Despite the challenges in aggregating complete group inventory information, many hotel chains and third-party facilitators have rolled out electronic RFP tools for groups and held out promises of even faster booking alternatives coming soon.
Since the complexities of event specifications can delay replies to a request for proposals, these e-tools can result in cost reductions of 30 percent to 40 percent over traditional phone and fax processes, said meetings technology consultant Corbin Ball.
Another technological development leading to quicker responses for meetings RFPs has been the ability for third-party facilitators to aggregate meetings inventory online, including room blocks or meeting rooms. While such meetings- specific providers as StarCite for years have worked to build online marketplaces, now transient hotel content distributors--the "plumbing" behind transient sourcing tools--are adding meetings content to their systems. With more content available online from a single provider, meeting buyers can "one stop shop" instead of using individual hotel tools.
Hotel distribution provider Pegasus Solutions in September signed a deal with StarCite to link the Pegasus portfolio of 78,000 properties to StarCite's sourcing tools. The deal helps Pegasus break into group content through nontraditional distribution channels, said Quentin Moores, Pegasus senior director of distribution solutions. The StarCite deal is just one of many possible channels Pegasus will use to distribute its hotel clients' group content, he said.
"Pegasus' strength has always been in the transient bookings space. In order to add value to our suppliers, it is essential for us to continue to look for new distribution channels," Moores said. "This is one of a number of distribution channels that Pegasus has taken an interest in and [we] want to achieve a broader distribution funnel for our suppliers beyond the traditional transient leisure and corporate bookings. It's a logical fit."
[PULL_1]Hyatt partners with StarCite to offer "real time" responses to RFPs. The "E-mmediate Response" is applicable for events of all sizes, but buyers need to use the standard online template provided by the chain. Hilton's "E-vents" program, launched in 2006, avoids the RFP process altogether with a direct-booking program aimed at small meetings with up to 25 rooms in the block.
"[RFP response times] are extremely important. There's a lot of competition out there, especially over the last few years, with even being able to get meeting space, so usually you are sourcing more than once or twice," said Betsy Bondurant of Bondurant Consulting, formerly associate director of meetings and trade shows for pharmaceutical giant Amgen. "The sooner you can find out if your preferred hotel isn't available, the sooner you can go out and continue looking."
Meeting buyers are competing for what sometimes seems to be "the same 20 percent of hotels," Bondurant said, as such top-tier meeting destinations as New York, Chicago or Boston quickly fill up. A quick response time becomes even more important in these cities.
Amgen used StarCite to distribute its RFPs, and Bondurant said response times usually were within 48 hours. While some hoteliers promise a faster turnaround through their own electronic templates, Bondurant said she has heard from planners that such tools are better used to gain a general idea of availability, as booking through an RFP hotel template is difficult and often not worth the trouble. "You still have to go through a manual process," Bondurant said.
In comparison, when planners use a chain's national sales office, RFP response time is usually dependable, but not as rapid as an electronic template.
"In my office, we send all RFPs to our national reps; we don't do any posting of them online," said Julie Johnson, director of events and incentives for Lennox Worldwide Heating & Cooling. "Our response time is very good--usually within a few days but we also usually give them a week to get back to us."
Hotel online RFP tools are meeting a market need, suggested Advito's Odom, but not the entire market. "It's not the panacea, but it is a good alternative," he said. "It doesn't work for everything."
For companies that send their own online RFPs without a hotel template, the process can create both problems and efficiencies. A quick response to a proposal may only include "rates, dates and space," without addressing many of the complexities and needs of a particular event, said meetings industry consultant Joan Eisenstodt of Eisenstodt Associates. Hammering out the final agreement can take weeks. In addition, online RFP tools have increased the number of requests sent to properties, creating delays while properties sort out which ones are viable. An estimated two out of three electronic RFPs go completely unanswered, and the likelihood of a response drops if a corporation uses an unfamiliar format for its request.[PULL_2]Even where technology speeds the RFP process, high occupancy rates around the country--especially in cities that are top meetings destinations-continue to make delays a problem for meeting buyers.
"In the old days it used to be phone calls, then it was blast faxes, and now there is email and now you can even get in and see some hotels' inventory online," Odom explained. "So technology is assisting, but because the occupancies are higher and because some corporations don't have flexibility on their dates, that makes it difficult because now you have extra work to find a match. Lead times are not lengthening, and people are watching their budgets more closely."
More hotels also now are finding that their corporate contact for negotiations on meetings and events is not the final buyer, and that purchasing managers must approve the contract after negotiations between the property sales representative and the planner are concluded. If procurement views meetings as a commodity or assumes event bidding can apply a standard template used for other purchases, planners and hoteliers may have to halt negotiations to bring procurement up to speed.
Procurement departments that haven't built close relationships with their corporate meeting departments often don't understand how meetings RFPs differ from transient contracts, said Shelly Russ, director of event management services for the Institute of Electrical and Electronics Engineers. A new management structure at IEEE requires procurement to approve hotel bids for conferences and meetings, but that step adds more than a week to negotiations, she said.
"Procurement will come in after three weeks of negotiations with the hotel. We have to submit the bid to them and procurement says they have a five-day turnaround, which usually means five to eight days. They want to use a template but they don't understand the complexities of meetings," Russ said.
The idea behind using standardized templates for meetings RFPs is to create efficiencies. If executed properly, the process can reduce response times.
The Convention Industry Council has embraced a procurement-driven strategy in its Accepted Practices Exchange (Apex) initiative. The meetings industry association has published seven standard templates for use with audio/visual providers, destination management companies, hotels, transportation providers and other vendors.
Procurement departments seeking to reduce or eliminate delays on their meetings RFPs also could consider a third-party facilitator, Odom said, and there are many corporations doing a "great job" internally of streamlining their meetings procurement process.
"It's more fundamental of making sure the specs are firmed up before you go out, trying to have enough lead time and flexibility so that you can purchase the best thing at the lowest price," he said.