Owners and operators are hampered by being “small fish” in a big purchasing pond, lacking the collective buying clout required to be able to negotiate the best prices. They’re discovering that “do-it-yourself” procurement is not as simple as they had hoped and are now realizing that they don’t have to do it alone.
Category: Blog Posts
This combination of unpredictable external factors and evolving customer demands are creating problems for hospitality professionals. Food service operators need to stay aware of consumer preferences and try to source the trending and popular ingredients from local suppliers, all while managing their food budgets in a volatile market with ever-changing commodity prices.
In order to have a competitive advantage over other restaurants, you need to offer high quality goods at the lowest price possible. Supply chain management is necessary to restaurant operators because of this need to minimize product costs and bring order to what too often can be a chaotic business. It is the responsibility of management to ensure that all of the costs of the product life cycle are kept low so the company can offer reduced prices to their customers, resulting in profits. The following are the benefits you can reap by partnering with a strategic supply chain management group focused on cost management.
Reduced Costs. Food service supply chain management requires identifying the processes that increase cost without increasing the value of the final product. These processes do not add value and should therefore be eliminated.
Increased Efficiency. Resource consumption leads to increased production costs, which is more often than not the result of improper planning. A company that uses supply chain management can achieve efficiency of its operations since only those value adding actions are encouraged. This ensures that the organization’s processes flow smoothly and output keeps inline with the needs of the company.
Increased Output. A company that employs supply chain management can develop stronger close relationships with both its suppliers and customers. You will have better alignment of your needs with your selected suppliers, more options, better pricing and timely completion of orders. A company with a well –stocked variety of popular menu options will deliver on their brand promise to their customers, and will grow as a result.
Increased Profits. One of the best ways to increase a company’s profits is by making sure that costs are kept as low as possible. By embracing and applying strategic restaurant supply chain management to your operations, you are able to reduce costs because you are getting rid of wasteful processes. Since these are operating costs for the company, the savings on these costs reflect increased profits for the company.
Food service supply chain management can help you transform a traditional linear supply chain into an adaptive network, providing you with increased visibility into the supply chain so you can sense and respond quickly to changes and quickly capitalize on new opportunities. Moreover, you can lower operational expenses with opportune planning for procurement, manufacturing and transportation. Better product, ordering process, and execution tracking can lead to improvements in performance and quality, resulting in lower costs.
Source1 Purchasing is a leading strategic sourcing group focused on cost management, savings and operational efficiency for the lodging, restaurant and food service industries.
Hotel pantries stocked with the items guests frequently request are gaining popularity across all hotel brands. Guests enjoy the convenience, and hotel operators discovered a few of the benefits.
Independently owned hotels are also developing their own unique market to meet the needs of their guests. With an experienced procurement company like Source1 Purchasing, any hotel can install and operate a pantry easily.
Source1 Purchasing recognizes that every dollar matters. In order to effectively develop this part of your business quickly and cost-effectively, you need to consider the specific items your guest request most often and learn how procurement solutions can make it easy to manage.
Source1 provides access to a complete pantry solution from installation to pricing, reports and automatic inventory shipments. Establishing a pantry for your guests is easier than you might think. Keep these three steps in mind as you consider starting yours:
1) Start simple. You do not have to carry a lot of products in your hotel pantry. While some variety is good, you can focus on the top items your guests have asked for in the past. Just ask the front desk staff.
2) If you’re inclined to be cautious, you can start small with one movable rack. Have select items that a guest would ordinarily use to learn how the concept works with your guests.
3) Start with a few of the most-requested products: aspirin or acetaminophen, packaged snacks and beverages.
By stocking these most-requested items, you build awareness and repeat visits for other items from toiletries to snack and beverages. . Guests who leave the hotel to buy something as small as acetaminophen are more likely to add other purchases while they’re out including quick meals. Consider offering enough variety to keep your guest happy with a selection they can buy from you. As hotel operators, you have more options to open a new revenue stream with a conservative out –of-pocket expense. .
Having a market in your hotel provides convenience for guests. Most travelers prefer the ease of getting what they want in your facility. Nobody wants to be spend time trying to find the drug store or diner in a strange city. It easier to simply walk downstairs, and purchase snacks in the lobby.
