How does the RFP process on GDS work for your hotel?

Many hotels use GDS to attract new business clients and work with them efficiently.  

One way to acquire more key accounts is to participate in RFP processes.  

Find out how you can use these processes to increase occupancy at your hotel and the roles which GDS play in this process. 

What is an RFP? 

The abbreviation RFP means "Request for Proposal". It refers to a request for a project or cooperation.  

In the hospitality industry, RFPs involve partnerships between hotels and key accounts that agree to fixed room allotments at specific prices and terms.  

The negotiated reservation conditions for clients are usually more favorable here than from public sources, such as the hotel website or OTAs. The reason for this is that this does not involve individual room bookings, as it usually refers to an extensive volume of reservations over a period of several months. 

The request season occurs yearly from the end of June until September. During this period, major corporations, travel agency networks (also referred to as consortia), and travel management companies (TMCs) procure new hotel partners for the coming year. Existing contracts are also often revised and renewed during this period.  

For this purpose, these companies create RFPs, collect requests from many candidates, and select those whose terms, prices, and services are the most appropriate. 

How can your hotel acquire more RFPs? 

The method which you have the most control over is active sales. This is where your sales team is required. It can present your hotel to new and attractive potential clients, increasing the likelihood that you will be involved in the next round of requests. This is where it pays to be proactive and schedule face-to-face sales visits, especially with relevant companies within your area.  

However, platforms such as Lanyon and Cvent are also important for the acquisition of RFPs. This is where companies post their RFPs to solicit as many responses as swiftly as possible from the various hotels. If your profile matches an RFP, you will receive a request to submit a bid. Since the GDS are linked to RFP platforms, it is worth completing your hotel profile and including all of the important data so that you can be notified of and participate in more RFPs.  

How to secure the contract 

1. Carefully read the partners’ conditions and requirements 

Start by clarifying the following items: 

• How many rooms does the client require per day/week/month? 

• What prices are they prepared to pay? 

• Which cancellation conditions are required? 

• Are there any additional requirements? 

If these requirements appeal to you at first glance, and if you might even be able to offer the client more than the competition (e.g. you are closer to the airport, have a more extensive selection of restaurants selection ...), proceed to the next step. 

2. Profitability analysis 

You now need to consider whether this business is worthwhile for you. For this purpose, calculate how much revenue you could generate from this partnership and the effort or costs this would entail for you. To enable you to make an informed decision, for example, you can request data on the client´s actual booking behavior in your market via providers such as Agency360+. This provides you with a realistic assessment of the revenue potential.  

3. Elaborate on your own conditions 

If you decide to continue to participate in this RFP process, it is time to prepare your bid. You will need to ask yourself the following questions: 

• How many rooms can you offer at the requested price? 

• Which blackout dates (i.e. during trade fairs) would the client be required to accept? 

• Is this preferential price subject to any additional conditions? 

4. Prepare the bid, send it off and conclude a contract with the client 

As you will have many bids to write, especially during the RFP season, it is worth using RFP tools. This enables you to keep track of everything, store all of your information in one place, and swiftly respond to new tenders.  

After conclusion of the contract 

After you have secured the contract, your work is far from over. You now need to upload the special prices, availabilities and conditions to the CRS as swiftly as possible and activate them for the GDS. Only then your client will be able to access the rates and place bookings via the GDS.  

To get the cooperation off to a good start, it is important not to keep your partner waiting at this stage. If you don’t have enough time to feed all the data into the system manually, use a technology solution to support you.  

After a few months, or at the latest when the contract is renewed, it is important to analyze the data for this cooperation.  

Ask yourself the following questions:  

• Was the promised booking volume achieved?  

• What was the actual revenue? 

• Did any problems arise during the cooperation? If yes, what were they and what was the cause? 

• Is this business arrangement worthwhile? 

This information is important for next year's negotiations and enables you to focus on the most profitable partnerships.  

Now you are familiar with the basics of the RFP process and it’s your turn to give it a try.  

Develop a sales plan together with your team and proactively schedule visits to potential clients.  

Optimize your hotel´s profile on the RFP platforms and GDS so that you are informed about new requests and gain the interest of new partners of your hotel with your offers.