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. E-RFP technology has remained relatively static over the past decade, but changes in the meetings industry and the corporate environment have had a profound effect on the number of planners sourcing their meetings online.
At this point, only about 15 percent of all meetings are 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. “It seems these days that virtually every hotel Web site, whether part of a brand or not, has some mechanism for having someone communicate with them electronically on a meeting request.”
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. “Today's corporate environments require meeting planners to ‘do more with less,’ and e-RFPs are an effective way to work more efficiently,” says Jonathan Davidson, project manager of travel and meetings for Seattle-based Starbucks Coffee Co. “Since e-RFPs automate many steps in the sourcing process, planners can invite more properties to bid on a program without adding to their workload.”
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.
As head of procurement for Extreme Networks, a high-tech switch manufacturer based in Santa Clara, Calif., Nancy Garner led the charge into online meeting management three years ago. Now, with 15 percent in cost avoidance under her belt, Garner credits electronic sourcing as key. “It saved a lot of time for our planners who were setting up meetings in another city or country,” she says.
Terri Carlton, manager of meeting services and corporate travel for Chicago-based BlueCross BlueShield Association, is working to build meeting-policy compliance into her sourcing tools. The organization must strictly avoid gaming destinations, she says, and controls over the bidding process are an integral part of ensuring that meetings are compliant.
We Still Have to Talk
Despite the benefits that electronic bidding tools bring, both hoteliers and planners say there are 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. It doesn't allow us to 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 meeting planners is that it's all about response time — the quicker the better,” Montgomery says. But a little communication with potential clients could go a long way, she says. Even a simple online instant messenger function allowing them to clarify points of an RFP would help hoteliers to streamline the bid process.
Observers agree that buyers, too, are better off retaining a human touch in site selection. “E-RFPs can be extremely effective if they are used to expedite the communication flow and to document all relevant data; however, the buyer and seller still need to utilize additional communication methods to maintain their relationship,” says Starbucks' Davidson.
The technology does not negotiate your deal, agrees Rodman Marymor, CEO of Berkeley, Calif.-based meetings technology consulting firm Cardinal Communications, and planners still have to pick up the phone at some point and negotiate directly with the hotel.
Help! Standards Needed
Another challenge in the current state of 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 growing number and assortment of e-RFPs, says Carol Lynch, vice president of groupsales 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 amount of volume we have.”
The variety of e-RFP templates and tools has also made them less effective, because the industry lacks a standard that hotels can use to 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 on the e-RFP horizon 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 companies define where an e-RFP will be sent, and help aggregate the responses. The potential problem arises when a third party accepts payment from properties as well as 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 — and if in-house space is considered first.
For RFP facilitators with searchable venue databases, another challenge is ensuring the inventory is up-to-date. “It's such an arduous process to keep data current,” says Jo Ann Baynes, president of Reston, Va.-based electronic lead facilitator Uversa International Inc. “We started out being a conduit for hotels to be able to send information to their clients; we're now also a quality-control mechanism.”
Bringing Back Humans
Within the next five years, e-RFP tools will evolve again, observers say. The process of sourcing small meetings will trend away from sending e-RFPs to a broad 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.
Lynch says small meetings are ideal for direct online booking, and StarCite has appropriated an entire division to small meetings management using its EasyBook online booking tool.
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., in August to add a layer of human management onto the e-RFP process. Events registered with the company's DirectMeetings tool can be sent at no cost to HelmsBriscoe for the bidding process. HelmsBriscoe sends out the e-RFPs and promises an availability grid of appropriate hotels within 24 hours.
The DirectMeetings tool didn't lack any capabilities, says GetThere product manager Jeremy Stubbs, but the company found that customers appreciated a more personal process. Novice planners especially feel more comfortable talking to an agent rather than being constrained to an automated system.
HelmsBriscoe's vice president of corporate development Jason Johnson says a consultative approach can also save an organization time and money. An agent has greater flexibility to adjust dates and destinations to save on costs. “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 trend toward more person-to-person 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, which 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.”
If hoteliers and buyers can agree on a format, the process will be vastly simplified. 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 very 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.
However, 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 utility it had. They were asking for too much,” he says. “Pretty soon all you're doing is filling out forms.”
BE PROLIFIC — Planners should consider what audience their e-RFP is reaching. Your RFP 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 or that they are infallible. Double-check your 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 potential properties, and 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, and your procurement department, will appreciate it.
BE ‘TRENDY’ — Don't sit on the data. Start building a history, says Bob Bennett, senior vice president, supplier market, for Philadelphia-based StarCite Inc. Electronic 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