Procuring items for the hotel is an exciting and challenging job executed behind the scenes for the front-of-the-house operations. For the purposes of this article, we will outline items that are contractual in nature and those supplies that are considered small-scale in comparison. The idea and overall goal for any hotel property is to LOWER expenses while maintaining the best quality possible.
These include items that are purchased on a contractual basis for recurring expenses. In terms of sound procurement, this can be a great area for saving the hotel money in the long run. The best hoteliers and supply/administrative staff can negotiate rates that are advantageous to the hotel, especially in a market where multiple vendors are offered (which is typically the case). The more common ones in this category include the following:
Cable – Hotels acquire TV through a cable service provider. This includes premium cable subscriptions funded by the hotel for the guest’s convenience. Most hotels will offer the availability of premium moves that can be purchased straight from the mini-head device (on the TV). Each TV is generally hospitality-grade which allows for this capability.
Internet – While not as high of an expense as it once was, Wi-Fi is a recurring cost for a hotel. The cost can range depending on the size of the property and the data transfer rate provided by the service provider. Typically, a better deal can be achieved by bundling with cable, similar to what an individual would do at home.
Phones – Although technological advances are progressing rapidly, it is often a requirement for any hotel to have in-room phones for guest use. This satisfies not only a convenience factor but most importantly a safety requirement, as an emergency may arise and someone could be without their cell phone. These costs are trending lower and are dependent on the size of the property. Long-distance calls are usually recouped through the guest’s folio on a per-minute basis.
Groundskeeping – Do you notice the cleanliness of a property before even stepping foot inside? Most hotel managers will impress upon any employee the importance of a first impression, which typically includes the valet staff and the condition of the exterior grounds. This is extremely important and most hotels will contract out the gardening, planting, seeding, pressure washing, window washing and other important functions to maintain the exterior of the hotel. It is also not uncommon for hotels to employ their own groundskeeping, gardening, or porter teams to perform these functions. Depending on the cost analysis, this may be an attractive option for a hotel manager.
Laundry – This is not as common among hotels, but it is an option for some. Commercial laundry companies can offer competitive rates that may make this option more attractive than performing laundry functions in-house. Each hotel manager must analyze the pros and cons of this approach.
This list can expand much more, but typically, these are the main items you would normally see on a contract.
Do you want to make a difference for a hotel as an employee? Then find a way to lower expenses through the purchasing process! Small-scale acquisitions are just as important in terms of cost-savings to the hotel than contractual expenses. Unlike cable, which limits a hotel to only a certain number of providers, general supplies have much more flexibility allowing for more cost-saving measures to be executed. These items include the following:
Consumable Amenities – These are items consumed by the guest. When I first began as a hotel manager, I was very surprised at the amount of consumable amenities floating around the hotel. Coffee is definitely a popular one that costs the property some money, especially with new technologies dominating the market such as Keurigs. The entire beverage kit is considered consumable (sugar, tea, sweeteners, cups, straws/stir sticks). A few other items to note are shampoo, soap, conditioner, tissue, and toilet paper.
Non-consumable amenities – These may have a different term at certain hotels. These items typically include televisions, vacuums and carts for the housekeeping staff, coffee-makers, and much more. Depending on the frequency of these orders, it may be best to include these on a contract that can be negotiated at a lower rate dependent on the volume of purchase.
Linen – This expense definitely surprised me as a hotel manager as well. The cost of linen is, well, frustrating! The high quality linens that are provided in a hotel are very expensive, oftentimes requiring hotels to pass the cost to the guest if the linen is used for the wrong purpose (polishing your shoes with towels, bleeding on the bedding, etc.). The demand for high-quality linen is prevalent in the hotel industry and the importance of saving costs in this account has great potential.
Office Supplies – Generally, this is a back of the house item, but is definitely prevalent on any income statement. Hospitality jobs will usually involve the printer in some way, shape, or form, and the amount of printing can be substantial. There is potential for cost savings in this area as well, although it is not as much of a larger cost to a hotel.
Uniforms – One of the most important expenses in a hotel is the uniform for each employee. The front desk associate, valet, guest services, and management staff is required to dress professionally, oftentimes in a suit and tie. Well, these expenses can get out of control! Over the years, the supplier landscape has expanded dramatically and leveraging prices among the top vendors can lower costs.
Cleaning Tools and Supplies – This is a great expense to analyze. For example, let’s say there is a training deficiency with the housekeeping operation. Is the staff over-spraying deodorizer and causing guests to complain about the overbearing smell? Is the staff going through chemicals very quickly because they prefer stronger dilution of each chemical? Is the staff utilizing the right chemicals in the right areas or only believing in just one or two specifically? These are all training problems that can cost the hotel money in this particular account. Costs can be saved with proper training and finding the "right" vendor that can assist you in the purchasing process.
This sounds great - but how do you lower costs? By increasing the area of competition as best as possible. There are many local vendors who can provide the products necessary for any hotel on the market. Generally, the local ones are not as established as the dominant forces and can provide you with greater cost savings since they NEED your business. This doesn’t mean the industry giants cannot provide you with better deals; however, they will be less likely to work their pricing with you since they generally can survive without your business. After all, there are plenty of other hotels out there. Furthermore, I would recommend buying a little bit from everyone, if possible. This opens the door for further negotiating and relationship building that can be beneficial for any hotel manager!