Sourcing Services within the Hotel Industry

From small guest houses to internationally branded chains, hotels spend a lot of money ensuring the expectations of their guests are met. However, the boom of last minute and discount websites in the last decade has meant that margins within the industry are even tighter effecting every department.

As a result of the spending power offered by the Hotel industry there are more and more specialist sourcing consultants appearing claiming to reduce your spending, whilst maintaining the quality of the products and services supplied. Unlike many other businesses, Hotels have a large and varied supply chain that covers many areas such as:

• Laundry Cleaning & Supply
• Food & Beverage
• Crockery & Cutlery
• Furniture
• Stationary
• Printed Products
• Maintenance

If you are considering using a procurement consultant, what should you be looking for and what questions should you be asking? Here are a few I found when recently researching some of the cases of other purchasers:-

Can your sourcing consultant guarantee a reduction in your running costs?

Sometimes a procurement consultant will be able to give you a forecast of expected return on investment (ROI) in order to give you a feel for the savings you will make. Like so many other things, the more buying power you have, the more money you are likely to save.
But even if you are a small chain or just an individual hotel, don’t let this discourage you. Smaller local companies and competitors of your current supplier may well fight for your business too – it is the job of the Sourcing Consultant to make that happen!

Will the sourcing consultant assist during any supplier transitions and what guarantees are there surrounding service disruptions as a result of any changes?

Let’s face it, if you have any long term supplier relationships in place then implementing a system like this could potentially make maintaining these relationships more difficult and could break down your supply chain temporarily. Making sure that your sourcing consultant has a plan in place in preparation for any disruption is crucial, especially during busy periods.

How soon will you start to see savings in your purchases?

Are the savings instantaneous or do you have an initial outlay to consider? Some companies offer their services free of charge if you don’t see a reduction in costs, but what if that takes months? Will you be paying the consultant in the meantime?

Of course, before you do anything it is important to make sure you don’t have any service agreements in place that can’t be broken. But in the long term, finding a sourcing consultant might save your business some crucial pounds. As a result, I am certain that the consultants trying to save money in the industry are going to be around for years to come and judging by the savings they could make, we should probably welcome that.

Hotels need to promote despite the Olympics

Are hotels in the UK and especially in London relying too much on the Olympics to deliver their next year's business?

There are those concerned that people will not want to come to London before or during the Olympics for fears of over-crowded transport, a lack of - or too high - prices for hotel rooms and the he capital resembling a building site for most of the year.

The official agency London & Partners that are behind promoting tourism for London has admitted that the 2012 Olympic Games could lead to a lull in visitors to the capital next year, which may have a damaging impact on the UK's weak economic recovery.

According to a recent study by the accountancy firm PwC, London's hotels will deliver growth in revenue per available room – which is a key measure for the hotel industry – of 4.3 per cent in 2012. But supporting the impact of the Olympics, PwC forecasts only "slight growth" in the first quarter and a dip in the second and fourth quarters. However, there is a projection for a 20 % growth in the three months covering the Olympics.

There is also a worry about the level of uptake of the 40,000 rooms - or 40 % of capacity - allocated to the London organising committee as part of the winning bid in 2005. To find out what the uptake will be is not going to be clear until February 2012.

Only then will London hotels know how much work they have got left to do for making sure the 20 % growth will actually materialise. But also, more importantly - is's still not too late to work hard on promotional activity to avoid the dips predicted in the other quarters of the year.