Leading Meeting Professionals

Professional Convention Management Association

Is the RFP Process Broken?

by By Christopher Durso, Executive Editor | Apr 11, 2013
Hotel salespeople say they're buckling under the weight of lead spam. Planners say they're not hearing back about their proposals as quickly as they need to. Is the RFP process broken? And can it be fixed?

Hotel salespeople say they're buckling under the weight of lead spam. Planners say they're not hearing back about their proposals as quickly as they need to. Is the RFP process broken? And can it be fixed?

You there. Planner. That button you're about to mouse-click. The RFP you're about to shotgun to 59 hotels in four cities spread over three time zones. Those expectations you have of getting a tailored response back from each property within 24 hours.

You could be creating problems for yourself.

To be sure, the rise of online platforms that let you electronically submit your RFP to any number of hotels and other venues at one time has been a boon for meeting bookings, bringing business leads directly to salespeople who otherwise might not have seen them. But on the flip side, eRFPs can bring a lot of leads to those salespeople — sometimes indiscriminately, wasting their time and yours, and sometimes simply more than they can handle in a timely manner, which means they can't answer you as quickly and with the detail you'd like.

The problem is acute enough that there's a name for it: lead spam. “The truth of the matter is, the [planner] is going to choose one property in one city to do this meeting,” said Gus Vonderheide, vice president of global sales - Americas for Hyatt Hotels Corporation. “And yet they have 50 hotels spinning through hoops trying to get back to that customer to determine whether there is availability or not, when maybe the customer never really considered Boston — Philadelphia was always their choice, but they wanted to make sure they were getting all of the information they could.

‘I think as an industry we have identified the problem with RFP spam.’ -Gus Vonderheide

“Multiply that by the amount of RFP organizations out there and the amount of organizations who are using this tool to source their business today,” Vonderheide said, “and you can imagine that there are thousands and thousands of leads that are out there in space that are not really ever going to land in the property. But yet the hotels are having to jump through hoops to get those done.”

 All that said, there's good news — for planners, hotels, and suppliers alike. “I think as an industry we have identified the problem with RFP spam,” Vonderheide said. “It was somewhat frustrating from the hotels’ perspective a while back that we didn't really think that the third-party RFP providers were really listening or hearing, and I can say today that I think it is absolutely top of mind. And that's a huge step in the right direction.”

Spam, A Lot

Online platforms for eRFPs hit the market in a big way four or five years ago, right about when the economy went south, and for a while they seemed like an answer to the prayers of sales teams everywhere — at a time when business was drying up, leads were coming in from all over. But as the economy recovered and group business wasn't so hard to come by, the sheer volume of eRFPs threatened to become overwhelming. It takes a salesperson an average of 20 to 30 minutes to respond to an RFP, according to Elite Meetings International, which offers an RFP engine for higher-end hotels and resorts. And over the last three years, the number of RFPs sent to hotels has increased by 300 percent.

“I feel like it came in a perfect storm where hotels were seeing [the financial crisis in] 2008 happen and hotel rates came down and meetings were shot, and you couldn't do anything in resorts. So there were a lot of things that were happening at the time,” said Bharet Malhotra, vice president of sales for Cvent, which also offers an online-RFP platform. Today, “there's no doubt that we have increasingly heard the whole concept that hotels are getting a lot of leads and they're converting less than they used to, or planners are not hearing back in the right amount of time that they need to hear back, and whatnot.”

Added Robert Gilbert, CHME, CHA, president and CEO of Hospitality Sales and Marketing Association International (HSMAI): “They make it too easy to handle it. That is part of the problem. I think planners get a bad rap when they push out 20 or 30 or 40 eRFPs to that many hotels and destinations, and all of a sudden on the hotel or the DMO side, they're getting the same lead from two or three different sources. They may be getting it from a third party. They may be getting it from a DMO. And they may be getting it direct.”

Dave Nostrand, Marriott International's vice president of sales for the Americas, points out that in their eagerness to cover all their bases, planners can actually shoot themselves in the foot. “We often experience a high number of hotels requested on customer RFPs, which often stems from the customers sourcing multiple hotels,” Nostrand said. “Customers feel that if they source more hotels, it will improve their RFP response rate. This practice can sometimes actually delay response times.”


RFP spam is particularly a problem for independent properties, ‘because they have got to juggle manpower at the individual-unit level.’ -Robert Gilbert

Not that those customers always realize RFP spam is an issue. Elite Meetings brought together planners and hotel sales professionals at its Elite Meetings Alliance program at Revel in Atlantic City last August. One of the sessions was a panel discussion on “RFP Process & Volume.” “The panel was about RFP spam, period,” said Kelly Foy, Elite's CEO. “The amazing thing was that about 65 percent of the planner attendees had no idea that was a problem. And every hotelier in the room knew it was a problem.”

For at least one planner, the problem with eRFPs goes beyond how many of them pile up in someone's inbox. “I definitely see [RFP spam] as a legitimate problem,” said Larissa Schultz, CMP, owner of LJS Meeting Strategies, “but I think we need to take a step back and realize this system that we've created in our industry to have everything go electronically may be be broken. And it was a great concept and a great theory, but in practice what you're seeing is, meeting planners can't precisely figure out what their unique needs are, so they ship something out to everybody and hope somebody responds back.”

