The path keeps going in circles and up and down and never goes forward. I’m talking about the corporate hotel RFP process and program. Now is the perfect time to stop this ride and jump!
There has never been a better opportunity to change everything. When Marriott announced that it would not go through an RFP season, my first thought was to let us take this opportunity to change the way we shop.
Statistics show that 56% of business travelers want a more flexible travel policy and 40% already book their hotels directly, according to a SAP Concur / Wakefield Research survey from June 2021. Millennials make up the largest number travelers today, and Gen Z is coming fast. None of these generations perform well in micromanagement 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’s hard to save for tough times when the cost to your market 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 be managed on both sides? What if you could split the savings rather than trying to “win” in the negotiations?
Many companies are now providing the technologies and software available to create a better hotel program, including (but not limited to) a Benchmark, a technology that provides you with direct booking data for due diligence in point. sales, software that audits all transactions as they are booked across all channels and the ability to measure the traveler’s experience in real time. Everything is available at minimal or no cost, and these tools don’t add layers to an already complex program, but strive to simplify the process. Most do not need any IT integration.
Try this, sit down with your hotel partners and ask yourself 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 (no market share) that will become permanent. Include all expenses (not just expenses under management) from all booking channels.
- Start with this expense base. Ask your hotel partners to give you a percentage discount compared to this reference.
- Once those spend are reached, set an automatic increase in the discount percentage as the spend moves to another level.
- Set rules on both sides that deal with your levels of service and experience. Create new SLAs and KPIs to measure this.
- Build a relationship based on trust, innovation and continuous improvement.
When is the best time to transform our industry than now? Old processes create an unnecessary, unwanted and unproductive adversarial relationship between buyer and supplier in which neither party “wins”. Let’s work together, in partnership, to create a new model for the future. We are and always will be “better together”.