As the storm clouds continue to clear, post-pandemic, a changed landscape for business travel is emerging and, along with it, important questions about the future of how we will work together. One thing is clear: the ability to meet face-to-face is not only essential for our personal and professional wellbeing, but it is still the best way to productively collaborate and build better work relationships between staff. As companies and organizations attempt to redefine what it means to work together, they are also grappling with questions about how to structure corporate business travel policies that balance their employees’ comfort level with their business recovery and growth needs.
Today, corporate business travel is recovering at a slower rate than leisure travel. It’s hardly surprising that companies are more cautious about assuming unnecessary risk, especially when you consider their duty of care obligations towards their employees, along with the potential damage that a widespread outbreak could create for their operations and productivity. Nonetheless, there is, and will continue to be, a growing urgency for companies to bring together teams for both internal and external meetings to drive innovation and achieve better business outcomes.
Meetings, both today and in the near future, are generally becoming smaller and are more numerous than pre-pandemic; for example, global conferences are becoming national conferences, national sales meetings are being replaced by multiple regional sales meetings, etc. This trend towards more frequent and smaller meetings is driving big change, operationally, for both buyers and sellers of hotel accommodations that is causing a ripple effect throughout the hospitality and MICE industries. This article takes a deep dive into some of the less obvious consequences of pandemic fallout.
The traditional hotel sales structure had already been undergoing radical transformation for the past decade with the advent of new technologies, hotel consolidation, online distribution channels and advances in revenue management – and all of that was before COVID decimated the travel industry, like a Category 5 hurricane. COVID has made “old school” hotel sales techniques (relying on slower, more methodical relationship building) extinct. The pandemic-related staffing crisis (a.k.a. “The Great Resignation”) brought an entire new generation of professionals into the industry, on both the buyer and seller sides. So, while it is simplistic to suggest that relationship building is not still an important part of the hotel salesperson’s job, the speed and scope at which our industry is changing makes it only one part of an overall hotel sales strategy.
Today’s accommodations buyers – whether full-time business travel managers or an admin planning an occasional meeting – are tech-savvy, data driven and want fast answers. Hotels must react with faster turnaround times on RFP responses, streamlined processes and data-driven pricing.
Here’s why: professional planners and large business travel buyers are already well-known among hotel brands and competition for their limited attention is already high; however, today it is impossible to know and be able to influence most people who purchase contracted hotel rooms or plan meetings and events on an occasional or one-off basis. That makes reliance on online sourcing platforms for incoming RFP leads a popular sales channel, but one which can make it difficult to effectively compete for desirable business without offering the lowest rates.
This problem is compounded by rising costs. Whereas technology-enabled sourcing was once a mostly cost-effective channel for contracted hotel sales, it is quite different today. Too many of the popular online sourcing and procurement platforms available today enable and promote a quasi-adversarial approach to buying and selling hotel rooms that is frustrating, time-consuming and confers an advantage to one party or another. When Marriott led the charge to cut commissions from 10% to 7% in 2018, they cited the rising Cost of Sales from online channels as the main reason. In addition to commissions, hotels were paying for access, advertising, promotions and more – up to 30% of the total value of the sale.
So, what’s the answer?
There’s a better way which addresses the needs of all parties; sourcing technology platforms which are impartial, enabling transparent, open communication and faster, more satisfactory results for all parties.
For the buyer, an intuitive easy-to-use interface makes it easy create, search and send an RFP that outlines all their needs. Backed by a robust, comprehensive database, smart filters and relevant rating tools can help buyers identify the venues that best fit their needs and data analytics can help compare hotel bids on a total cost basis, to help buyers uncover hidden costs.
On the supplier side, a hotel sales team should be able to quickly assess and respond to every RFP, based upon how well it fits their availability and revenue needs. Even more importantly, hotels need the ability to actively participate, during the sourcing process, to ensure that they win the business that is especially desirable. Look for a platform (like Vindow!) which show hotels, graphically, how their proposal is ranked, weighted by rate and concessions, in comparison to their competition; even better, hotels can instantly improve their bid, if necessary, to increase the likelihood of winning the RFP. Features like this also benefit the buyer, by ensuring that hotels have responded with their best and final offer.
Even intermediaries and third parties benefit from a level playing field when sourcing on behalf of their clients, by helping to demonstrate real added value through their relationships, advocacy and enablement.
That’s what makes a transparent sourcing platform a gamechanger for both buyers and sellers.