What will your travel program look like next year? What percentage of your employees are, or will be, comfortable traveling? How do you decide whether to grow or reduce the number of hotels in your program?
If you’ve been in the travel space in the last six months, you know the answers to these questions have been changing daily. When it comes to your 2021 Hotel RFP there’s one topic that keeps coming up: How do I optimize my 2021 travel program without kicking hotels when they’re down?
Partnership Travel Consulting (PTC) cast an All-Star group of travel buyers to share some thoughts and recommendations on how to handle sourcing for 2021, and the one thing the vast majority agreed upon was that an RFP is a necessity for their 2021 program.
Benefits of an RFP
Here’s why - the benefits of an RFP go far beyond negotiating rates. While an RFP can accomplish negotiations for your business, it also has many other benefits:
- An opportunity to receive updated health and safety information from hoteliers in our ever-changing environment.
- The ability to ask for new rate options (static vs dynamic) that meet the needs of your organization today.
- Potential to grow or narrow down your accepted hotels in an educated way based on changes in your business (looking at new locations, updating requested amenities, etc).
- Request updated seasonality rates and blackout dates from hotels.
- Post-RFP, the ability to upload all new rate types, amenities, seasonality, and date restrictions into GDS properties in order to audit rate accuracy upon upload, as well as proactively check availability throughout the year as the next 12-18 months continuously evolve.
That’s just the start, so let’s dive into both the data that was discussed during this webinar, as well as main discussion points from our panel of travel buyers from ADP, Anthem, Advito, and Tesla, who believe it’s important for everyone to optimize their 2021 Hotel RFP.
The Cvent Source
Janine Alsalam, Senior Director of Hospitality Cloud Sales at Cvent, unearthed some great data based on trends that we have seen this RFP Season thus far. Collectively, travel buyers who have already sourced their RFPs via Cvent Transient Sourcing (formerly Lanyon), have decreased the size of their hotel program by 17%, sourcing fewer hotels than 2020’s program. She mentioned seeing an increase in sourcing to mid-scale & economy style hotels and a reduced AWR (Average Weighted Rate) of 8% across all properties.
It is also important to note that 59 Questions have been added to the Cvent/Lanyon Hotel Profile to account for COVID Procedures and to give peace of mind to both the buyer and travelers. These fields have been added to save travel buyers time by not having to add additional custom questions and ultimately, provide reassurance as they mold their 2021 Hotel Program. Over 35,000 hotels have already filled in this pertinent information.
The average response rate for suppliers thus far has been close to 65%. Given the fact that many hotels are short-staffed, Janine saw this as a very positive rate that will only continue to grow as more RFPs are deployed. Janine finished by sharing that Cvent has confirmed with major hotel chains that regardless of the rate strategy (I.e. rollover or traditional negotiation), the most seamless process is for travel buyers to invite the hotels to their 2021 program as normal, and hotels will respond. In the case of rollover, that response will simply be the same rates as 2020. Further, Cvent has deployed resources to monitor RFP response and reach out to hotels in the event contacts have changed and they need support.
At the start of the webinar, we polled the audience to get a grasp on where everyone stood for this upcoming RFP Season. While there has been much confusion on what to do, an overwhelming 64% of attendees felt confident that they would still send an RFP, regardless of rollover or negotiation. 20% of the group was undecided, while 14% have decided to proceed manually this year.
Throughout, we learned that 48% of our attendees felt that COVID Procedures topped their priority list, while 27% still considered rates to be the determining factor, and 20% prioritized hotel flexibility. Locations took into account about 5% of the attendee's top priority and none of the attendees put amenities at the top of their list.
Lesley O’Bryan, Senior Vice President at Advito
- Safety is top of mind right now, so use this to build your traveler's confidence in your program by providing them with the COVID-related information from Cvent’s RFPs.
- Go to RFP for 2021, but tailor it to your company's needs focusing on top markets and getting rates that make sense for you (static vs dynamic).
- Make sure you frequently audit next year and don’t be afraid to make a change if hotels are not complying.
Deborah Ryan-Pelletier, Manager Global Hotel Program Strategic Sourcing at ADP
- It’s in everyone’s best interest to send out an RFP this year because of these several factors: Duty of Care, Data Capture, and COVID safety procedures from properties.
- The best way to optimize your program is to continue capturing data.
- Your hotel partners are important – if that means delaying your RFP release date or doing limited negotiations, it is important to maintain your relationships.
Steve Sitto, Sr. Manager Global Travel & Events at Tesla
- Travel programs are living and breathing, so instead of putting them on autopilot, it is always important to re-examine ways to improve.
- There’s a strong chance we will see programs that may need to expand throughout 2021 when travel picks up, so you may source a smaller number of hotels now to then add more throughout next year’s program cycle.
- Hotels will always look to recoup their losses, so even if we see 15-20% lower rates next year, you can expect that the hotels will fight to make that money back in the following years. Do what’s right for your business knowing this, but don’t go into it with the mindset to take advantage of hotels.
Cindy Heston, Travel & Events at Anthem
- The additional COVID-19 questions added into the RFP is a great way to provide consistency across all hotels.
- Since market demand is down, be a good partner to your hotels you have good relationships with.
- Duty of Care is a priority during this time – always knowing where your travelers are and decreasing the number of touchpoints a traveler takes to get from point A to point B is important.
It is no secret that the travel industry has been shaken up a bit in the wake of the pandemic. With that said, we are all in this together. Hotels are working hard to provide buyers with the tools they need to make this RFP Season as seamless as possible by completing their COVID Procedures and responding to your RFPs, regardless of rollover or negotiations.
We hope that by learning from the panelist and data shared above, the question is no longer whether or not to send your RFP, but rather how can you optimize your RFP that meets the needs of your hotel partners, your organization/clients, and your travelers.
Use the opportunity to RFP in order to centralize and accept hotels into your program, effectively audit and load rates into GDS, and track historical data for years to come. It is essential to a successful program.
RFP Season may look a bit different than before, but there is an opportunity here to mold your program into something different. A little change can be good, and along with the support from your Suppliers, NAMs, TMCs, and Industry peers, Cvent is here to support you every step of the way.