RFP (Request for Proposal)

An RFP (Request for Proposal) is a formal bid document that a corporate travel buyer, travel management company, or group/meeting planner sends to hotels asking them to submit rates, availability, and terms for a block of future business — typically annual corporate negotiated rates or a specific group/event. Hotels respond with a proposal covering rate, cancellation terms, concessions (free upgrades, complimentary meeting space, attrition allowances), and any value-adds, and the buyer selects among competing responses.

"RFP season" refers to the annual cycle — heaviest roughly August through November in most markets — when corporate accounts renegotiate the coming year's rates ahead of budget cycles.

Example

A consulting firm sends an RFP to 40 hotels in cities where its consultants frequently travel, asking for a fixed annual rate, last-room-availability guarantees, and a cancellation deadline. A hotel wins the account by proposing a rate 15% below its projected BAR in exchange for guaranteed volume, becoming the account's LNR (Local Negotiated Rate) for that market.

Why it matters

RFP volume and win rate are leading indicators of a hotel's corporate and group revenue mix for the following year. Revenue managers weigh RFP rate requests against forecasted unconstrained demand and displacement risk — accepting too much low-rate negotiated business can crowd out higher-yielding transient and OTA demand during peak periods, while too little corporate business leaves a hotel exposed to demand volatility. Sales and revenue teams typically collaborate closely during RFP season to set floor rates and volume caps by market segment.

Related

See [[LNR (Local Negotiated Rate)]], [[GIT (Group Inclusive Tour)]], [[Group Displacement]], and [[Consortia]] for related negotiated and group business concepts.