When you’re considering a hotel for a business meeting, the RFP process can at times can seem like weird science. Many companies source hotels for meetings & events via eRFP (electronic Request for Proposal) software as well as through the use of email RFP processes specifically for simple and smaller meetings. Organizations are trying to increase the efficiency of the process via the use of these tools, to negotiate competitive rates, as well as to ensure that the venues have a detailed understanding of the objectives of the program. But once you receive the proposals, how do you know if you are getting a good deal? How does one measure and provide clarity around best in class rates?
What is the Group Hotel RFP all about?
Most effective Group Hotel RFPs will consider several key points such as: providing estimated dates of the event, key contact details, an overview of the event objectives, guest room requirements, meeting room requirements, audio visual requirements, location to nearby entertainment, etc. Specifics are outlined. Numbers are quantified. Expectations are set. The Group Hotel RFP provides the venue with insight into how the client will need to use the facility.
Generally, corporations and associations submit RFPs directly to hotels or through some form of third-party entity like DMC, Travel Agency, or a meetings management agency. The hotel receives the RFP and will review all aspects of the requirements to ensure that they have the appropriate number of guest rooms, meeting spaces and other facilities to meet the requirements.
From there, the hotel will “value” the business opportunity in terms of potential revenue and past historical information to determine what options and discounts they can offer in the form of rates. Many details are exchanged through this process, often with several touchpoints between the buyer (your company) and the hotel.
Latest RFP Technologies
Many technology companies have developed platforms to expedite the process (Cvent, Aventri (formerly eTouches), Cendyn/ Metron, and Groupize. The RFP processes are fairly similar whether the technology provider is using a cloud or email-based solution. You identify where you want to go, search for properties that meet your requirements and you send out a request for pricing. Some of the technology providers have the ability to load preferred rates right in the tool – which is helpful to a degree. The venues will respond back through the technology with information on rates and availability.
The reason that many companies struggle with understanding whether or not they have received a great rate is dependent upon many factors detailed in this chart:
Source: GBTA Meetings Committee
Additionally, Group Hotel Rates react to market conditions much like the stock market does. When demand is high the costs will go up, but when the demand dips you might be able to find a great deal as long as you are flexible with your program dates. Some technology company platforms have the ability to compare benchmarked rates based on “average cost per delegate per day” approach to compare group costs at disparate hotels.
Your Next Steps
Have a good foundational budget for your event. If you don’t know when you send out the RFP, try to calculate all of the possible cost elements in advance such as: Guest Rooms, Meeting Rooms, Food & Beverage, Audio-Visual needs, and Ground Transportation. I caution you against sending out RFP’s to obtain a budget. This generally creates false demand and drives rates up unnecessarily.
If you have held an event at a certain hotel property in the past, be sure to provide your historical performance based upon your contract. If you are looking for 20,000 square feet of meeting space at a hotel, but only expect to book 100 room nights, then you will need to reset your expectations or provide additional context as to why the need for so much event space.
Ask questions. Dig deeper to educate yourself on what each hotel is offering so as to have an apples to apples comparison.
For more ways to make your meetings dollar go farther, check out Top Signs You Are Spending Too Much on Meetings.