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?
and its sister publications 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.
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. 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.
IHG also has a two-hour response policy for most brands. It has improved the response rate to about 95 percent by hiring more people, restructuring how RFPs are handled, and introducing technology to funnel leads to the proper channels.
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 target their RFPs. “You don't want to start by throwing out a huge net,” she said.
First, it's a lot to weed through and manage, she noted. 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?’”
Brad Weaber, executive vice president of event services at the association management company 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, as well as other criteria. In the case of associations and other nonprofit organizations, they have to consider the total cost of the destination for attendees, Weaber says. 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.
Please Respond — But Don't Call
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 meeting 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 create an effective RFP, agrees Hyatt's Leong-Lyons. “What are the top four things that have to be absolutely flawless with this event?” Flexibility helps, too, especially now that occupancy rates are rising. Sometimes a one-day shift can make all the difference for a win-win scenario.
Planners differ on the subject of follow-ups. About half of the RFPs that Hyatt gets, according to Leong-Lyons, say, “Do not call,” while one-third say “Do not call or e-mail.” The fact is that many planners don't have time for a phone call and they ask 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.”.
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.”
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 build the relationship, you're too late,” says Dominguez. He sees the e-RFP revolution putting 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.
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.
Get dollar values on all concessions or value-adds to make an apples-to-apples RFP comparison, says Jennifer Johnson, Johnson Meetings Group, Atlanta, Ga. “Whether they are giving you complimentary upgrades, Internet access, or discounted staff rooms, they need to put a monetary value on each so you are not miscalculating.” Johnson then creates a spreadsheet and compares the proposals side by side, including rates, food and beverage, and logistical needs and wants.
Responding quickly to RFPs is critical, says Michael Dominguez of Loews Hotels, because the property that gets back to the customer first often ends up booking the business.
Three to four cities and three to four hotels per city is a reasonable number of RFPs for most programs. Larger meetings or citywides require more proposals.
Sourcing Through CVBs
“I prefer to work with the CVBs as the means by which my RFP's are submitted, says Sandy Milis, meeting planner for the Evangelical Presbyterian Church, Livonia, Mich. “This has benefited our organization immensely. For example, through the CVB I found out about an incentive Memphis was offering to groups for the year we were booked there. Had I dealt directly with the hotels or sent e-RFP's , chances are I wouldn't have found out about this great incentive.”
That's a view shared by Carlee Duncan, CMP, meeting and events manager, American Academy of Ophthalmology, San Francisco. “If I'm in a city I don't know much about, it's great to make that contact and get a sense of what the city has to offer. CVBs are a great, unbiased wealth of knowledge.”
CVBs can gather responses and aggregate the germane information in a grid so that planners can easily make an apples-to-apples comparison of hotels. They can also share their local knowledge, such as what else is going on at the time of the meeting that could have an impact, or which hotels might be the best geographic or logistical fit based on the needs of the planner. Services are free to planners, paid for by local tax dollars and/or membership fees.
Destination Marketing Association International offers planners a one-stop online resource, EmpowerMINT.com, where they can send proposals out to multiple CVBs to get responses from hotels in a variety of destinations. Learn more at empowermint.com.