The RFP Explosion

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It was a paradox when, during the depths of the economic downturn in 2009 as meetings business was dropping off rapidly, the number of requests for proposal coming to InterContinental Hotels Group was increasing dramatically, says Stephen Powell, senior vice president, worldwide sales, at IHG in Atlanta. Fewer meetings were being sourced, but electronic RFPs were exploding.

Only five years ago, around 15 percent of all leads came through electronic means. Now, according to interviews with hoteliers, e-RFPs represent the majority of leads. And since meetings business has begun to pick up, the volume of RFPs coming into hotels has rocketed even higher. Technology and the proliferation of third-party RFP and sourcing sites have made it fast and easy for planners to send their meeting specs to multiple properties with the press of a key.

But with that progress come challenges. Hoteliers find themselves struggling to respond to the volume of RFPs, while planners lament the lack of timeliness and accuracy in responses. And what of the planner/supplier relationship? Do e-RFPs make the process more transactional?

Love them or lament them, e-RFPs have changed the booking landscape. That means, says, Michael Dominguez, vice president, global sales, for Loews Hotels and Resorts in New York, “you need to learn the new rules of engagement.”

Too Many to Handle?

Association Meetings tackled the issue in a recent MeetingsNet webinar, “Bridging the Gap on RFPs: Best Practices for Meeting Planners and Suppliers,” during which hoteliers said their primary concern is keeping up with the volume.

“We are seeing a significant increase in RFP volume,” said presenter Rodahl Leong-Lyons, vice president of sales operations, Hyatt Hotels and Resorts in Chicago. “Timely and complete responses are a challenge to maintain.”

IHG’s Powell agrees. “I don’t think we could ever hire enough people to keep up with the lead traffic we get,” he says. On any given day, sales managers’ inboxes are filled with RFPs, which makes it difficult to review and respond thoroughly and quickly to every proposal that comes in from all channels. Those channels include chains’ own Web sites and national sales offices, plus third-party sourcing sites, site-selection companies, and hotel rep firms. As a consequence, customers get frustrated with incomplete responses, immediate turndowns, or no response at all.

Yet, hotels are adapting. At Hyatt, explained Leong-Lyons, properties have designated lead managers who deploy leads to the right people to get them answered as quickly as possible. The leads are set up to go directly to the salespeople who handle that market segment or territory. “There’s a catcher as soon as you hit submit on the planner side.”

Hyatt has mandated a two-business-hour response time for all RFPs. “We do customer advisory boards and we watch the way our bookings transact. The window of time that many of our customers have has shrunk considerably,” she said. “Many require at least basic availability information immediately.” The mandate doesn’t mean the RFP must be completed in two hours, but Hyatt must at least respond to say the RFP has been received, or to ask for more information if needed.

Next Page: Where Your RFP Goes; RFP Etiquette; Best Practices for RFPs

Previous Page: Too Many RFPs to Handle?

Where Your RFP Goes

IHG has a similar two-hour response policy for most brands, and has improved its response rate to about 95 percent. The key has been hiring more people, restructuring how RFPs are handled, and introducing technology that funnels leads to the proper channels within IHG.

IHG puts leads into three categories, says Powell. Level-one leads are from loyal customers who regularly book business with IHG. These leads go directly to key account directors and the most experienced salespeople for response. Level-two customers are those that IHG has worked with in the past, but who are not as frequent bookers as level-one customers. RFPs from this group go to a dedicated account manager

at a group sales office within the region. Level-three customers are new customers or those whom IHG has worked with infrequently. These RFPs are handled by available representatives at the group sales office.

An oversight team looks out for missed leads, and routes them to the proper channels. “We deploy the appropriate resource according to the return that we can get within that account,” says Powell. The ones that fall through the cracks are RFPs with insufficient data, where IHG can’t reach the sender to get more information.

RFP Etiquette

“Although it is easy to send out leads to 68 hotels, is that really what you want to do?” asks Powell.

What is the proper RFP etiquette? It’s critical for planners to get multiple offers to find the best fit, but how many is too many? Those were the questions posed by MeetingsNet webinar moderator Bharet Malhotra, vice president of sales at Cvent, a webinar sponsor. Cvent offers a free, online database where planners can search more than 170,000 meeting venues and send e-RFPs.

Panelist Rhea Stagner, vice president, industry relations and sourcing, Maritz Travel Co., St. Louis, said planners should be targeting their RFPs better. “You don’t want to start by throwing out a huge net,” she said. First, it’s a lot to weed through and manage. Second, sending an RFP to a handful of global sales offices and including 15 hotels per chain could discourage hotels from responding. “They may answer it quickly or they may say, ‘We’re one of 50. Do we really have a shot?’” The key to narrowing the search is to gather as much information as possible about the meeting beforehand, she said.

Brad Weaber, executive vice president, event services at SmithBucklin, concurs. “We try to limit the volume before we send it out,” he says. “For my team, it’s a requirement that they go through the process of asking clients a lot of questions.” If they get a request to source a meeting “west of the Mississippi,” for example, they’ll ask the client about budgets, objectives, airlift/accessibility, dates, hotel location, type of hotel, as well as other criteria. In the case of associations, they have to consider the total cost of the destination for attendees. The next step is to ask which factors are most important to the client.

