Hotel RFP Hell: Is the End at Hand?

Let’s agree that all our friends and colleagues who are in the midst of yet another grueling hotel RFP season should have our sympathies.

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:

Airline Sourcing One-Day Workshops

Any travel buyer interested in learning the most powerful and innovative methods for sourcing airlines should attend one of my workshops:

Airline Sourcing, Nov. 14th in Chicago

Airline Sourcing, Dec. 10th in Dallas

I’ll cover the basics, but then quickly head into deeper water – where buyers will learn how to maximize their leverage, regardless of their air spend. Key topics include:

• Scenario modeling
• Risk-reward mapping
• Why discount benchmarking is useless, and what’s better
• Discovering the gap between the offered and maximum rational discount
• Finding the 20% of your markets that will drive 80% of your savings
• Optimizing between trip cost and trip friction
• Predicting the impact of the AA-US merger on your 2014 air budget
• Procurement’s best and worst roles

These workshops are open to anyone, including airline sales managers.  Register via the GBTA website.

Everyone benefits from having a sophisticated, fact-based discussion about optimizing airline discounts. I look forward to seeing many of you there.

On The Road to Education

There likely won’t be any new posts here for the next two weeks, as I’ll be busy delivering travel procurement training in Asia and the U.S. For those interested in the topic, here’s where I’ll be:

17 May near Denver for the Hotel Sourcing Workshop, sponsored by the Rocky Mountain Business Travel Association

23-24 May in Singapore, 26-27 May in Manila, and 30-31 May in Hong Kong to deliver a two-day course on travel procurement principles and travel program globalization. This is an invitation-only course sponsored by Amadeus and Carlson Wagonlit, with support from the Global Business Travel Association.

8 June in Chicago for a one-day workshop on travel procurement sponsored by the Chicago Business Travel Association and GBTA

Then a nice break at home before going to Indianapolis on 23 June for a speech at the Ohio Valley Business Travel Association meeting. I’ll cover the topic of selling into procurement – a challenge that most travel suppliers are facing.

I hope to see some of you at some of these events.  If you’d like to meet before or after, drop me a note!

TIILTS: Policy Points for Good Self-Bookings

TIILTS stands for Travel Innovations I’d Like To See.  You’ll see quite a few more of these in the weeks to come. This first one deals with corporate self-booking tools.

There’s a trend toward empowering corporate travelers when it comes to making their travel arrangements. Why not swim with this tide? Why not create a positive reward, rather than a negative consequence, for travelers who are about to pull the trigger on a travel purchase?

I’d like to see companies reward travelers for doing the right things. Before you say “No way – employees are expected to do that in the first, middle and last place!”, take a breath and hear me out.

What is one of the biggest obstacles to travel policy compliance? You got it – Frequent Flyer Points.  These loyalty schemes work really well, so why not take a page from the suppliers and put the concept to work for you buyers?

Here’s a mock-up of what a points-driven self-booking tool might look like (click on the image for a better view):

The keys are that the traveler gets very clear reinforcement of the desired booking behavior, the reward associated with it,  his current status, and what it takes to get to the next level.  There are lots of variations on this, but you  get the idea – a way-easy element to build right into the point of sale when – and where –  it matters most.

Air Sourcing Academy a Big Hit

The first-ever one-day workshop on airline sourcing was a big success!  About 70 delegates worked their way through the key success factors for sourcing this important spend category. NBTA‘s post-event survey measured two key factors:

The change in the level of understanding of airline sourcing (definitely improved, above), and the overall satisfaction with the event (quite high, below).

Best Practice: Hotel Sourcing Strategy Study

We’re moving into the hotel sourcing season, so take a moment and think about your favorite little black dress or your best power suit.  What makes it your favorite? And how the heck does this relate to hotel sourcing?

Great clothes project the image you want.  They send signals.  They help define your image.  And if you’ve chosen carefully, they help achieve your goals. But they’ll only do that if your clothes fit like a glove.  See where this is going?

Why Ancillary Revenues Don’t Much Matter

Let’s cut to the nub of this issue.  No one will  ever know for sure if ancillary revenues make airlines more profitable.  There are just too many moving parts in an airline’s  revenue stream.  Sure, airlines may report an extra billion dollars in ancillary revenue (AR, from here on) – but what did fares do?

If fares went down, then maybe the extra AR revenue

Most Popular Reads of 2009

This blog’s most popular posts involved innovation, fighting words, myths and data sources.  Not quite sure what this topical variety tells me about the direction I should take with this travel management blog in 2010, but stay tuned! (Sign up here for immediate delivery of new articles via e-mail)

The most-read posts in 2009:

Three Myths About Sourcing Airlines – Part 3

(This wraps up the 3-part series.  See Part 1 on consortia buying here, and Part 2 on pre-paying here)

Forget About Those Frequent Flier Miles

Frequent flier miles add cost to the airfares your firm buys.  And yes, firms have tried to cut those costs by stripping miles out of corporate fares, or by capturing employee-earned miles.

But it doesn’t work, for two reasons:

1. Entitlement

No question, business travelers feel that those miles are theirs. 

Three Myths About Sourcing Airlines – Part 2

(See Part 1 in this series here)

Why Buying in Bulk Doesn’t Work

Bulk buying (a.k.a. pre-paying) makes sense for many commodities, but not airfares.  Why? Because it’s complex and expensive.

It’s Complex

Let’s say you want to bulk-buy $1 million in airfares from your primary carrier. You write the airline a check – simple. But now:

Which departments in your firm will be charged for their part of the bulk buy?