For most small and medium-sized hotel businesses, corporate customers with large accommodation volumes are inaccessible. It's a different story for hotel partners of HRS Group: They have the opportunity to participate in invitations to tender without major time and effort. And for the best ways for them to draw attention to their business: HRS expert Björn Nilse has some tips.
TEXT: Astrid Schwamberger
Who would have thought it? In hotel procurement, corporate customers do not just focus on price alone – "that is the biggest misconception of all," says Björn Nilse, Director Hotel Solutions at HRS Group. Factors like location and included services are also decisive for who comes out the triumphant winner in the bidding wars and can boast a fixed, commission-free quota of room nights – which can be booked on all channels.
Individual hotels can definitely score against the chain hotel sector in this area. Firstly, because they do not have a franchise structure, they can generally offer less expensive rates. However, private hotel businesses also frequently underestimate the fact that a growing number of corporate customers have an eye to the total cost of trip, and thus all the costs that are generated during a business trip. And consequently, alongside the price, the "background noises" are indeed taken into account as well: Parking, Wi-Fi, breakfast and location. And if the cheapest hotel demands €20 for parking and €5 for Wi-Fi per day, or if it is situated further away from the traveller's destination, and thus requires taxi rides, then the hotel that end up being the most attractive option could be the one that has a higher rate, but in return offers numerous additional services and a more convenient location.
Before a corporate customer reaches a decision in favour or against a hotel, HRS carries out a lot of preliminary work: concludes contracts with the corporate customer, conducts a requirement analysis and puts together a set of hotels which fulfil these requirements. "There are two pots," Björn Nilse explains this stage of the sourcing process, which HRS uses to relieve corporate customers of the hotel procurement process and thus endeavours to retain them as customers. Hotels that get put into the first pot are those that that particular corporate customer prefers, which whom he may have already worked before and from whom he would like to get a new offer, Nilse explains. The hotels that go into the second pot are those that HRS recommends because they fulfil the corporate customer's requirements. "Out of 100 hotels that are available in a city, maybe 20 or 30 are suitable," Björn Nilse estimates. For example, if a corporate customer brings 10 hotels into play, HRS selects a further 10 that fulfil the criteria and invites them by email to tender a request for proposal (RFP), meaning to submit an offer.
Basically, all hotels that fit the corporate customer's portfolio and have a contract with HRS Group could participate in the sourcing process. Well: almost all. "To be fair, I have to say that we are usually unable to take very small hotels into consideration for large-volume contracts," Nilse admits. In this case, it is simply a question of whether the business with the major customer can really be accommodated by the hotel.
Apart from sufficient capacity, hotel businesses need one thing in particular in order to get to the preselection stage: good content. That means: informative, high-resolution photos and up-to-date details. this includes information about whether breakfast, Wi-Fi and parking are free or not; but also the reception opening times as well as correct information about distances. "The more specific this information and the location are specified, the easier it is for corporate customers to do their calculations," says Nilse. Because the results show whether employees would be able to reach their destination on foot or have to take a taxi, he says.
Furthermore, free Wi-Fi is also "extremely important to corporate customers," Björn Nilse emphasises. Because even if a service hikes the invoice by only €5 a day, it would generate tangible additional costs at a volume of 1,000 room nights a year.
Hotel partners with good reviews and reputation management also have a good hand to play here. "Travel managers are required to accommodate their business travellers in hotels that have appropriate ratings," Nilse knows. That is why he advises hoteliers to keep an eye on guests' comments and also to address any criticisms.
Thus hotel partners can "cut a good figure" in the sourcing process in two aspects: On the one hand, they can draw attention to themselves in order to be selected by HRS. However, in addition, they can also position themselves as attractive when submitting a bid on the RFP platform in order to set themselves apart from the competition and increase their chances of being chosen. Because apart from included services, prices and type of rates are also important in this regard: Last room availability rates, trade fair rates, black-out dates. During the entire tender process, they can see what their competition is offering, anonymised – and readjust accordingly.
Thus the prospect of landing a heavyweight, maybe even an international corporate customer, is only a few clicks away for small and medium-sized hotel businesses. And Björn Nilse adds another, additional benefit: "The resources that they save because they don't have to conduct any time-consuming sales negotiations can be reinvested in the core business again."