Episode Transcript
[00:00:08] Speaker A: Welcome to this episode of youf Window Seat, where we at Travel Incorporated discuss the topics that you care about most in this ever changing business travel industry.
I'm Tracy Carrillo, your host for today's topic, Not Another Hotel RFP A. Okay, maybe not so funny. As we have just been through another season of diving into data, benchmarking every way possible, surveying our travelers, and then finally celebrating when the final bids are in and contracts signed.
The question we want to answer today is does it really have to be that way with us today? To learn more about what's happening in the hospitality vertical and what is and what isn't changing is industry aficionado Annette Cummings. Annette is co founder, Chief Revenue officer and head of Marketing at BTP Automation, which was awarded one of the 25 Hot Travel Startups in 2024 by FocusWire and she personally received the award as GBTA's Winnet Most Innovative Trailblazer for 2024. Annette, I'm not sure what's next, but boy are we happy to have you as our guest. Welcome to this episode of your Window Seat.
[00:01:24] Speaker B: Thank you so much Tracy. I am delighted to be here and I love talking about hotel RFPs. So excited for the conversation.
[00:01:33] Speaker A: Well, let's get started and set the stage with the reality of hotel RFPs.
Every year, travel and procurement managers review their data and set out to negotiate that best program possible for their companies.
What challenges are they facing with this approach?
[00:01:51] Speaker B: There's three and let me start with the first one which is core to any good hotel program is good data having insight into not only your own program, but what's happening in the hotel industry moving forward.
It's like any negotiation, it's as strong as the data you have to support it.
So I would say that getting their hands on really good data without having to take hours and hours and hours and hours to figure that out. And we recently did analysis with a couple customers and said, listen, tell us if you were to do this the way you used to do it, let's add up all the hours and from start to finish, a typical hotel RFP can take up to 30 hours per RFP. When you look at the ability to comb through Excel documents, decide your strategy, then you got to get it out, then it has to get responded to, then you have to rate audit and it really adds up quickly. So time and data are the first one first challenge.
The second is visibility and I'm pretty passionate about this one because I do feel customers should have their data no matter where it's booked I know it's a little controversial, but the reality is, Tracy, you and I have been doing this a long time. And you know, after 30 plus years, travelers still go direct to hotels. I mean, it's inevitable.
And if I'm a travel manager and I need to go negotiate with my best foot forward, I need to have all of that data to do that and the visibility of where my travelers are going.
So it's about getting your arms around the visibility of your hotel spend so that you can negotiate with the strongest starting point.
And then I would say third is, you know, just the continuing discussion on rates.
You know, it, it happens every year. There's the controversy, if you want to say, of, you know, hotels maybe prefer dynamic rates, customers push back and say, you know, no, we really want to lock in these rates. There's, there's pros and cons to both, but I think it's putting all of those three things together when you look at your hotel program that are probably the, the things that customers are the most focused now.
[00:04:19] Speaker A: And what can travel managers do to encourage a shift in their behavior to booking back through their preferred channels?
[00:04:27] Speaker B: So as you mentioned, most of us have been living this 30 plus years and you know that, that fun word we call hotel leakage, right? Which I, we got to find another name for it. But it's a good representation of what's happening around hotel data.
And I would say that the root cause of that really still hasn't been addressed, in my opinion. I think the root cause of why travelers still go direct really comes down to a couple things.
One is they continue to still struggle with their booking experience within their platform.
I come from an online booking tool background, so I know that space very well. And it's not easy to build really good tech around a hotel booking experience. Hotels even have this challenge on their own websites, but travelers jump out they go, they do their own thing right on, on a direct site. And also another reason is loyalty programs. Hotels definitely can entice travelers to book direct to maybe get more points, maybe book a room type that is only available on their website to get, you know, more points. So, you know, that is, that's the root of all of this. I honestly, I just don't see that going away.
However, there are, I think there are ways for travel managers to mitigate it. And I think first of all, the travel managers have to be okay with maybe there is always going to be a certain percent of travelers who go out of program. And you get your arms around that and you're okay with it. Right. If you kind of manage to that 80, 20 rule, if you got 80% of your program in channel, you're doing really well.
Duty of care is, is a big piece of it. I think it goes in waves like it's a big topic for a while and then it goes away and people kind of forget about it.
