RFP or Real-Time Booking? Where is the Cutoff for Meetings Automation?
By Michael Boult President & CEO, StarCite, Inc. | January 14, 2010
Real-time, seamless, transactional booking is the future of small meetings. Unlike the transient side of hospitality and because of the inherent complexities associated with group business, the meetings industry has struggled to provide buyers and suppliers with frictionless booking capability. Changes are on the horizon, but we still remain in the infancy of booking meetings in real-time.
Real-Time booking for meetings is a concept that is new to both planners and sales managers. To gain acceptance, there are various psychological, technological and business practice barriers to overcome, similar to those that were crossed as the industry moved to adopt online RFPS for large meetings. Online RFP adoption is accelerating at an amazing rate, and now eRFPS and online lead management tools are considered standard protocol in the industry a little more than eight years since their inception. While eRFPs work well for larger and complex meetings, the process is far too cumbersome for millions of smaller meetings. A different solution is required to enhance the sourcing process and to create greater efficiency for both buyers and suppliers.
The natural place for real-time booking to start is with small meetings. In fact, on a very limited basis, real-time booking is already taking place. Savvy meeting planners have realized that they can bundle together blocks of transient rooms that are available to be searched and booked via the GDS. Searching the GDS for open blocks of rooms is how most of the new leisure focused online group sites are working. These sites are mostly targeted toward the sports teams, religious events or family reunion planners and can "knit" together an otherwise cumbersome user experience. As my mother might say, "cheap and cheerful" versus the alternatives currently on offer.
There are also several supplier led efforts. Hilton reported recently in Hotels Magazine that group bookings of 25 guestrooms or less represent about 60% of incoming group sales leads and that it has booked 800 meetings online with its online solution, e-Events. The company predicts that over 12,000 meetings will be booked using e-Events during 2008. Approximately 42 percent of the RFPs flowing through StarCite represent meetings of 50 total room nights. However, we know from our clients that the majority of their demand in this segment is still handled offline.
The increased electronic booking trend is highlighted by PhoCusWright in its "Groups and Meetings: Market Opportunity Redefined" report. "Smaller, simpler groups and meetings are on the rise in both the leisure and corporate segments. Because these tend to have fewer variables, they can be moved online with the entire business being transacted - from contract to bookings - without the need for a request for proposal." The report predicts that by 2008, the online penetration for groups and meetings will be 41% of all groups and meetings. 2008 is fast approaching and our level of activity has never been greater, but it is unlikely that this level of adoption for real-time booking for meetings can be reached for many years to come. It isn't the will that prevents this from becoming reality, it is the way of thinking that must change.
For hoteliers, any real-time meeting booking solution must work in conjunction with hotel revenue management systems to bring real net gain to the hotels and help execute effective distribution strategy. Each hotel has a finite amount of meeting space which is a valuable commodity that is used to leverage greater group room revenue. Hotels often describe a reluctance to pay typical commissions for third parties bringing this business to the table. This approach might be a case of "penny wise, pound foolish", given what was shared during a recent meeting with a global hotel brand. The head of sales acknowledged that the "analog" process currently employed by their on property sales team was calculated to cost $200 per enquiry and $1,200 for every actual meeting booked. For a typical meeting of 10 people, that cost represents a cost of sale of between 30%-40%!