• Tips from a pro for getting to 'YES' on your RFP

    Tips for moving your proposal to the top of a hotel's stack. 

    FROM THE Winter 2016 ISSUE

Meeting demand in Colorado is at an all-time high. Statewide, hotels
are feeling the impact of the continued hot sellers’ market. Due to record hotel
occupancy and average daily rates, hoteliers can be choosy and are turning down
three meetings for every one they accept.


Industry surveys reveal that one of the biggest challenges for hoteliers is receiving incomplete request for proposals (RFPs), thus making it difficult to properly assess the value of the meeting. Success today requires a strategic plan, and this starts with each RFP. Here are my tips to move your next RFP to the top of the stack.

» Total Hotel Room Block. This is the hotel’s biggest profit center at 77 percent average gross profit, so calculate the RFP response/proposal sleeping room and suite rates by your projected room block to understand total room spend contribution. Additionally, track spend by individual hotel and chain, and use consolidated revenues to maximize and leverage negotiation success.

» Peak Night Pattern. All hotels use pattern selling, by market segment, to maximize occupancy and revenues. Determine if your peak night pattern is in sync with the hotel’s expectations. Sometimes shifting your pattern by a night or two can enhance your RFP value and save 10 to 15 percent off group rates.

» Rooms-to-Space Ratio. Hoteliers assign a portion of total sleeping rooms inventory for transient business (corporate and leisure guests) and the remaining inventory for meetings. Meeting space is used to sell group room inventory, and the hotel will assign space based on your group sleeping room commitment.

» Food & Beverage. This is the second biggest profit center for a hotel at 38 percent average gross profit, so the hotel will want a guaranteed food and beverage amount in the contract. From your RFP agenda, calculate all F&B events and use average menu pricing, not including tax and service charge. Ask your sales contact what F&B expectations are for each set of dates and if your amount is higher, which helps the negotiation process.

» Season. If you are conducting a domestic or international search, you will encounter high, shoulder and low seasons, which will impact negotiations strategy. In Colorado, there are seasonal trends at city, suburban and mountain destinations, and it is important to evaluate demand over each set of dates and use this as part of your negotiation plan.

» Ancillary Revenues. While the hotel group sales focus is on sleeping rooms and F&B revenues, other ancillary revenues are important, so track historical and projected revenues for audio-visual, production, technology, business center, golf, spa and more. These revenues can be combined with your projected sleeping rooms and F&B contributions to strengthen and leverage your negotiations.

Don’t be discouraged by the current hot sellers’ market, but instead think like a hotel revenue manager and have a strategic plan for each meeting. Regardless of the current market conditions, one thing rings true: When meeting planners carefully evaluate each meeting, utilize a strategic RFP process, assess their leverage and have a negotiation plan, they will enhance their RFP success and add more value to their meetings and bottom line!

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