But not everyone — not even every hotelier — thinks RFP spam is a problem. Michael Dominguez, senior vice president of corporate hotel sales for MGM Resorts International and the selfadmitted “contrarian in the room,” simply sees it as part of life and business in the 21st century. “I'm a firm believer that we live in an on-demand society,” Dominguez said. “We've trained the customer and the consumer to be able to get what they want, where they want it, and how they want it. For us as an industry to dig in and think that we're going to be able to change the way our customer wants to buy from us is a little bit of an unrealistic view of the process.”

The Human Touch

But, like Dominguez says, that's something of a minority view. RFP spam is especially problematic for independent properties, Gilbert said, “because they have got to juggle manpower at the individualunit level, where at least the brands can redirect or reallocate some of their national or global sales teams to deal with some of the traffic.”

Indeed, the larger hotel chains have standard operating procedures for dealing with RFPs that can help keep them in check by rigorously tracking every input. “Marriott has identified response times to customer RFPs as part of its Service Standards,” Nostrand said. “Times are based on arrival dates and group size. For example, 50 peak group rooms arriving within three months will get an RFP back from Marriott within five business hours. As the number of hotels on the RFP increase, the time/standard increases to allow for research and proposal generation.”

‘Customers feel that if they source more hotels, it will improve their RFP response rate. This practice can sometimes actually delay response times.’   -Dave Nostrand

That helps, but it doesn't mitigate the problem completely. And it doesn't get at another complaint about eRFPs: They reduce or eliminate human interaction from the sales process. “I consider myself kind of an old-school planner,” Schultz said. “I've been doing this for 17 years. Back when I started there [were many] more one-on-one relationships with your hotel venue or with your national sales manager who oversaw your project.” For planners who have never known life without eRFPs and weren't trained in the tradition of calling up a sales contact, “I don't think you would think that that's an option, because we're so ‘this is how you do the RFP, and you do it through the computer and you send it in online.’ And what we're seeing is a loss of the interrelationships.”

That's the experience of some meeting professionals on the other side of the table as well. “The constant comment I get from salespeople is, ‘This electronic RFP system — the problem is it's making it transactional. It's taking away our ability to get to meet the customer,'” Dominguez said. “When I hear that, I call everybody on it. I say, ‘Look, if you're waiting to build a relationship till when you got the lead, you're too late.’

“This is my problem. I think people make it become the crutch to say, ‘They're keeping me from my customers.’ No, that is not quite accurate, because in my experience with StarCite and Cvent, they will get me to my end user. They will tell me which customers are using my hotels. I can build relationships with them.”

While acknowledging that the online-RFP process is not without flaws, providers such as Elite Meetings and Cvent stress that they've built human contact into their systems. Elite has an in-platform messaging system, for example, that allows planners and salespeople to communicate directly. Beyond that, “We provide all of the contact information [for each venue] to the planner,” Elite's Foy said. “It's up to the planner to indicate to the hotel in our system how they want to be contacted.… This is all about the face-to-face, and our whole mantra is, let's introduce the right buyer to the right supplier and let's get the heck out of the way.”

Cvent likewise incorporates a variety of touch points into its platform, including client-services assistance for meeting professionals navigating the process, as well as built-in “metrics and measures” designed to educate product users. “We don't feel comfortable being in the position to tell a planner or a hotel what they should respond to, how many venues you should send it to,” Malhotra said, “because we are a technology that has been built to get [someone] to use hopefully in the most appropriate way possible.”

In other words, you have to let people figure out if and when they need to talk to one another — which is how Sharon Collins, CMP, SMMC, strategic meeting partner for the American Cancer Society, prefers to operate. “We find that when we get to our short list [of venues after sending out an eRFP],” Collins said, “… it's then that we're reaching out to say, ‘Okay, do you have flexibility on this,’ or ‘Tell me what space you have secured for our event,’ and then we'll do a space analysis.… We really get down to brass tacks with that interaction, whether it be an email, phone call, [or] involvement of an NSO.”

There's Always Room for Improvement

Like Hyatt's Vonderheide said, the meetings and hospitality industry is aware there's a problem, and has convened any number of discussions about RFP spam — formally and informally — at industry conferences. And professionals on every side of the table have some thoughts about how the RFP process could be improved:

1. eRFPs need to be more nuanced. Schultz generally creates and distributes her own RFPs, partly because she can customize them for each individual meeting. “I look at it from a planner's perspective,” Schultz said, “and … when we have to work within the technological system that is provided, we have struggled with being able to customize it. We feel as planners that all of our programs are unique and different, and I think on the hotel side they look at it as [so many] heads. It does lose that personal touch through a computer agency, because it does standardize it and it makes it a little bit more difficult to be very specific on what you need.”

 RFP providers would agree that better-targeted information is always beneficial, and over the last year or two have taken steps to refine their platforms, both allowing planners to more precisely hone their RFPs and limiting the number of venues they can submit it to. When a planner using Elite's platform selects seven hotels to submit an RFP, Foy said, a message pops up “that basically warns, ‘You don't want to send this to more than seven hotels. Please don't.'”

