A TIME OF OPTIONS
If what will you do with your hotel programme has been on your mind then stop, take a step off the hotel RFP bandwagon, catch your breath and work out what’s next, as the regular summer RFP season is fast approaching…
In my last blog I talked about the importance of knowing your needs, drivers and the market before you decide what to do about sourcing and contracting for future years.
But what should you do once you’ve understood that – should you still go down the traditional RFP route or are new options open to you?
The answer in short is that there are several options and different approaches which have emerged due to market and technological developments. Ultimately, what works best is as much about what suits your cultural and commercial needs.
By stating just some of the obvious pros and cons you might quickly see an option that suits the structure and needs of your organisation or, even more likely, an option that DOESN’T fit.
a. Business As Usual
Perhaps you should go to RFP as usual? This best suits travel programmes and companies that have a repeatable, well-oiled RFP process in place and who’s needs from the exercise in part 1 remain relatively unchanged. It won’t bring you any surprises, but it will ensure you have a clear selection of properties to offer your clients.
The Pros: traditional, safe/low risk, not wanting, or having the time and capacity to test the waters of something new or different.
The Cons: time and labour intensive, need to ensure it fits new needs, fulfilment needs auditing if you have guaranteed room nights and means that there’s likely to be inventory out there that could entice people off programme.
b. The Extension
You might “only” want to extend your current rates for now if you have not yet finished the exercise I talked about in part 1 yet, and just want to buy yourself some more time to decide what to do next.
The Pros: should be a quick exercise, low labour and time investment.
The Cons: possibly missing out on better deals/rates, unsure when to extend rates to, short term fix only to buy time.
c. Discounted Rates
It could be that you decide to move to a discount off BAR, Best Available Rate, when you roughly know your future needs. You might feel this is a safe option if you are not yet sure about changes in the market and new entrants.
The Pros: less time consuming to negotiate and contract, gives a wide coverage if chain wide, blanket approach, a simple to communicate and implement policy.
The Cons: more suitable for chains and not independent accommodation or other possible needs like day rooms, apartments, etc. (unless you use a content provider/hotel booking agency which offers these discounts through their channel), may not give the choice needed by all travellers.
d. Hybrid Cap’n BAR
If you already know your needs and drivers, you might feel comfortable and confident to go for the Hybrid Cap’n BAR. This might be the option for you to choose if you have a lot of bookings going into your top destinations instead of a scattered room night production and you would like to move away from the time and labour intensive traditional RFPs.
The Pros: less time intensive than a full RFP, as only top destinations should be targeted for smaller RFPs to negotiate capped rates, with a discount off BAR when rates are below and for “long tail” or the rest of the chain of properties.
The Cons: could feel risky? Hard to audit to ensure the best rate was always achieved, more suitable for chains and larger locations which might not meet your travel pattern.
e. Use the re-shop tools
If you are open to expand hotel options in order to reduce costs and in addition are flexible to adjust amenities for an additional increase in cost savings, this might be an option you want to consider.
The Pros: aim is to reduce cost, supplement traditional RFP through a re-shop tool.
The Cons: potentially a challenge to find a re-shop tool and service that fits your programme and policies, possibly content and time consuming for teams or people to manage.
Of course, in a dynamically changing market, with lots of new drivers like sustainability, new accommodation content types, new demands and developing technology, there might be more options or a combination of options that suit your accommodation needs and current situation. If you’re catering to a new need in hotel sourcing and/or see something we don’t, we’d love to hear from you at firstname.lastname@example.org.
Written by Sandra Deregoski, FESTIVE ROAD, UK