I think it's a cultural thing as well. If within the organization of the buyer, it's incredibly important that they have that insight to where everybody is. That's going to dictate through policy. It's going to be reinforced in the booking tool, but honestly reinforced in the expense report. Because if the company says, listen, unless you book through my preferred channel, our preferred channel, you're not getting reimbursed. That pretty much addresses it pretty quickly.
[00:06:56] Speaker A: How many are really ready and willing to take it that far? You know, they're not.
[00:07:01] Speaker B: They're not. I mean, that's really extreme.
And so it's about balance. It's about harmony, I like to call it of all of that. But, you know, I know at Travel Link, you and I've talked a lot about your ability to bring in some really good insight into customers programs around the data to help them understand, you know, when those travelers go out of program, what happens, you know, and how that impacts their program. So it, you know, this is the theme of today, I think data, right. Everything goes back to data. But it also, Tracy, comes down to communication.
And if I'm, if I'm a traveler, understanding why it's important to use the approved channels, bringing it back to hotel rates, getting those negotiated rates through my approved channel, the things that my travel team at my company have negotiated for me, different amenities, things like that. So it's communication is a way to shift behavior, for sure.
Also taking that communication and showing them impacts.
Right. Because you pretend I'm the buyer. Right. And because you all did the right thing in our top five markets, telling travelers here's what we saved last year, like making them a part of the outcome of all of these things. Right. So it's just educating them.
[00:08:35] Speaker A: Perfect. You also mentioned dynamic rates, and this is becoming a really hot topic these days because with properties pushing them and the travel managers having a better appetite or a better ability to budget with the fixed rates, how can travel managers more effectively negotiate towards a fixed rate when the property is pushing so heavily on that dynamic rate program? And give us a little insight as to why those hotels are leaning that way.
[00:09:11] Speaker B: You know, coming out of COVID really is when we've seen the biggest increase in dynamic rates within the sourcing process. They've always been there.
Certainly customers have chain wide. Those are always dynamic. But when you're talking about a negotiation directly with a property, you know, I would say up until about five years ago it was typically fixed rates and Covid happened and that just changed some of the dynamics.
I have so many incredible hotel partners that I work with on a day to day basis and I hear their struggles too. I mean they're running a business, they've got revenue goals, Revpar they call it.
So it's about a really delicate, I feel ecosystem between the buyer and the hotel. And you as a tmc, Tracy, and the tech that supports all of that. And we all have to work together and make things.
They're going to help everyone. And every customer I work with wants their hotel partner to do well.
They're not trying to undercut them, they're just trying to do the right thing for their program. And as you mentioned, budget is incredibly important. And I see this all the time where customers say like I, I have to stay flat or I've been given the okay to go maybe a couple percentages over what we paid last year. Now think about that. When you are running a multimillion dollar program, how do you do that?
And so it all comes back to that sourcing. Sourcing. Well, starting out your negotiation really strong.
But also to your question, what can buyers do? They I do think you have to understand you can push back and maybe it's a give and get.
You and I are in sales, we know this.
Sometimes you just have to give and get on things. So maybe if the hotel comes back with a dynamic rate, you go back and say would you be open to giving me a fixed rate if I conceded on some of the amenities? And the reason I say that is, is amenities while are wonderful right to have in your hotel program, they're incredibly impossible, if not impossible to audit. You don't know, you don't know if travelers took the breakfast. You don't know if they benefited from some of those things you negotiated. And obviously there's a cost to that for the hotel to offer. So maybe you give on a few things and then they can move you over into a fixed rate. We've seen some customers do that and it's been effective to do that as well. So those are a few ideas.
[00:12:01] Speaker A: That's a great idea actually because you really can't audit that unless you're asking your travelers to let you know after each trip and then who's going to use what kind of data there to that degree. So it's unrealistic from that perspective. So giving up possible amenities to try to get a fixed rate, even if it may be a percentage point higher than what you had the previous time, I think it's an excellent recommendation. So you've talked a little bit about technology.
Tell me a little bit more about how tech is playing into.
Let's start first with the hoteliers and then how the travel managers are using it or not using it to help them have more efficient processes.
[00:12:46] Speaker B: Tech is key for both sides.
So if you think about a hotel, a hotel needs the technology to process all of these RFPs. If we're talking about sourcing specific, they need technology from a rev management perspective. So they've got a lot they have to deal with on their side. Then you add in the whole guest experience technology piece, which is fascinating. But when we talk about RFP processing, we all know it can take a long time sometimes for those hotels to respond. And I do think it comes down to what their internal process is.