“If we spend more time on the front end asking these questions, it saves time on the back end because you are not sending RFPs to hotels that are not the best for the meeting,” said panelist Karen Springfield, senior meeting planner, team lead at MetLife, Boston.

POTENTIAL SOLUTION

IHG’s Stephen Powell has pitched an idea that he believes could help limit the number of online RFPs getting sent to hotels. He recom

mends that third-party providers include a number at the top of each RFP that shows the total number of properties receiving the RFP. Some hotels, seeing that an RFP has gone out to 68 properties, might choose to sit it out. And that, in turn, could encourage planners to limit their RFPs because they won’t be getting as many responses back.

So What Do Planners Want?

Many planners say their biggest challenge is getting responses within their requested time frame and with the requested information.

At a minimum, they want the basics—availability, rates, and space. Specifics are also critical. Springfield, for example, asks to see how the space is mapped out.

Planners should always note the program’s top priorities in the RFP. If you need natural light in the meeting space or column-free ballrooms or a 24-hour hold on meetings rooms, be explicit about that in your RFP, says Jennifer Johnson, owner, Johnson Meetings Group in Atlanta, who spoke at Destination Marketing Association International’s EmpowerMINT.com webinar recently.

Prioritizing meeting needs definitely helps, says Leong-Lyons. “What are the top four things that have to be absolutely flawless with this event?” Flexibility helps, too, adds Dominguez, especially now that occupancy rates are rising. “Sometimes a one-day shift can make all the difference.”

Please Respond—but Don’t Call

At the same time, Weaber notes, “If we say this date is firm and we cannot be flexible, we are not looking for you to come back with [different dates].” If proposals are incomplete, SmithBucklin has a quality-control person reach out to bidders.

Planners differ on the subject of follow-ups. About half of the RFPs that Hyatt gets, says Leong-Lyons, say, “Do not call,” while one-third say “Do not call or e-mail.” Panelist Irene Fisher, events manager, ITPG, Washington, D.C., explained that she doesn’t have time for calls and asks hotels to e-mail any questions.

“Sometimes salespeople want to sell on the RFP and that’s not what the planner is asking for. They are asking for basic information so they can get down to the short list,” says Dominguez, who advises hotels to give them what they need without expanding on it. “Once you get to that short list you’ll be able to have another conversation and look at things in more detail.”

That’s how many planners see it. The verbal communication between planners and suppliers really begins once the planner gets down to the finalists, according to planner Springfield. “That’s when I get into concession conversations or what value-add they can offer.”

That’s also where negotiations start and contract language comes into the process, adds Carlee Duncan, CMP, meeting and events manager, American Academy of Ophthalmology, San Francisco.

Next Page: RFP Forms; Still about Relationships?; Sourcing through CVBs

Previous Page: Where Your RFP Goes; RFP Etiquette; Best Practices for RFPs

RFP Forms

Planners have their own RFP forms, as do hotels and third-party sourcing sites. There is also the Convention Industry Council’s APEX (Accepted Practices Exchange) standard 13-page form. Which one is the right one?

For Dominguez, the answer is simple. “If you really want to listen to the customer, you have to do things the way they want you to,” he says, which means using their forms and attachments.

Duncan doesn’t mind if hoteliers use their own RFPs, but she does mind if those RFPs are incomplete. “Their forms are fine as long as they answer all the questions.”

Springfield uses third-party sites, but attaches her own RFP form. She finds it is the best way to elicit the specific information she needs.

To make sure that RFPs include what you need, IHG’s Powell suggests using asterisks to indicate required fields. (So when hotels fill out third-party RFPs, there would be certain questions denoted by asterisks that must be answered or the proposal can’t be submitted.)

Still about Relationships?

With the RFP process moving online, some wonder if relationships still matter. “If you are waiting for the lead to try and build the relationship, you’re too late,” says Dominguez. He sees the e-RFP revolution putting an even greater importance on building relationships with customers before they send an RFP. That means attending industry shows and meeting with clients. “How we build the relationship and when we build the relationship has changed.” When one does have that solid relationship with a client, then maybe it is OK to make that follow-up call on an RFP, he adds. It also helps in knowing the customer. Knowing where they meet and what types of destinations they like is intelligence that can inform the decision to submit a proposal.

In Weaber’s view, “Technology is not a tool to replace discussions around the nuances of the meeting. It’s the initial tool to vet the opportunity.” The key is to build an RFP strategy, says James Schultenover, president, Krisam Group, a sales representation company for independent hotels. “If an organization has a good strategy then it’s seamless—the technology question doesn’t even really exist,” he says. “If they don’t and it’s just a transaction, they are going to be treated like a transaction.”

So where do we go from here?

“I think we are at a tipping point,” says Powell. He believes the “hockey stick growth” in RFPs that we have seen will plateau as the industry learns the new rules of engagement. That, in turn, will mean better conversion rates for hotels, more complete proposals for planners, and better performance for all.