If you are looking to expand your current hotel pantry, consider setting up a small electronics section. This is another way to meet a guest’s need and capture more revenue. Today’s guests are well-connected — they cannot function long if they forgot batteries, electronics plugs and chargers.
Ready-made meals are another key area for pantries. You can find clues to the more popular food items in your local grocery and convenience stores that are seeing a growing demand for ready-made and shelf-stable meals.
Sometimes guests want something they can pick up and eat quickly. But occasionally there may in interest in a new, exciting flavors. With this in mind, look beyond typical food selections to grab their attention. Make use of Source1’s expertise to help you locate these ingredients.
Hotelchatter.com highlighted DoubleTree’s new “Made Market” which provides a good example of how you can design a market specifically for your hotel. Instead of packaged cereal, boxes of milk and microwaveable meals, they are serving freshly made foods that are packaged for quick consumption.
Some of the menu options include omelets, frittatas, soufflés, flatbreads, salads and burgers on brioche buns. A guest may purchase coffee in the morning, and then enjoy a glass of wine or draft beer in the evening. These markets also have favorite snack items that guests can purchase.
Meeting guest expectations with items they need and delicious ready-made food can also benefit the bottom line. Hotel markets are quickly becoming a new source of revenue. Customers are proving that they will pay a bit more if they can get what they want right in the hotel lobby.
A hotel pantry is a great amenity for hotel operators to offer because it doesn’t require a lot of inventory or capital to get started. You can always test the concept and easily expand it to include ready-made food, additional snacks, and health and beauty products.
This allows you to provide an amenity that also brings in revenue, meaning it’s a win-win for your guests and your bottom line.
Technology impacts every facet of the hotel industry. Large operators embraced solutions early on. Today, hotel operations of all sizes can benefit by considering theses three hallmarks:
1. Social Media to drive reservations and guest satisfactions
2. Mobile devices to address guest requests on the spot
3. Integration on the cloud to ensure cross departmental collaboration
While at first these changes seemed a bit daunting, most successful operations have integrated the ideas. If your operation is new to the three hallmarks, break them into manageable parts. Consider a college intern for your social media presence. Invite your department heads to assess the best way to use mobile devises in their departments. And consider a purchasing expert like Source1 Purchasing to offer procurement solutions that translate to savings of time, resources and money.
Now that hotel operators are embracing technology in the hospitality industry, they are experiencing higher guest satisfaction and profitability. Today’s guests want a highly personalized hotel experience that includes using their personal technology devices during their stay. Chances are they booked a room directly from their smartphone, so it makes sense to use technology tools in rooms and throughout the hotel because guests are familiar with these and use them every day.
Technology is also revolutionizing how hotel operators manage their business. Sales departments have been restructured to strongly focus on social media and e-commerce. Other departments are using updated software to better communicate and quickly meet guest needs.
An article on the Hotel Interactive website addresses technology issues facing the hotel industry today and shares opinions from hotel leaders attending this year’s BITAC Tech and Operations conference.
When attendees were asked if they are leveraging technology to lower operational costs at their hotel, 11.3 percent said “no,” 18.8 percent said “yes” and a whopping 56.3 percent said “yes” but admitted they “could do better.” This suggests that although hotels are embracing technology in the hospitality industry to improve guest satisfaction, they are still looking for efficient ways to manage their hotel business.
One way hotel operators can improve accountability and harness maverick spending is by updating their procurement process. This can become a serious issue for your budget if overlooked. You need to know what you’re receiving, what vendor you’re buying it from and what you’re paying.
Hotel operators are also looking to online ordering for their food-and-beverage programs. Distributors wanting to make the procurement process as simple as possible are embracing this model and are providing the service at no charge to the hotel operator. Operators have at their fingertips new tools for online ordering, monitoring prices by category, identifying quality products and reducing wasteful spending.
Larger multi-unit operators are also tying their purchasing platform into their back office administrative software, which helps create an even more efficient procurement process.
Regain control over your purchasing. Identify products that meet your brand standards and work with a supplier that can consistently deliver high-quality products at a set price. This way you’re able to monitor prices by category. Your hotel’s procurement process can create a cost savings when you analyze your spending and identify ways to leverage it.
