GLOBAL UPDATE : MARKETING
Trouble electronic
WITH
RFPs
Even as they become the norm , electronic RFPs are struggling with plummeting conversion rates .
By Adam Kirby , contributing editor
In an economy where hoteliers are fiercely competing for precious revenue and frustratingly scarce group business , it might sound ironic to hear complaints about receiving too many requests for proposals from event planners . Turns out , there can be too much of a good thing .
Electronic requests for proposals ( eRFPs ), which only five years ago accounted for less than a fifth of planner inquiries to hotels , have become the most common RFP method . Like their consumer-facing cousins , the OTAs , third-party eRFP providers — StarCite and Cvent being the dominant players — have achieved overwhelming popularity with event planners due to their ease of use in searching for the best deals . A single eRFP can be sent to dozens of properties across multiple markets .
But the rise of eRFPs comes with a major downside for hoteliers . The time savings seen by planners amounts to a spike in time spent by hotel salespeople in responding to the eRFPs . And while the volume has increased , the actual amount of achievable business has failed to keep pace , meaning the conversion rate has dropped — in many cases by half or more .
Bob Gilbert , president and CEO of Hospitality Sales & Marketing Association International ( HSMAI ), says dealing with eRFP “ spam ” is one of the biggest challenges facing hotel sales staffs . Conversion rates of eRFPs hover around the 3 % range , Gilbert says , meaning hotels are investing a high labor cost without a lot of return .
“ It ’ s nobody ’ s fault necessarily , because the planners are just trying to shop a variety of destinations and hotels , and today ’ s consumer believes you can shop online and expect a fullfledged proposal back from a hotel , but there ’ s a lot of work that goes into that ,” Gilbert says .
Nevertheless , most planners recognize and are mindful of the time strain on hotels , says David Markham , cofounder of eRFP provider ConventionPlanIt . com . The
8 HOTELS October 2012 www . hotelsmag . com