ACTE research finds challenges with hotel sourcing

Corporate travel managers, increasingly frustrated with traditional approaches to sourcing hotels, are slowly supplementing their programs with newer, dynamic systems, according to research from the Association of Corporate Travel Executives (ACTE), underwritten by BCD Travel.

The findings come as technology streamlines almost every aspect of travel. However, for many corporate travel managers, hotel sourcing is stuck in the pre-digital era. The hotel sourcing paradox is underscored by the fact that, despite their frustrations with the manual and time-intensive process of seasonal RFP negotiations, most companies are nevertheless following that same pattern in contracting hotel nights for 2018.

The study, New Approaches to Hotel Sourcing, found that many corporate travel managers’ jobs continue to feature management of the resource-intensive annual RFP process. New approaches reveals that more than half (56 per cent) of survey respondents plan to source more than 50 per cent of their room nights via an RFP, and 29 per cent will use RFPs to source at least three-quarters of their rooms.

The traditional RFP-based hotel sourcing method seems uncompelling for many managers: Just over one third (38 per cent) believe it gives them the best ROI. Unsurprisingly, then, slightly more than two-thirds (69 per cent) indicate either unhappiness with the performance of traditional sourcing or a desire to change.

Sourcing hotels using an annual RFP is time-consuming, both for setup and ongoing maintenance. Fifty-five per cent of travel managers expect setup to consume more than 50 hours of their time, while 40 per cent believe maintenance will require more than 50 hours.

ACTE is seeing that institutional inertia can be a major problem across organisations, and the travel department is no exception. For many years, RFP-based hotel sourcing processes have been the norm with no viable alternatives. But travel managers now have access to newer, more cost-effective tools—and need to move away from the ‘this is how we’ve always done it’ mind-set.

AFTM members can view the complete ACTE New Approaches to Hotel Sourcing Research paper, as well as other ACTE Research, through this link.

Greeley Koch, ACTE Executive Director