Likewise, Collins appreciates that her RFP provider — StarCite — allows her to add customized specifications and cover letters for each bid. “We [ask] for the American Cancer Society, what percentage of your hotel is smoke-free?” Collins said. “Because that's a consideration for us. So you can customize those questions so that you're ensuring that you're getting the most back to do that first round of elimination for hotels that have space available.”

Dominguez thinks it might also be helpful to have a preliminary step in advance or in lieu of a full-fledged RFP — an RFI (request for information). “If you are looking at three different destinations and a whole bunch of hotels,” he said, “candidly, what you need to know is that I can handle your meeting. Do I really need to tell you at that point which ballroom I'm going to put you in if you haven't even decided which city you'll be in?”

2. Planners need to be more disciplined. Just like when you have a hammer, everything looks like a nail — when you're sending out an eRFP, every venue looks like a potential fit, because it takes no more effort to reach a hundred venues than it does to reach one. “There are planners that have been abusive of this system, and we have shut them down because we don't believe in their logic,” Malhotra said. “They will send [an RFP] to a five-star hotel and a local motel for the same piece of business. That does not make sense, so we'll give them warnings and we have no qualms about telling planners that we are going to shut you down and disable access to the system.”

‘Do I really need to tell you which ballroom I'm going to put you in if you haven't even decided which city you'll be in?’ -Michael Dominguez

This is where it's on planners to think seriously about their meeting before distributing their RFP. “If there is any opportunity for [planners] to narrow their search down to either a destination or a brand or a type of hotel prior to pushing the button,” Vonderheide said, “it certainly is appreciated by the hotels. It allows us to concentrate and jump on the business that is most relevant to us and not lose one of their very important meetings in the minutiae of leads that may or may not be relevant for your hotel.” Added Foy: “Two or three minutes of extra work will save hours on the back end. To me, that's just the bare-bones basics, but a lot of people overlook it because these systems make it so easy.”

To that end, Schultz would like to see RFPs — electronic or otherwise — get their due as a crucial part of the planning process. “I feel RFPs are very, very valuable, and I think that there is not enough value placed on the RFP and its purpose,” she said. “The RFP really begins the whole negotiation process, so there needs to be a lot of forethought that goes into the RFP to make sure that it's going to meet the program objectives and obviously the budget.”

3. Sales professionals need to be more adaptable.
“There is no doubt,” Vonderheide said, “that electronic RFPs have brought a new way of doing business to us.” Dominguez agrees, to a point. “There is a huge learning gap for us, because it is a different way for us to approach the sell,” he said. “I don't want to phrase this the wrong way, but I do believe it has created some complacency in our sales arena, especially with less veteran salespeople. I don't want to say ‘younger,’ because it's not an age issue, it's an experience issue.”

And yet, it wasn't so long ago, Dominguez said, that 80 percent of leads came in via fax. “Why is that so different and earth-shattering that now it's coming through an email or an electronic system that is automatically populated?” he said. “When we [say] people are doing more of it, what has changed is the breadth of our industry. Our industry has never been larger. We are seeing a lot more volume because of that. I really do think we have to get back to basics when it comes to selling.”

4. Everyone needs to remember the basics. One time during a meeting of Hyatt's customer advisory board, a salesperson asked board members how he was supposed to build a relationship with them when their business was coming to him online and they wanted him to reply within hours. “A customer stood up,” Vonderheide remembered, “and said, ‘If you're waiting for the RFP to hit your desk before you make a relationship with me, you've waited too long. You better get to know me and you better get to trust me and I trust you before the electronic RFP comes across, because when it comes back to me with a response, that relationship I had with you is going to be crucial to me deciding that your property is the right choice.'”

That's not just a lesson for salespeople. “I like to do business the way I used to do it,” Schultz said, “where I would send an RFP to a hotel, and then I would follow up with an email and a phone call and I would make sure they received it, and start that personal connection, that personal relationship. I feel for suppliers, because they are now so inundated. Staffing has been reduced all across the board, and I think suppliers now are feeling the burden of having to respond to a lot more RFP requests, a lot more planners, and a lot more clients than they used to.”

Which brings us back to Dominguez's belief that the eRFP is just one more aspect of an ondemand world — that “we've trained the customer [to expect that] they can get whatever they want and they can get it now. If they want to do a search in 12 different cities, guess what — they can do it. We need to figure out how to work through that process.” But that doesn't mean you abandon the core values of the meetings and hospitality industry. “We need to get salespeople out from behind their desk and going to meet our customers,” Dominguez said. “We need to be on the road much more frequently, we need to be with our customers much more frequently, because at the end of the day, this business is still about relationships.

“I can't stress enough, if people are waiting until they get the RFP to try to build a relationship, they're too late in the game,” he said. “You should've been building that relationship with our customer ahead of time. [The eRFP] is a distribution method. It is not an opportunity for us to build relationships. It is their distribution of a lead. That has nothing to do with the relationship you should've already been building with the customer.”

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