AMSTERDAM -- Panelists participating in the "Agency RFP
Process/Global RFPs" seminar at the Association of Corporate Travel
Executives conference, held here Oct. 23 and 24, agreed the process
is complicated and time-consuming by its very nature.
However, the consensus was that there are ways to make the
process a bit more palatable.
A global RFP (request for proposal) is a document written by a
corporation and submitted to a travel agency when the corporation
is searching for an agency to handle its global travel needs.
A company often requires a global travel management program when
it operates offices in more than one country.
Toby Joseph, vice president of strategic sales for Europe, the
Middle East and Africa at Carlson Wagonlit Travel, said Carlson is
"hit with RFPs on a daily basis."
"We're at 85 now," said Joseph, "and we're looking at each one
to decide whether to bid or not."
Agencies must be selective because responding to an RFP is a
long, expensive process. Panelists offered a wide range of figures,
from $25,000 to $250,000, as the cost for responding to an RFP.
Generally, the larger the account, the more expensive the bid
preparation becomes, they said.
Joseph said Carlson spends $25 million to $30 million per year
on RFP responses. He added that some of the RFPs his agency
receives are "facades."
Specifically, he said corporations have been known to submit
inaccurate or incomplete travel data.
And if a bid is won and the ensuing travel policy is based upon
inaccurate data, the corporation could fall short of the benchmark
set by the agency -- meaning that the agency is not getting the
business it expected.
In that case, the subsequent renegotiation will cost both
parties more money. All panelists agreed that extensive
communication and trust between parties is the solution to making
the global RFP process more fruitful.
"Time must be taken in advance to understand the culture of a
company's travelers, to understand if people can take advantage of
what's out there in the market," said Ron DiLeo, senior vice
president of North America at Rosenbluth International.
For example, a corporation should not roll out an Internet
self-booking product companywide unless it is committed to
generating enough on-line transactions to make it economically
worthwhile, said DiLeo.
John Caldwell, president of Caldwell Associates, a travel
consultant company, said going above and beyond the written RFP can
pay dividends for corporations.
He cited the example of a Denver-based company that hosted
"pre-bidders conferences" with a few travel management firms.
"The company asked [the travel management firm] to just listen
to what they were interested in," said Caldwell. "Then they said to
come back with a proposal."
Such back-and-forth dialogue enabled the company to "get real
answers to their questions," said Caldwell.
Organizing such meetings costs travel and entertainment money
for both parties, but the expense and time spent are well worth it,
said Jim Lennon, global travel leader for PricewaterhouseCoopers, a
professional services firm that spends nearly $600 million per year
worldwide in air fares.
"There are inherent costs you can't get around [in the RFP
process], if you want to get the apple from the tree," said
Lennon.