Right, because you may have a centralized system at a hotel for them to upload all those RFPs and get them out into the market, but you still got a market. You still have a local hotel person in Omaha who has to still respond to that and is the tech there for that local hotel to process things quickly. So I think the hoteliers definitely have some challenges on, on their side. And to be fair, if I were a hotel, I would be probably more concerned with the guest experience right now. Right. They got to keep people happy. They have to be innovative. And what happens when I check into that hotel and my whole experience there, I think the. The ability to process RFPS more efficiently kind of goes down the list, you know, and rightfully so.
So then when we think about the buyer side, it's fascinating, Tracy, that 50% of the people we meet with are still using spreadsheets.
It's amazing. And not just small companies.
We talk to larger, what I would call, you know, enterprise, where, you know, this is just the way that they've done it and they've got to, you know, what they feel is a really fast, efficient system. But, you know, what it does is it limits not only their time, certainly, but it limits the ability for them to gain insight into their program that just can't be done manually within there. So I think that embracing technology is important, even if it's in little bits into your program.
But, yeah, again, as I come back to, I like to Say this. It's, it is a very delicate ecosystem between all of us. I recently had a customer ask me, do we think hotels negotiations are going away? Have you ever had someone ask you that?
[00:15:21] Speaker A: Well, yeah, actually we have had somebody ask that because they feel that they're losing leverage if they don't have enormous volume.
[00:15:30] Speaker B: Yeah, that was the context of this as well. Why don't you, why don't we just all live in a percentage off and never have to negotiate again and call it a day.
But if anything, here's where I'll go back to the 30 years that you and I have been watching this and say, because of the uniqueness of every program, I personally don't see negotiations ever going away.
If I have a mandate, if I'm the buyer and my CFO says, okay, you have to stay flat, how am I going to do that if I don't have some leverage and I'm not out there proactively in the market trying to get the best deal for my company?
So I don't see them ever, ever going away. But you know, we have, we actually have a lot of SME accounts within the BTP platform and it's, it's been really encouraging to see customers get rates on, you know, less than 100 room nights a year. It can happen, you know, if you're, if you're thoughtful about the process, you're working with the hotel directly. Typically small accounts don't have NAMs, you know, and they, they see your brand and they want to work with you, they want to see your travelers. It's not impossible to get negotiated rates if you're a small, a small company.
That's a large part of the ecosystem, especially in the United States or small businesses.
So hotels want that business, they want that business traveler staying at their hotel.
[00:17:05] Speaker A: And I think also for those SMEs, because this is a really key point in that they think that those relationships are so important with those regional properties.
I have my headquarters in this small town, so I'm going to have this property that's going to be my primary hotel and they build a relationship and then that person leaves the next quarter. And so it's kind of like not a one and done situation.
And everything that I've been seeing about BTP automation is just really responding to that problem. There's such a high turnover, there's so much volatility in the market.
Doing an RFP one time a year just doesn't seem to be the right way forward.
So I'm going to Go ahead and give you a little bit of a platform now to tell us how you're changing the game. How are you really changing the game of Hotel RFPs for any size corporation?
[00:18:04] Speaker B: So really it starts with, as you said, it's not a one and done. You can't, in our humble opinion, launch a hotel program, finish it up four months later, and then walk away and start it all over again seven months later. You're missing opportunities.
One, to monitor your spend for news sourcing, right? If you all of a sudden have a spike in a market where you have more room nights going in there that potentially you could negotiate now, why would you wait until August to initiate that?
All that time between maybe January to August, you're missing that. So what we call that is continuous sourcing.
It is about 24, 7, 365 monitoring your hotel spend to make sure that you're identifying new sourcing opportunities one, as well as making sure your rates stay competitive.
Because things can change, right? You could get five months into your hotel agreement, and what if you're not competitive anymore on your agreement?
So it's helping our customers identify that as well.
So when we talk about kind of turning it on its head, the continuous sourcing is probably the biggest piece of that and saying, listen, this is software, this is tech. Let's make sure it runs all the time, right? And it's more than just delivering an rfp.
