RFPs aren’t just about getting the best rates anymore

Requests for proposal (RFPs) aren’t just about negotiating better rates – they are increasingly being used to maximise employee satisfaction, better manage risk and meet carbon emissions goals.

While a focus on reducing costs remains, corporate travel managers are rethinking how they source hotels and meeting venues via the RFP process, shifting from ad hoc negotiations to more strategic, value-driven approaches for their companies and travellers.

This is according to findings from a survey featuring corporate travel managers in the US, Canada and Europe, carried out by the Global Business Travel Association (GBTA) and Cvent. The resulting report is entitled ‘Hotel and Meeting Sourcing: The Current Landscape and the Future’.

Of the travel managers negotiating directly with hotels, two-thirds (63%) conduct formal RFPs, including almost half (47%) that only negotiate through RFPs and an additional 16% who also negotiate informally. Some (36%) negotiate with hotels entirely outside of a formal RFP process.

The survey also found that smaller businesses prefer to keep deals informal. Seven in ten (69%) of these firms negotiate with hotels entirely outside of an RFP process, compared to only about one in five at larger companies. Informal negotiations are also less common in Europe, where more than half of buyers (55%) say their company exclusively negotiates with hotels through RFPs.

Travel buyers also see drawbacks from negotiating with hotels outside of an RFP process, including manual processes/less standardisation (53%), hotels might not fully understand contract terms (47%), and fewer properties to be compared (37%).

When it comes to securing meeting space, one-third (34%) of companies do not have a defined sourcing process for securing meeting/venue space – despite potential savings. Of the buyers who say their company negotiates directly with venues, three in five (61%) say their company conducts RFPs.