You’re dealing with big chunks of invisible hotel spend, crappy data on the visible spend, clunky RFP tools, tedious back-and-forth negotiations, last room availability promises that won’t be kept, and disgruntled hoteliers only too happy to poach your travelers with squatter rates that they’ll offer as long as it suits them. Ugh.
Oh, yes – you’re also facing one of the toughest negotiating environments in what, a decade? Ouch.
Speaking of decades, we know you’ve been putting up with this predictably stressful process year after year, for what, two or three decades? Gag.
Hang in their, friends, for the future is much brighter. I saw a glimpse of it at the Beat Live conference in D.C. last week. But fair warning…you’ll need to grit your teeth and open your minds, as it’s not an easy pill to swallow.
Two pills, really. The first is TRIPBAM; the second is dynamic pricing. Here’s how they get you out of the hotel RFP desert:
TRIPBAM is a clever hotel rate shopping service. Send it a hotel reservation, and the service monitors that hotel’s rate, and if you like, a set of nearby similar hotels (your choice if they need to be preferred hotels). These similar hotels are all in a geographic cluster, so the traveler should not have a location issue.
If TRIPBAM finds a lower rate than the initial rate in the cluster, you get the option to cancel the original and re-book at the lower rate.
Folks, this is like sourcing every hotel in your program 24/7/365…all on auto-pilot. Look, Ma – no hands, no RFP process. Woohoo!
But wait, you say – surely I still need to go through RFP hell to get those initial rates, right?
No, you don’t, or at least not nearly to the same extent as you’ve done in the past. This is where dynamic pricing comes in.
Instead of negotiating for flat room rates, you negotiate for a discount off of BAR – on all room types, no blackout dates. Voila – no more LRA issue.
Sure, taking a discount off of BAR means your prices will fluctuate. Up or down. Just like airfares. What should matter most is whether or not your travelers have access to a room at a price that is below market, and that the supplier will actually honor that price.
Even if you’re not sold on dynamic pricing, you can use TRIPBAM to cut way down on your hotel RFP workload. In your high-volume markets, stick with the traditional negotiation for fixed rates…but for everywhere else, you have a couple of interesting options:
One is to tell your most popular hotels in each lower-volume market cluster what rate you need to get them onto the approved list, and that you’ll be shopping rates anyway in the market. TRIPBAM can tell you what the average shopped rate is in any market cluster, so you’ll have a trusty benchmark for your price-setting.
The other is to not bother seeking a preferred rate from any hotel in your lower-volume markets, and just rely on the rate shopping service to serve up the most cost-effective hotels throughout the year.
Most corporate hotel programs have a really long tail of room nights by market, so you could wind up chopping your RFP workload down by what – two-thirds? You’d have a lot more time to put into those high-volume market negotiations, or for any of the dozen other things that need your attention in the last half of the year.
Still not convinced? Check out this story on BTN about how Dell’s Kristina Laurel is using TRIPBAM to improve her hotel program.
Agreed, this isn’t a perfect vision for ending the hotel RFP madness, but this type of automated rate-shopping service surely is a big part of the solution.
NB: I have no commercial ties to TRIPBAM; just a fan of this clearly useful innovation in our industry.
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