In just 11 years, electronic requests for proposal have grown from novelty features on hoteliers' Web sites to an entire subindustry with hundreds of facilitators, templates, and tools. The technology for e-RFPs has remained relatively static over the past decade, but changes in the meetings industry and business environment have had a profound effect on the number of planners sourcing their meetings online.
Only about 15 percent of all meetings are now sourced electronically, experts say, but that figure is growing fast. “Over time, we're going to hit that 40 percent or 50 percent rate,” says Bob Bennett, senior vice president, supplier market, for Philadelphia-based StarCite, which offers e-RFP services among its online meeting-management tools.
Gen X and Strategic Planning
A number of factors are driving the growth of e-RFPs. “Demographics have a lot to do with it,” says Bennett. “Generation X has been brought up with the Internet as a tool that they want to use and choose to communicate with.” The new generation of meeting planners is comfortable flirting with properties through e-mail before setting a date for serious negotiations.
Even more important is the promise of increased productivity. Meeting planners are being asked to do more with less, and the hope is that e-RFPs are an effective way to work more efficiently because they automate many steps in the sourcing process, allowing planners to invite more properties to bid on a program.
The use of e-RFPs is often one of the first steps of a strategic meeting planning initiative and, when deployed effectively, can help to demonstrate the value of the initiative — and the meeting professional.
We Still Have to Talk
Despite the benefits of electronic bidding tools, there are still challenges. One of the biggest is the potential for damaging the relationships between buyer and seller. “[An e-RFP] doesn't allow us any contact with the potential client. We can't negotiate or qualify further what the needs of the client are. We're solely dependent on the information that comes through the e-RFP,” says Linda Montgomery, director of sales for Crowne Plaza Atlanta Airport Hotel.
“What we've gleaned from planners is that it's all about response time — the quicker the better,” says Montgomery. But a little communication could go a long way, she says. Even a simple online instant messaging function allowing them to clarify points of an RFP would help streamline the bid process.
Buyers, too, may be better off retaining a human touch in site selection. While e-RFPs can be great for expediting the communication flow and documenting relevant data, the buyer and seller still need to maintain their relationships through other means. As Rodman Marymor, CEO of Berkeley, Calif.-based meetings technology consulting firm Cardinal Communications, says, the technology does not negotiate your deal. Planners still have to pick up the phone at some point.
Help! Standards Needed
Another challenge with e-RFPs is their overwhelming volume and variety. Hoteliers are enthusiastic at the prospect of more sales leads but have had to redistribute resources to address the deluge of e-RFPs, says Carol Lynch, vice president of group global sales for Starwood Hotels & Resorts. “So many times you think the technology is going to save the day,” but, says Lynch, that has meant modifying Starwood's processes. “It has changed the way we deploy, the way that we look at our customer base, and the volume we have.”
The variety of templates and tools has also made e-RFPs less effective. The lack of a standard means hotels cannot streamline the hundreds of requests they receive each week, says Dale Beckles, president and CEO of Toronto-based meetings tech provider Arcaneo. Hoteliers often don't respond to unfamiliar e-RFP formats.
One more problem is a mounting ethical dilemma about how third-party RFP facilitators earn their revenues. Third-party facilitators often maintain an online database of meeting properties, help organizations define where an e-RFP will be sent, and help aggregate the responses. The problem arises when a third party accepts payment from both properties and buyers, says Arcaneo's Beckles. Buyers may want to question who their e-RFPs are reaching, and if their meetings-management tool is putting all properties on equal footing — or if preferred suppliers are considered first. For RFP facilitators with searchable venue databases, another challenge is ensuring the inventory is up to date.
Bringing Back Humans
Within the next five years, e-RFP tools will continue to evolve, observers say. The process of sourcing small meetings will trend away from sending e-RFPs to an array of properties and toward direct online booking. Neither planners nor hoteliers want to spend a lot of time processing involved RFP forms for simple day meetings.
Large or high-touch events will likely continue to be sourced through the e-RFP process, but observers see a move toward bringing back the human touch, with more communication among customers, facilitators, and hotels.
