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The Importance Of RFPs To Increase Corporate GDS Business

JodyP 2 December 2019
The Importance Of RFPs To Increase Corporate GDS Business

By Mark Lewis, CEO and Founder, HotelREZ

The Global Distribution System (GDS) helps generate billions of dollars in global travel sales year on year. Independent travel agents, online agents and travel agencies all use a GDS to search for the best available travel and accommodation rates for their clients. Being represented in the GDS with a specific chain code is thus crucial for hoteliers in order to stand out from competitors.

The GDS is particularly important when it comes to receiving business from corporates, as many large companies use it to manage their travel expenses. During the ‘RFP season’ (July-September) every year, travel managers send a request for proposal (RFP) bids from corporate clients, such as IBM or Vodafone. Hotels around the world compete for this bid to attract more corporate business.

While corporate bids are extremely lucrative, RFP submission can be an overwhelming process for hoteliers, especially for independent properties that may lose to competitors from larger, branded chains. It is important that these properties use a clear hotel RFP process and utilise this to aim for new corporate business.

Why corporate RFPs are important?

Corporate RFP bids, particularly solicited ones, are a goldmine for hotels. A solicited RFP refers to when a GDS agency or corporate company has specifically requested a pricing proposal from a hotel for their corporate travel programme. There is an increased likelihood of this if the company is aware of, or in close proximity to, the hotel. Corporate travellers are excellent customers as they are more likely to use other hotel services, such as the restaurant and spa, which increases incremental spending per room.

How to get more corporate business:

If an independent hotelier wants to respond to a solicited bid with a pricing proposal, there is a certain submission process they need to go through – one that can be quite complex and time- consuming. RFP representation agencies build thousands of agreements with global TMCs (travel management companies), consortia’s and agencies, in order to receive centralised RFPs on behalf of their clients, removing the process complications for independent hoteliers.

Once an RFP is received, hoteliers can choose to submit the information requested, which the corporate client then reviews to assess if the independent hotelier meets their criteria. If an application is approved, automated rate services allow clients proposed rate to instantly load on the GDS, avoiding frustrating loading times for bookers.

Solicited RFPs are notable, however corporate RFPs can also be unsolicited, meaning that RFP requests do not come directly to the hotel, but rather that they need to go out there and find them. This is another way in which representation agencies can help independent hoteliers to manage unsolicited RFPs, checking which corporate companies are booking through a GDS agency in close proximity to the hotel and contacting them directly to request the property be considered if it isn’t on their official RFP programme.