It's the whole process around that and the rate auditing and just the strategy and using agentic AI to push your program to new levels and understand what's going on with your travelers versus you. Trying to have to figure that out within there. So I think in the end, though, it all comes back to that traveler experience. Let's go back to the hotel leakage. Why do travelers jump out of online booking tools? Well, maybe it's because they don't see enough about their preferred hotel program or it's the rates aren't showing or they don't feel like they're competitive enough. We're enabling our customers to make sure that what does sit in that booking tool is the most competitive and travelers will book it there if they see it. So traveler experience is always first and foremost in everything all of us do in business travel.
Doesn't mean anything if the traveler doesn't have a good experience. And we have a little part in that, I think, of making sure that when they go to book that hotel and their booking tool, they're having a good experience and seeing what they should see.
[00:20:53] Speaker A: And shouldn't the travel manager also have that good experience and not have to be dreading that season of RFPs as we started out with? I mean, let's really talk about their experience. Let's make it better, let's make it more efficient, let's make it more profitable. Let's give up those 30 hours per property that you mentioned, and let's find a way to incorporate new ways of thinking about hotel RPs. So I have one last question for you relating to this continuous sourcing, because this is a relatively new concept and not only do travel managers need to get their heads around it, but how receptive are the hotel properties, franchises and brands to this?
[00:21:36] Speaker B: They're very receptive and for two reasons. One is that we're doing it thoughtfully and backed by data.
So this is not every week we're trying to renegotiate somebody's rate that they spend time negotiating. That's not it at all.
But when it does happen within our platform, we do it with data. You know, are the room nights still where they need to be? Is, is the, the, the increase or the difference between what the hotel is now performing at versus our customer? You know, we put thresholds in there. So it's, it's not a matter of over soliciting the hotels because I think I'd have a revolt on my hands if that were happening. But I like. What I like to explain to our customers. Customers is think of it as an insurance policy for your hotel program.
Just you go about your day, you do what you have to do. We're going to watch your hotel program and make sure that your rates stay competitive. We could go six months and never find a situation that's not a bad thing. Right. That means your hotel partner is keeping their commitment. The rates are, they're aligned. You negotiated really well.
That's okay. There's nothing wrong with that. But think about how much time it would take for someone to monitor that manually.
Right. It's impossible for someone to do that. So, yeah, that insurance policy that we give customers kind of back. I'm sorry, back to the hotel piece. Right. So we do it thoughtfully, but we also have incredible hotel partnerships.
They are essential to what we do here, and we take that relationship very, very seriously and making just their experience as good as possible. We have an incredible feedback loop from all of the chain partners telling us what they love. What could we do better? And maybe that's part of the startup mentality, that you are just obsessed with feedback because you're building something and you want to make it as good as possible for everyone who's going to touch that. So the feedback loop is really important, too.
[00:23:56] Speaker A: Well, we're super excited to be partnering with BTP Automation. I mean, I can't wait to get this kind of kicked off and shared with our clients. It's going to be a really exciting time for all of us and our clients at Travel Incorporated, as well as what you're offering to the industry as a whole. So kudos to you, your company, your insights, and with that, you know, we're wrapping up. So if you had a takeaway or two for our listeners, what would that be?
[00:24:26] Speaker B: Be open to new ideas.
You know, I've had a lot of people ask me, you know, who's your biggest competitor in the market? And honestly, I say change.
It's not another tech platform. And it's just about the opening, opening up a dialogue to look at your hotel program a little differently and, you know, openness to take some things off of your plate and let the technology do that. I would say that that is one. And the next is just have some fun with this right as you opened up, you know, does it really have to be this way? Does hotel sourcing have to be this painful? It. It doesn't, you know, and let's find some fun in it and make a great experience. To your point, to our travel managers who really, this is something that's been on their plate for a long time.
I'm sure that they dread it every year and think, oh my gosh, the next four months of my life, what am I doing with this hotel program? So giving them some love, as you said, right in helping them too.
[00:25:35] Speaker A: That's awesome. Again, thank you so much for being with us today and thanks to our listeners for joining us on this episode of your Window seat.
Travel Incorporated is so grateful for everyone's attention to these podcasts, for our great guests that join us and we encourage you to think differently and to learn more about BTP Automation and here at Travel Incorporated, what we offer our clients to assist you in your process, whether it's hotel benchmarking, data information and just consultation to help you through your program, wherever you are in your hotel art piece.
So we thank you for this day, we thank you for all of our listeners and as always at Travel Incorporated, safe travels.