One company moving in that direction is Sabre-owned GetThere, Southlake, Texas. It partnered with HelmsBriscoe, Scottsdale, Ariz., a site selection company, in August to add a layer of human management to the e-RFP process. Events registered with GetThere's DirectMeetings Tool can be sent at no cost to HelmsBriscoe's agents for the bidding process. HelmsBriscoe sends out the e-RFPs and promises an availability grid of appropriate hotels within 24 hours. GetThere product manager Jeremy Stubbs says the company found that customers appreciated a more personal process.
HelmsBriscoe's vice president of corporate development, Jason Johnson, says a consultative approach can save an organization time and money. An agent has more flexibility to adjust dates and destinations to save money. “Now that it's a seller's market,” adds Stubbs, “I have to convince a property that they want this meeting. Being constrained to an electronic format, you may not be as successful.”
E-RFPs may involve more personal communication in the coming years, but they're not going away. One of the biggest issues for the industry is agreeing on a standard format that will allow planners to provide comprehensive information about their meetings and hotels to be more efficient in their responses.
StarCite, for one, is aggressively developing its back-end supplier response center capabilities. “We want to have all of that lead activity standardized and organized in a consistent manner,” Bennett says, “and then give the hotels the ability to manage and respond online.”
The Convention Industry Council's Accepted Practices Exchange initiative has been working for a number of years on developing just such RFP standards (as well as standards for event specifications, registration forms, and other meeting documents). The templates are available on the CIC Web site.
The APEX vision goes beyond getting the industry to agree on the elements and format of an RFP to building the electronic documents that can pass between planner and supplier, eliminating re-keying and adding real efficiencies.
E-RFPs: How to Get a Better Response
Two out of three electronic requests for proposal go unanswered when planners draft the documents themselves, experts say. An e-RFP that comes in a standard format through a familiar channel will be addressed first, while mystery leads that take more attention will be addressed later — or not at all. Combine an overworked hotel sales staff with a seller's market, and meeting planners are even less likely to get adequate offers for their business.
If you choose to develop your own e-RFP template, here are some tips on how to get a response accurately and quickly.
BE SPECIFIC — The more information you can give to the hotels, the better the response will be. “If you send an RFP to a hotel that doesn't know who you are or how much business you have in their city, then they're likely to ignore it or just give you the standard rate,” says Jo Ann Baynes, president of Reston, Va.-based Uversa International Inc. Planners should specify how many hotels they will select for the event and what concessions (such as free Internet or room upgrades) are most important to them, she says.
But information overload can also sink a strategic bid process, says Rodman Marymor, CEO of Berkeley, Calif.-based Cardinal Communications. Hoteliers discovered this developing their own e-RFP forms. “The more complex the form became, the less useful it was. They were asking for too much,” he says. “Pretty soon all you're doing is filling out forms.”
BE ALL THINGS TO ALL PEOPLE — Planners should consider what audience their e-RFP is reaching. Your process should allow you to send event leads to a multitude of facilities, independent hotels, and conference centers, and include an organization's in-house space that could be used for the event, says Dale Beckles, president of Toronto-based Arcaneo.
BE PRECISE — Don't assume that the hotel sales staff is familiar with the format of your e-RFP. Double-check the hotels' bids to make sure that properties haven't left anything out.
BE COMMUNICATIVE — Hoteliers' biggest frustrations with e-RFPs are the limitations the format puts on them and the inability to speak directly with potential customers. Use an e-RFP process to narrow your selection of properties, then pick up the phone.
BE CONSISTENT — Standardization is the key to comparable data. Once you find a successful template or format for your organization, stick with it, say experts. Your hotel partners will appreciate it.
BE “TRENDY” — Start building a history, says Bob Bennett, senior vice president, supplier market, for Philadelphia-based StarCite Inc. E-RFPs are a cornerstone of. Collect data on the leads you send out, the response time, the destination, and the changes you made. Then analyze the data for trends you can use to build your RFPs — and your budget — in the future.
Where to Find Help
You don't have to start from scratch when developing an e-RFP template. Here are sites with industry-accepted RFP templates:
Convention Industry Council
Accepted Practices Exchange initiative (APEX)
National Business Travel Association
Groups and Meetings Committee
Meetings technology consultant