The hospitality industry and hotel RFP management is competitive. Before the pandemic, your hotel or venue was probably receiving more RFPs than one could handle thanks to the advancement of hospitality technology. The growth in group demand in hospitality along with how RFP software has advanced has made it easier for event planners to submit - this explains the 300% increase in RFPs over the last 5 years.
With the industry starting to recover, it’s time to take a look at strategically optimizing your hotel RFP management to effectively increase your leads and close more deals. In today’s article, discuss the things you can do today to:
1 - Decrease your RFP response time
2 - Prioritize the right RFPs for your property
3 - Attract more qualified leads
3 Key Components to Effective Hotel RFP Management
1 - Decrease your RFP response time
Statistics show that 75% of RFPs are won in the first five properties that respond. As an event planner, you’re most likely sending an RFP to multiple properties, and, as the saying goes, the early bird gets the worm.
Decreasing your response time sends the message to your prospects that their business is a priority to you and the property. In addition, a quick response also sends the message to your potential client that they can expect great communication from you and urgency with their needs throughout the event. Quick response is a top quality that event planners rank among their top qualities when booking a property for the first time and is a top priority in repeat business. A significant 37% of meeting planners cited bad communication as the top reason why they would select another property during the RFP process.
RFP Technology
Advanced hospitality tech could be responsible for your teams getting inundated with RFPs but, on the flip side, it’s also helping properties handle the incoming requests. Hotel RFP management software helps hotels by reducing response times from a previous 2+ weeks to within 24 hours.
They do this by automated lead scoring which used to take up the majority of a sales person’s time. Your teams would set criteria that are important to the property. Then, as leads come through, they are automatically scored against this criteria and ranked based on how they performed. This cuts down on that arduous process and your team can focus on creating winning responses to win the bids.
2 - Prioritize the right RFPs for your property
How do you know if you’re prioritizing the right RFPs for your property?
The first place to start is to look at your current mix. Many hotels are qualifying leads in a way that may overlook important criteria in revenue potential.
One common bias that negatively affects a hotel’s earning potential is that properties almost always prioritize room blocks over any other type of business. For obvious reasons of course: they offer the highest revenue. A 2015 HSMAI survey stated that 52% of revenue managers and 36% of sales teams indicate that the RevPar index and room revenue are the primary performance indicators they look at. This demonstrates the lack of creative upsell associated with other group services that hotels can offer. Failure to maximize revenue from ancillary spend from other components of the event significantly impacts the bottom line.
In 2017 alone, $110 billion was generated from ancillary spend. Disregarding proposals that don’t have room blocks are leaving a considerable amount of money on the table from things like F&B and AV. When a sales team automatically turns down an RFP that doesn’t contain room blocks, they are also disregarding higher transient rates.
Identify high-opportunity group personas based on your data
This is where your hotel data comes into play. An effective hotel RFP management strategy involves making your sales history do the hard work for you. Sales people can mine their CRM for historical data to segment group types and identify opportunities for higher amounts of ancillary spend. The more personalized your response, the better.
F&B spend is the biggest contributing factor of ancillary revenue. F&B spend at hotels increased from 25% - 29.5% between 2010 and 2016. Sales teams can factor in F&B and score them with different group types by placing them into performance categories or buckets. Properties can then narrow down the type of businesses and RFPs to prioritize their responses.
Now consider your SMERF segments.
While they may not be as exciting and profitable as conferences and business meetings with room blocks, nurturing SMERF revenue as a part of your long-term sales strategy will ensure long-term stability. Diversify your strategy and ensure multiple streams of revenue to sustain long-term profitability, especially during times of economic downturn. Take a look at your social associations or religious groups, they may not have room blocks, but F&B is always a possibility. Opening up your segments like this will allow you to identify opportunities for revenue that will contribute to your overall sales goals.
3 - Attract more qualified leads
Your RFP software will help you to manage and qualify group leads, but what about those incoming leads in the first place?
An important component to an effective hotel RFP management process is positioning yourself in front of the right people to attract the best leads that your property is a match for in the first place.
Direct bookings are the most desirable because it allows hoteliers to take full control of how they’re positioned when connecting with planners. It’s a great way to build and maintain planner relationships that your sales and marketing teams can proactively reach out to. Positive relationships means repeat business.
Nowadays, the majority of event planners do most of their research online. A direct booking channel will target those planners and allow properties to communicate their unique features and offers to help planners meet their objectives.
This avenue is lucrative and big chains such as IHG have even recently launched their own direct group sourcing and booking engine.
Client-first marketing
When you win a bid and close a deal, the revenue is the obvious benefit along with being able to provide event planners with the best option for meeting space. But what’s more, is you have an opportunity to go above and beyond for your client. Turn any successful events into a powerful marketing tool that helps increase group business. Create material to show other chains and groups how your property can help them achieve their goals.
Content, testimonials, and referrals are all great avenues to show new prospects how well you’ve done in the past, will turn older clients into repeat business, and attract new groups in the future.
The approach begins with showing how your property can be transformed and tailored to the unique needs and goals of the specific event in question. For example, Hilton’s WowMakers campaign features stories from planners who have executed complex and intricate events at Hilton’s properties.
Another example is Marriott’s Meetings Imagined program that offers online resources for planners to identify the purpose of the event and ways to execute to bring that purpose to life. The website offers inspiration and showcases Marriott’s portfolio of past events through user-generated content from happy clients. Both chains are able to attract more qualified leads at that caliver which in turn, means higher quality RFPs and maintaining a strong brand reputation.
Whether or not you’re experiencing a slower event season, don’t let that stop you from reviewing your current processes to improve. Hospitality is changing so assessing your current strategy, adapting to new tech and assessing your lead strategy will set your team up for success to ensure you’re able to achieve the right mix of business through your RFPs.
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