Purchasing: Powerful "Other" Partner
Updated: Oct 27, 2020
The role of an FF&E Purchasing Agent or Purchasing Consultant is a powerful partner and critical team member in creating a memorable experience for every hotel guest.
The collaboration required to ensure that the design intent of talented designers comes to life in line with the budgetary and timing constraints of ownership lies in the hands of experienced purchasing professionals. They are the crucial link between creativity and project costs.
After land and building construction/improvements, FF&E related services represent the third highest expenditure and arguably the one that has the biggest impact on the guest experience. So why is the critical role of Purchasing as an industry sector not distinguished at most industry conferences and events?
The "Miscellaneous" Category
At most hotel industry events, both investment or design based, registration options for FF&E hotel purchasing services ends up falling under "Miscellaneous Professional Services" or "Other" due to lack of a better selection category.
The most recent Hotel Development Cost Survey 2015/16 published by HVS Design Services indicates that FF&E average costs per room range from $10,200/room for budget/economy hotels to $51,000/room at the luxury hotel end. Multiply those numbers by hundreds of guest rooms and the need for smart purchasing quickly becomes apparent.
Many professionals attending industry events can benefit from a strong purchasing partner relationship including Architects, Designers, Brokers, Consultants, Developers, Investors, Lenders, Managers, Owners and Operators. However, if you wanted to find those potential Purchasing partners you would need to explore other categories such as "Product and service providers to the hospitality industry". Aren't we all service providers to the hospitality industry with a product or service to offer? The value of attendance and discussions among industry experts at these events is maximized when all disciplines necessary to complete projects are participating and building a stronger team for better end results.
Benefits at the Beginning
With over 25 years in this business, we are delighted to see consideration given to the purchasing role earlier in the hotel development process. A successful project team must include diverse expertise and owners should appreciate the value of having the right team assembled from the onset. It is imperative to consider the purchasing role as integral when assembling the team.
Benefits of early inclusion can be realized by:
Value engineering product to meet design aesthetic and budgetary limitations
Selecting appropriate vendors who can deliver the product in a cost effective manner and meet deadlines
Negotiating price on behalf of designer and owner
Improved budgeting and financial reporting including cashflow requirements
Realizing timely delivery of product to minimize the time a property is out of service maximizing revenue stream in both renovations and new builds
Consolidation of product purchasing to achieve volume pricing
Glue That Holds It All Together
The skills of an experienced purchasing firm are needed to successfully meet the requirements of a PIP for a branded property. They are uniquely qualified to negotiate with the brand on behalf of owners while being respectful of the design intent of both the standards program and customized design elements needed in a specific project.
Alternatively, independent and boutique hotel properties stand to benefit even more from smart purchasing since there are no standards and design needs to be implemented on time and within budgets.
Either way, Purchasing Services is the glue that binds the team together as they seek to achieve the most successful project results.
PIP: Purchasing Investment Power
While hiring a Purchasing Consultant or Agent is one of many project expenses, the benefits added will likely result in cost savings and increased profitability for hotel owners. So take a fresh look at your next PIP to add Purchasing Investment Power.
We look forward to seeing the critical role of Purchasing distinguished at industry event registration in recognition of the powerful partner it is within the hospitality industry.
About the Author
Catherine Savoca is a Principal responsible for Business Development at Alternate Resources. The firm provides purchasing and design services specializing in hospitality and contract markets. Celebrating 25 years in business, Alternate Resources takes pride in providing outstanding service to every client. Cathy is highly collaborative in her work and brings decades of diverse experience to every project. She also enjoys setting a beautiful table and filling it with great food, wine and people.