If you’re a hotelier, you know how important group business is to the bottom line. You need to fill your rooms and space regularly and profitably with the best pieces of business.
The best way to achieve these goals is to evaluate and respond to the constant influx of digital RFPs—every single one of them.
But the hotel industry has a serious, longstanding problem: RFP response rates are dismal.
Based on recent Groups360 industry analysis, the average response rate is approximately 45%.
Out of every 100 RFPs planners send to hotels, 55 are completely ignored.
Nonresponsiveness is not just detrimental to hotel revenue but also to brand reputation among meeting and event planners seeking to book rooms and space. These days, planners have to source 10-20% more properties to secure enough responses to choose from.
As longtime hotel executives ourselves, we believe every lead is a good lead. Every RFP is an opportunity to build relationships and generate revenue. This is an essential mindset executives need to instill in their sales teams.
By responding to all of the RFPs you receive, you significantly increase your hotel’s revenue opportunities, you can be more strategic about securing the best pieces of business, and you maintain goodwill with the meeting and event planners waiting on you to answer in a timely manner.
Leads are money on the table
Imagine someone introducing you to a planner, who tells you they’re interested in learning about your property and possibly booking a group. Would you ignore them? Waive them out of your office?
Of course not. So why do leads get ignored? A lead is a planner who hand-selected your property and asked you to bid on their program.
Most salespeople would assert that they do, in fact, respond to every lead their hotel receives through the various channels—hotel lead catchers or GSOs, e-RFP platforms, lead distribution systems like MeetingBroker and direct planner communication.
But the response rates and feedback from planners say otherwise.
Three common reasons hotels don’t respond, and why you should
1. We’re too busy
Say there’s a bag of money sitting on the side of the road. Would you be too busy to stop and pick it up?
That pile of leads is a potential bag of cash. If you’re looking for business, the easiest sales call to make is to answer the phone that’s already ringing. You may find it hard to make time to respond to leads, but you’re guaranteed to lose prospects if you don’t.
Some leads require more effort than others. In our careers, we’ve worked with salespeople who would let a complex lead age for weeks—or worse, they simply turned it down because it was the fastest response.
Remember, today’s lead is tomorrow’s business.
If you’re too busy right now, you won’t be busy enough later. By responding to RFPs on an ongoing basis, you keep your pipeline flowing.
So, carve out the time. Or pass the leads to someone in your organization who can. Your director of sales or general manager, who are deeply invested in the hotel’s success, can (and should) help create or adjust processes to make them smoother and more efficient for the sales team.
Salespeople have a responsibility to answer leads. Sales managers have a responsibility to ensure leads aren’t falling through the cracks.
As directors of sales, we pulled reports to evaluate the status of leads coming into the hotel. We urged our salespeople to follow up promptly, and we investigated when a good piece of business was inadvertently turned down. As corporate sales executives, we urged our hotels’ DOSs to do the same thing.
This is not about babysitting your team—it’s holding them accountable to the KPIs associated with getting responses out the door.
Responding to RFPs for larger meetings requires more effort, but the amount of work you put into a bid is usually commensurate with the reward when you win it.
2. We rarely win the business anyway
An even more dismal percentage than response rates are conversion rates. On average, hotels have a 3-7% chance of being awarded a meeting planner’s program.
We get it. Why put in so much effort for so little reward? But here’s the thing.
You can’t win business you don’t bid on.
If you don’t respond to a lead, your chance of conversion is 0%. You’ll lose money to a hungrier hotel.
Among the hotels that do respond to leads, the vast majority are turning down the business due to lack of capacity or availability. If you can accommodate a group, then by offering a sufficient response you increase your chance of winning the business exponentially.
Respond to everything—and ideally within a week or less. You don’t know if you’re one of 30 hotels in the running or one of 10. Given how few hotels answer RFPs—and how many of those responses turn down the business—you increase the probability of making the sale by being one of those who do.
Then there are the times you consistently bid and still don’t win. Let’s say the same planner sends you an RFP every year. You respond, but you’re never chosen, so when the next inquiry comes around, you simply set it aside.
The better approach, however, is to reach out to the customer for feedback—why are you requesting bids when you consistently choose another hotel? It becomes an opportunity to invite them to visit so they can experience your property’s events directly.
3. We’re already hitting our numbers
In our experience, there are salespeople who will bid on any piece of business because it populates the calendar and helps them meet their sales goals.
Sales leaders might be tempted to shrug their shoulders about whether their team is clearing the RFP queue or responding promptly. What does it matter? We’re hitting our numbers. But this is a short-sighted perspective.
If you were struggling to make your numbers at the end of the month, you’d be responding to every lead. The best approach to ongoing success is to view every lead as if you’re struggling to make your quota.
Consider also the optics on the buying side. Perception is reality. If you don’t respond, a planner may assume you don’t value the opportunity. You not only lose out on the current opportunity to bid but quite possibly on any future opportunity as well.
If you answer every RFP, planners are more likely to source you again later on because you’re one of the precious few who paid attention to their request.
Automate your group booking process
Low staffing levels have been another longstanding problem in the hotel industry, exacerbated by the effects of the pandemic. This is especially challenging for smaller hotels—the same ones being inundated with the bulk of planners’ RFPs.
If you’re a general manager of a limited-service hotel, you may be spinning a lot of plates. You’re not only fielding sales calls but also checking in guests, maybe even stripping beds.
The best solution for smaller hotels is to automate group bookings.
Online group booking platforms like GroupSync™, are one of the many ways technology is filling in the gaps in hotel operations.
The process of booking small meetings is much like order taking, with a lot of wasteful back-and-forth communication over details. The more hotels move their group bookings online, the more they will free up their sales departments to get their arms around the volume of RFPs and maximize the effectiveness of their sales processes.
Hotels of all sizes—from global hotel brands to independently owned properties—are benefiting from this revolutionary approach to group bookings. Online group booking allows hoteliers to pick and choose what and how much to offer to planners for immediate purchase.
And with GroupSync, planners are finally able to purchase rooms and space online the way travelers have been booking hotel rooms on OTAs for years.
This completes part 1 of our 2-part article series. For more info on GroupSync, and how to automate your hotel’s group booking process, connect with us here.
Click here to read part 2 of our article series, ‘How turning down an RFP can still bring in business’.