Bottlenecks are an inconvenient part of everyday life. We experience them in traffic, at the store checkout, and especially the DMV. Even though we have to tolerate them in our daily world, we shouldn’t have to put up with the inefficiencies that bottlenecks create when we’re trying to process group business requests for proposals (RFPs).
The vast majority of properties take too long to respond to RFPs. It's not just time that's lost when RFPs aren't responded to promptly. There have been numerous studies that show how much business is lost by waiting even 24 hours to answer group business requests. The most recent research has shown that waiting over a day to respond to an RFP reduces your chances of securing that business by half.
There are numerous pitfalls in the current RFP process. First, the sales team has to determine if the request is reasonable, then determine whether the property is available, and then respond to the request. After all of those variables are resolved, the revenue management team begins the most difficult part of the bid: what price to quote the group on the room rates.
There are several factors to consider when determining the room rate quote for group business, each of which adds considerable time to the RFP process. The revenue management team has first to determine whether it’s worth displacing potentially higher paying guests. Then, the revenue management team has to look at the likelihood that the group will fill the expected demand and their impact on ancillary revenue sources. Even worse, there’s a plethora of RFPs that are purely speculative but nonetheless requires as much attention as a legitimate bid.
Since group RFPs impact so many aspects of a property’s revenue, each group requires a careful analysis before making a decision. With so much pressure on the revenue management team to turn the requests around as quickly as possible, it’s easy to see why having an efficient system for the RFP process is so critical.
Those in the unenviable position of having to analyze and determine the viability of each RFP know that the technology that’s available has struggled to keep pace with the increasing demands. Recently, there have been significant developments in the software and techniques which have solved the common problems surrounding RFPs.