Conducting a Hotel RFP, once a routine albeit time-consuming exercise, has become more difficult in recent years. With hotels putting more roadblocks in your way, you can no longer revisit hotel sourcing annually and ignore it the rest of the year. Egencia has taken a close look at the effectiveness of hotel chainwide discounts. Today, we want to help travelers get the most out of their hotel sourcing program
Egencia Consulting Services has seen a number of hotel sourcing challenges arise for the companies we serve. Hotels are looking closely at their entire book of business and weighing corporate accounts against other rate types. In many cases, it is difficult to obtain rates with the hotels they have worked with for years.
One client’s experience was particularly instructive. A global client was conducting a Hotel RFP and included a Seattle property from which they had gotten preferred rates for the past five years. As the RFP advanced, the client was shocked to discover that the hotel had declined to bid on their account for the coming year. Further discussions with the hotel helped us determine why.
The client had been producing over 500 room nights at an ADR (average daily rate) 38% lower than other accounts of their size. When the hotel presented historical production reports, we found this client was only staying during peak season and during some of the city’s largest conventions.
It wasn’t that the hotel didn’t value these travelers or enjoy working with the travel manager, but that they were losing revenue by accepting this account in their program. The hotel was no longer in a position where they needed to work with an unfavorable account as they could fill those 500 room nights with guests paying higher rates.
The changing dynamics of the hotel industry have definitely had an impact on how Hotel RFPs are best conducted. As rates rise across all sectors, hotels are taking steps to limit their corporate business. For their part, companies need to take strong and proactive steps to get their business noticed.
To better understand how to make the Hotel RFP process more effective, read our whitepaper on Hotel RFP best practices.