The ride keeps going round and round and up and down and never moves forward. I am talking about the corporate hotel RFP process and program. The time is perfect for stopping this ride and jumping off!
There has never been a better opportunity to change it all. When Marriott announced that they would not go through an RFP season, my first thought was to let us take advantage of this opportunity to change how we buy.
Statistics show that 56 percent of business travelers want a more flexible travel policy, and 40 percent already book their hotels directly, according to a June 2021 SAP Concur/Wakefield Research survey. Millennial employees are the highest volume of travelers today, and Generation Z is coming in fast. Neither of these generations operate well under micromanaged programs. They want it mobile, easy, simple and fast. They want the company to trust them more and give them the flexibility to get the job done.
It is difficult to save for challenging times when your market cost is so high. Think about it, every year, you spend months planning, auditing, implementing, managing and monitoring your preferred hotel program, rates and discounts. What if you could work “smarter” with your hotel partners and reduce this cost to manage on both sides? What if you could share in savings rather than try and “win” in negotiations?
Many companies now provide the technologies and software available to build a better hotel program, including (but not limited to) a benchmarking index, technology that delivers direct booking data to you for duty of care at the point of sale, software that audits all transactions as they are booked in all channels and the ability to measure the traveler experience as it happens. It is all available at minimal or no cost, and these tools do not add layers to an already complex program but work to simplify the process. Most do not need any IT integration.
Try this, sit down with your hotel partners, and ask each other what would work best for both parties. How about a “smarter” contract? Here are five steps to get you started.
- Look at your 2019 data; reduce it by the percentage of spend (not market share) that will become permanent. Include all expenses (not just spending under management) from all booking channels.
- Start with this base of spend. Ask your hotel partners to give you a percentage discount related to that baseline.
- Once that spend is achieved, set an automatic increase in the percentage discount as the spend increases to another tier.
- Set some rules on both sides that address your service and experience levels. Create new SLAs and KPIs to measure this.
- Build a relationship based on trust, innovation and continuous improvement.
When is a better time to transform our industry than now? The old processes create an unnecessary, unwanted and unproductive adversarial relationship between buyer and supplier in which neither side “wins.” Let’s work together, in partnership, to create a new model for the future. We are and will always be “better together.”