Travel tech firm Lanyon has launched a Hotel Spend Management ROI (return on investment) Calculator that it claims “enables companies to easily compute their own expected annual return based on their current travel costs, time spent on each RFP and number of RFPs processed”.
MEETINGS AND HOTEL RFPs: A HELP OR A HINDRANCE?
MOST EXPERTS BELIEVE that a company’s meetings business requires its own RFP. That, however, does not mean that an organisation’s meetings business should be ignored when conducting the transient-stay RFP. Some companies include their
off-the-shelf meetings (regular meetings for a small number) in their transient bids, according to CWT’s Pauline Houston and Capita’s Trevor Elswood. Elswood points out that properties near a company’s offices, where internal corporate travellers often stay, can also be good places for overflow meetings, “the meetings with less than ten attendees that would have been held internally, had there been the space”. A preferred hotel for corporate transient accommodation might not be the right property for a meeting, which has different requirements, such as break-out rooms, according to Maritim’s Mark Spivey, who also warns that group volumes do not necessarily equate to lower room rates. “Some people think the group business rate should be the same as the corporate rate, but the event might want 200 rooms in a 300-room property for one night,” he says, “which means the hotel will be empty the night before and the night after. There is also the risk of cancellations. The rate would have to be adjusted to take this into account.”
46 BBT JULY/AUGUST 2014
As with all procurement, the key to hotel room purchasing is to look to buy what is fit for purpose
increasingly being used in competitive cities. Andreopoulos says: “We cannot underestimate the power of market share. If a company can genuinely shift share into our hotels, they will have a strong position during the RFP process.” Elswood says that the variations are
increasing all the time. “I’ve seen a mar- ginal swing to more hybrid agreements including a discount of 10 per cent off BAR at certain locations, but 5 per cent at group level.” Pauline Houston points out that market
share can also be a driver in cities with surplus capacity. She says: “Sometimes it’s a trade-off. For a corporation to get an attractive rate in a location where demand is high, they may add a hotel that isn’t necessarily heavily demanded as a trade- off for a hotel the corporate really wants.” And, as many companies have travellers of different seniority levels, the use of dif- ferent grades of property in the same city is not unusual. As with all procurement, the key to hotel
room purchasing is to look to buy what is fit for purpose. Elswood says it is always cheaper to pre-purchase breakfast, but that it is important to know whether your travellers want to eat breakfast. As An- dreopoulos says: “There have been many occasions when a company has actually saved money by taking breakfast out of their rates and, system-wide, moving to room-only rates. There are also examples
BUYINGBUSINESSTRAVEL.COM
where the opposite is true. Either way, it’s worth experimenting to see how many travellers take breakfast. You’d be surprised how many people get by on just a cup of coffee in the mornings...” Another variable is the length of the
agreement. The hotel RFP season starts in July-September so that responses, deci- sions and contracts can happen before the next calendar year. But some RFPs run on a financial year, some want only six months, and some will want two years to lock-in rates and availability, a tactic that was seen in London at the time of the Olympic Games in 2012. Ian McBride says popular e-RFP tech-
nology can mean that a corporate is fitting into an existing RFP process rather than having the RFP process fitted to them. “Think of a hotel as a cart and the client as a horse,” he says. “First and foremost, you need a deep understanding of the horse before you know what kind of cart it needs fitting to.”
Hoteliers looking for a stress-free summer should take note.
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