Are AI-powered RFP Responses Really Good for Hotel Group Sales?

While the new tech might help hotel salespeople respond quicker, their pitches might not stand out

Like all hospitality conferences, most of the breakout sessions at the recent HITEC and HSMAI Commercial Strategy events focused on the use of AI for various applications. Although I already considered myself to be a pretty well-schooled, early adopter of integrating AI into sales, I definitely walked away with some great new ideas.

Yet while sitting in one particular session, which was about using AI to instantly respond to RFP inquiries with proposals, I started thinking about where the tech companies are leading the industry.

The presenter, whom I know and respect as a leading professional from one of the prominent sales CRM providers, was generously showing the eager audience how they can simply use Claude to immediately get in the game of automated response without a major tech investment.

There was certainly a lot of validity in the example he used, which was how a SMERF group inquiry arriving at 5 p.m. on a Friday would sit there all weekend, and most likely longer, until a busy hotel salesperson finally digs the inquiry out of a stuffed inbox on Monday.

Alternatively, as he demonstrated, AI can process the inquiry and respond almost immediately with a full proposal. Although this instant-response format seemed to be an obvious win, when compared to slower, human-touched sales responses, I was immediately tempted to raise questions about how that would work in the real world.

How would automated responses work if inventory was on hold, but near the end of the cut-off date? A human salesperson would recognize and factor in this nuance.

What would the response be if the buyer sent incomplete information?

Could AI handle the many other inconsistencies that most real-world inquiries present, such as the breakdown of bed types, billing needs, and inquiries that were asking for rates slightly lower than the revenue system calls for, but that might generate more ancillary revenue?

For now, let’s forget all those questions and assume that with the pace at which AI is learning each year, all these and other possible challenges could be resolved, and we end up with a world where AI does the full and complete proposal response in minutes.

If this starts to work, I imagine it would quickly be implemented by the majority of hotels in any given market, because — on the surface — who wouldn’t want to embrace this?

When I got to this place, my next question was what will this be like from the buyer’s side? To me, this may be the downside of full AI automation.

Let’s take another look at the HITEC speaker’s example of a buyer looking to book a SMERF group on a Friday at 5 pm. They visit three websites and (correctly) fill out three website inquiry forms. Within minutes, they have three proposals in their inbox, but lacking any human interaction, they are probably going to all look the same.

Now let’s imagine the buyer is either a professional, third-party meeting planner, or an in-house corporate planner, either of which might submit their RFP at sites like CVENT or a local DMO, CVB, or tourism website. Boom! Within minutes, the buyer now has six or even a dozen RFPs.

What will the auto-generated RFPs look like? How “personalized” will they be? Based on my experience with AI-authored sales solicitations I receive, the wording of the correspondence and even the design is going to be homogeneous.

In the long term, will a quick response alone help us gain market share or sell higher rates? On the contrary, I think it will lead to more and more buying decisions being made on price alone.

Think about what AI-generated proposals would actually be selling. Are you going to win it on “place?” Very few hotels have such an exclusive location. Product? On the surface, are your hotel rooms, meeting space, and public areas really that much different than the hotels in your competitive set? If you are an independent hotel, a boutique, a historic hotel or a resort, well then “maybe.” But even then, chances are good that the other area historic or boutique hotels are also similarly unique. If your hotel flies a core-brand flag, that “maybe” turns into a hard no.

Once AI takes away the P for people, and their unique ways to make emotional connections and win confidence, and with product and place being similar, the last remaining P is price. Rates that are increasingly set and managed by AI, fed by the same data.

What will be the end result when proposals all arrive instantly, generically selling hotels that on the surface look the same, and are priced the same? At best, a level playing field resulting in each getting only its fair share. At worst, there is a race to the bottom, where hotels sacrifice rate to gain occupancy.

So what should hotel leaders do in this time of disruption and change? Here are some suggestions.

• Look for every opportunity to keep people at the heart of hotel sales.
• Absolutely embrace AI-assisted automation but use it creatively.
• For simple inquiries, where AI can accurately generate a full proposal 24/7/365, let them know that a human salesperson will also be reaching out on the next weekday.
• Include a short, personalized video message with initial auto-responses to introduce the humans behind the machines.
• Pick up the phone! Even if you get voicemail, you will leave a human footprint on the sales journey.
• Use AI to personalize your sales responses. Train your favorite AI to fluff up your messages. Use it to add people into the generic empty meeting room pictures.
• Use AI to research your prospects and their events. Use this information to personalize the first few sentences of your first human-written response, to let them know it is not coming from a machine.
• Use a scheduling app such as Booking or Calendly to make it easy to connect for a call or video meeting.
• Encourage people to meet online and turn your webcam on!

Originally published in Costar News Hotels

Doug Kennedy is President of the Kennedy Training Network, Inc. a leading provider of hotel sales, guest service, reservations, and front desk training programs and telephone mystery shopping services for the lodging and hospitality industry. Doug continues to be a fixture on the industry’s conference circuit for hotel companies, brands and associations, as he has been for decades. Since 1996, Doug’s monthly training articles have been published worldwide, making him one of the most widely read hospitality industry authorities. Check out his monthly webcasts at www.KTNwebcast.com or visit www.kennedytrainingnetwork.com.