Introduction
When it comes to sourcing hotels for corporate travel, travel managers have more options than ever before. Historically, the process centered around traditional hotel RFPs-a structured, annual event where corporations invited selected hotels to submit bids for their business. But in today’s dynamic travel environment, competitive bidding models are reshaping the landscape.
The difference isn’t just procedural-it’s strategic. Traditional RFPs provide structure and long-term stability, while competitive bidding delivers agility, transparency, and the chance for hotels outside the initial solicitation list to win business. For travel managers juggling cost, compliance, and traveler satisfaction, understanding the strengths and limitations of each approach is essential.
Modern tools like ReadyBid have merged the best of both worlds, enabling buyers to conduct hotel rfp programs with competitive bidding functionality built in. This ensures travel managers maximize savings while reducing the time-consuming inefficiencies of legacy platforms.
In this blog, we’ll break down the differences between competitive bidding and traditional hotel RFPs, highlight their pros and cons, and explain how automation makes the process better for everyone involved.
What Is a Traditional Hotel RFP?
A traditional hotel RFP (Request for Proposal) is a structured process where corporations or travel management companies (TMCs) identify hotels based on travel demand, office locations, and prior relationships. Invitations are sent to selected properties or chains, and responses are collected over weeks or months.
The process includes:
Data Collection - Past booking data, room nights, traveler preferences.
Solicitation - Sending RFPs to selected hotels.
Negotiation - Back-and-forth discussions on rates, amenities, and terms.
Final Agreements - Contracts signed and loaded into the GDS.
Program Compliance - Auditing to ensure the negotiated rates are honored.
Traditional RFPs are methodical, but they’re also slow and resource-heavy.
What Is Competitive Bidding in Hotel Sourcing?
Competitive bidding is a newer model where hotels not initially invited to an RFP can submit bids if they meet certain criteria. For example:
A company issues an RFP for hotels near its San Francisco office.
Alongside the invited hotels, other properties within the area that meet the company’s requirements (e.g., amenities, distance, star rating) are allowed to submit proposals.
This expands competition, giving buyers more leverage and hotels more opportunities. Platforms like ReadyBid pioneered this model by making it seamless for both sides.
Key Differences Between Traditional RFPs and Competitive Bidding1. Scope of Participants
Traditional RFPs: Limited to invited hotels.
Competitive Bidding: Opens the door to additional qualified properties.
2. Speed and Flexibility
Traditional RFPs: Slow, structured, and often once per year.
Competitive Bidding: Fast, agile, and can be run continuously throughout the year.
3. Data and Transparency
Traditional RFPs: Buyers often work with limited benchmark data.
Competitive Bidding: Provides real-time comparisons with broader market visibility.
4. Value for Hotels
Traditional RFPs: Properties outside the solicitation list have no chance to participate.
Competitive Bidding: Hotels gain access to qualified leads and can win business they weren’t originally considered for.
5. Cost and Efficiency
Traditional RFPs: High administrative overhead for both buyers and suppliers.
Competitive Bidding: Streamlined through platforms like ReadyBid, which automates distribution, reminders, and evaluations.
Benefits of Competitive BiddingFor Travel Managers
Increased Leverage: More hotels competing means better rates and amenities.
Expanded Options: Properties outside the original list may offer better value or convenience.
Continuous Sourcing: Adjust programs mid-year instead of waiting for the next cycle.
For Hotels
New Opportunities: Access to corporate clients that may not have considered them before.
Level Playing Field: Smaller or independent properties can compete with global chains.
Sales Efficiency: RFPs arrive pre-qualified, reducing wasted effort.
The ReadyBid Advantage: Combining Both Models
ReadyBid allows travel managers to run traditional hotel RFPs while integrating competitive bidding seamlessly. Here’s how:
Unlimited RFPs and Bids: Buyers can issue as many RFPs as needed, with no restrictions.
Competitive Bid Feature: Hotels meeting buyer criteria are automatically invited to submit proposals.
Bulk Negotiations: Buyers negotiate with all participants at once.
Automated Follow-Ups: Ensures both invited and competitive bidders respond on time.
Auditing: Verifies rates are loaded correctly after agreements.
This hybrid approach saves time while ensuring maximum competition and compliance.
Why Competitive Bidding Doesn’t Replace Traditional RFPs Entirely
While competitive bidding is powerful, traditional RFPs still play a role. For high-volume global programs, structured RFPs provide the consistency and contractual stability corporations need. Competitive bidding works best as a complement-filling gaps, adding flexibility, and keeping suppliers honest.
Think of it this way:
Traditional RFPs = Foundation of your hotel program.
Competitive Bidding = Optimization Layer that ensures ongoing savings.
FAQs: Traditional RFPs vs. Competitive Bidding
Q1: Do competitive bids cost extra?
With ReadyBid, hotels pay a small fee per competitive bid, but buyers do not. It’s a win-win, as hotels see it as a qualified sales lead.
Q2: Can competitive bidding work globally?
Yes. ReadyBid supports competitive bidding in all major markets worldwide.
Q3: Will competitive bidding overwhelm travel managers with too many offers?
No. ReadyBid filters competitive bids so only properties meeting criteria (location, amenities, price range) are included.
Q4: Is competitive bidding only for small programs?
Not at all. Both Fortune 500 corporations and mid-sized companies use competitive bidding to complement annual RFPs.
Helpful Resources for Travel Managers
Conclusion
The difference between traditional hotel RFPs and competitive bidding comes down to scope, speed, and flexibility. Traditional RFPs provide structure and long-term consistency, while competitive bidding expands competition and introduces year-round agility.
The smartest corporate travel programs use both approaches together-anchoring their programs with structured RFPs while leveraging competitive bidding to maximize savings and options.
With ReadyBid, you don’t have to choose. As the best hotel rfp tool and hotel sourcing tool on the market, it gives travel managers everything they need to save money, save time, and increase program compliance.
Book a ReadyBid Demo Today and see how both models can work for your organization.