As corporate
travel rolls into 2018 with all engines powering full speed ahead, it’s worthwhile
to take a step back and consider which travel procurement category the coming
technology might impact the most. My guess is that the hotel RFP process
finally is about to get a serious shake-up and might even be removed completely
from the playing field for the brave buyers who dare to think different.
Considering
the inefficiencies associated with the current hotel RFP, it’s surprising that
procurement experts continue to execute the same game plan every year. Many
programs have even acknowledged the failure by creating a rate-audit process
that effectively is designed to highlight how often the RFP process fails to
deliver the expected result.
Imagine a new
world in which a smart contract calculates and assigns the correct hotel rate
regardless of how the booking was made and through which channel it was made.
Furthermore, the smart contract will use dynamic and flexible parameters to
calculate the price and provide both the hotel and buyer real-time access to a
single data set showing number of room nights purchased and price paid at any
given time, without waiting for other service providers to prepare the data for
analysis.
This fantasy
soon will be a reality, as blockchain-based smart contract services on demand
make their way into the corporate travel industry. The biggest benefit created
by a smart contract is that the price is guaranteed; nothing can prevent the
correct price from being applied once the booking has been made. However, there
are other significant advantages, including the ability to get extra discounts
based on daily, weekly or monthly room-night consumption; method of payment; or
number of travelers staying in a property on a given night. Today’s
distribution models can make use of none of these discounts without significant
manual work and thus errors that then create the need for additional controls.
In a blockchain-based world, however, these not only are possible but also
quickly will become the norm for advanced buyers. The implications are
dramatic. Imagine a hotel account manager confronted with an important customer
saying he or she will require support for smart contracts in order for the
hotel to remain in the program.
Even better,
this can be achieved without involving the global distribution system and
travel management company. These traditional pillars are reduced to potential
booking channels while the price and payment are managed by the smart contract
with an automated audit trail.
What do you
think? Will you keep the hotel RFP alive for nostalgic reasons, or move into
the future?