RFP Add-Ons Complicate Process

<B>RFP Add-Ons Complicate Process</B>
<I>Hotels Grapple With Proliferating Standard Form Addenda and Use</I>

By Bruce Serlen

Addenda to the industry standard request for proposals form are becoming more common and adding to hotels' frustration in getting corporate travel buyers to accept their 2001 RFP responses.

Separately, while many corporate RFPs are routed through the hotel chains' national sales offices, properties at the local level have reported increased RFP activity, especially from locally based companies that account for a substantial number of the room nights at nearby properties.

At the National Business Travel Association, meanwhile, the newly appointed chairwoman of the hotel committee, Wendy Nathan, expected long-awaited changes to be made in the association's standard RFP form that would make the form easier to use. Those hanges should be in place well in time for the 2002 rate negotiations.

"The good news is that the electronic version of the NBTA form clearly remained the industry standard this year," said Lori Scheibelhut, marketing manager for Arlington, Texas-based Lanyon Inc., whose tool, RFP Assist, is widely used.

"Many corporations used the NBTA's long form, but they still chose to include addenda. They had their own set of questions that they felt they needed to have answered and that they felt weren't covered by the form," Scheibelhut said, explaining what the rationale was for including addenda in the first place.

"Much depends on the corporation's own requirements: its travel patterns, the kind of hotels it wants to include in its program and the various amenities it's looking for at the hotels it works with."

On the simplest level, an addendum for a consumer products or office services company might ask if the hotel uses that company's own products or services. The company will be driven by a desire to bring its business to hotels that contribute to its own bottom line.

Last year, the NBTA had moved to support the long version of its form, which includes requests for 420 fields of information, as opposed to the much more concise short form. This was the case again this year.

"Frequently, corporations find it difficult to settle on one solution that meets all of their RFP needs and that the hotels can then respond to--and vice versa," Scheibelhut said. "Both sides struggle with that."

Once the corporations make their requests for information to the hotel chains, those requests are disseminated, typically by the national sales office to the different properties in the chain. Hotel chains are frustrated because many of the properties don't yet have the technology in place to respond electronically.

The large number of addenda complicated matters further. "What with a variety of national, regional and local accounts, the RFPs can be difficult to keep track of," she said. "In many cases, local properties still processed the forms this year using paper. All the addenda add to the frustration."

Hotels are eager to find a consistent way of processing the addenda.

"If there's a pattern in the addenda showing up, you would think the NBTA hotel committee would want to include this information in the form itself," said Doug Willbanks, president of Redwood City, Calif.-based Direct Connections, which works with companies to create their own RFPs. "This would eliminate the need for at least some of the addenda and help simplify the entire process."

Using paper as opposed to electronic submission is time-consuming and inefficient. According to Bob Steiner, president of San Diego-based Ixata.com, which produced RFP Express, electronic transmissions not only eliminate paperwork, the data easily is converted to online directories. In addition, for corporations whose program is administered from different points around the world--both in the United States and internationally--the electronic approach allows users all over the world to access documents and respond 24 hours a day.

Underlying much of the current frustration is the fact that hoteliers can't assume that their responses to a corporation's RFP automatically will be accepted, addenda notwithstanding. "Acceptance isn't necessarily a given," Scheibelhut said. "The hotel might not have filled out the form to the corporation's acceptance level because of the technology involved. Not all technologies enhance the process."

Certainly, the goal is to gain acceptance the first time the response, addenda included, is returned to the client, addenda included. "In fact, it can take up to two or three rounds," Scheibelhut said. "Of course, the data provided also needs to be accurate and relevant at every stage. Quality of the data is crucial throughout."

Rates of acceptance, however, still are greater electronically than with a paper-based system. According to Steiner, 40 percent of paper responses in 1999 were noncompliant to RFP requirements. This compares with the 13 percent of Internet responses that year that weren't compliant.

Each hotel negotiating season, Scheibelhut said, corporations gain greater understanding of the hotels' needs. "They're realizing they'll get a higher level of responses and a faster response time by using the industry standard."

At the regional and local levels, proposal requests are filtered down from the hotel chains' national sales offices, which then uses the form to funnel the information back to the client. "At the same time, an account might not have enough volume to qualify as a national account, but might still have enough to be an important account in the region," said Kip Horton, area director of sales and marketing for Westin Hotels & Resorts in Atlanta.

An account also can qualify on both counts. White Plains, N.Y.-based Starwood Hotels & Resorts Worldwide, Westin's parent, for example, might have a national account with a corporation. "But as a local hotel, we would have our own account with a locally negotiated rate," according to Ed Walls, general manager of the Westin Atlanta North at Perimeter Hotel. Regardless of under which account a booking for that company was made, the rate would be the same. In some cases, one RFP would be involved. Other cases could involve separate RFPs, depending on the particulars of the situation.

In return for this locally negotiated rate, it can help if the account can indicate on the RFP as closely as possible what the demand is likely to be.

"The question is, 'When do certain accounts use you?' " Westin's Horton said. "Is it peak season or all year? Is it just Tuesday and Wednesday nights, which are high-demand nights, or is it all week? So, to this degree, it's more than just room nights."

NBTA hotel committee chair Nathan, who is also travel services manager at New Brunswick, N.J.-based Johnson & Johnson views changes to the standard request for proposals form as one of the committee's top concerns.

"The committee's priorities haven't changed," she said. "We're moving forward with revitalizing the RFP.