a program step by step," American Express Corporate Services president Ed Gilligan said.