With the recession in the rear-view mirror, now is the time to explore procurement solutions that can help rejuvenate and add value to your hotel.
The transaction volume for 2013 is forecast to reach $18.5 billion, a 5.7 percent increase over 2012 levels, according to an article on the 4Hoteliers website. Analysts have a bullish outlook as the economy continues to improve.
For hotel owners, that means there’s no better time to consider ways to enhance your property and benefit from the projected growth in travel spending.
When considering renovations, look at what provides the highest ROI, adds value and gives you an edge over your competition.
- Wi Fi | A great place to start is by adding Wi-Fi to your property. Hotels with Wi-Fi use it as a selling point and experience high customer satisfaction ratings. Many guests have come to expect Wi-Fi when they stay in a hotel.
- Business Center | Business centers are also great additions for hotels that cater to corporate travelers. They can add value by providing business travelers with a place to print business documents or boarding passes.
- Restaurant Refresh | Renovating restaurant facilities is another key area to focus on. Technology is an integral part of travelers’ lives these days, and they expect to be able to connect wherever they are. Make the dining areas tech-friendly by putting outlets near tables so guests can multitask — charge their phone, check their email, etc. — while they enjoy their meals.
- Audit Resources | Another easy way to add value and cut costs is to comparison shop your phone and Internet plans. Compare service providers and see who’s offering the best plan in your area. Just like consumers, this can also save operators money.
Source1 Purchasing has access to extensive procurement solutions for all of your food and beverage, operating supplies, maintenance and renovation needs. From flooring and fixtures to equipment and supplies, Source1 can help you bring guests the latest comforts and conveniences, and rejuvenate your hotel so that it thrives in the improving economy.
You may or may not be aware of exactly where your food comes from, but you need to know if you are actually getting the best results from your supply chain.
Managing your supply chain can be somewhat difficult because food and supplies are being purchased and packaged both domestically and abroad. In the event food suppliers see the impact of bad weather, food contamination or even government fines, they revisit their pricing strategy and make adjustments, upward, that are passed along to the hotel and restaurant operators.
According to an article on the Food Safety Magazine website, the FDA continues to place strict regulations on companies exporting and importing food to stem instances of food contamination. There have also been cases reported of food fraud and misrepresentation of ingredients on food packaging. In fact, new U.S. agencies have been created to meet the need for tougher inspections.
You cannot possibly know about all the different variables that could affect your order, including recalls. But these factors signal a need for you to be more involved in your hotel’s procurement process.
It is important to have a good relationship with your suppliers so you can be more informed about changes that might influence your products, and ultimately your service. You obviously can’t control some of the factors in your supply chain, but you are responsible for what is served in your facility. As such, it’s best to question whether you are receiving the best products at the best prices with adherence to current safety rules and guidelines. Given the size of that task, some companies engage a purchasing company like Source1 Purchasing who can offers immediate product updates.
To ensure the best quality and pricing, it’s also important for operators to periodically evaluate their product line. Start by focusing on the top items in your hotel supply chain: Do the products meet the needs, standards and expectations of you and your guest?
With Source1 Purchasing, you can identify the products that are contracted. That translates to additional cost savings realized when these items are added to the order. Operators should also review these items to see if it’s time to upgrade them for quality or change the serving size to serve customer trends. Are you buying the right products to satisfy guests and are you leveraging your spending to get the best price? Be aware of your purchasing patterns using your data to ensure you’re getting the best results.
Purchasing data can also help target areas of possible concern at your property. For example, at some hotels and restaurants, the purchasing staff may choose products based on their individual preferences instead of the brand standards. Relationships can sometimes influence a decision. To successfully manage procurements for a hotel or restaurant, buyers must be knowledgeable of the food industry as a whole and be proactive in obtaining the best products at the best price.
As an operator, all it takes is a focused approach and visibility into your purchasing data to be confident that you’re making the best choices. You know where you are in the industry and you know the factors that impact your buying decisions. By reviewing your purchasing records and making a few key changes, you can experience wins in your operations and in your hotel supply chain.
Every hotel requires products and services.
Small operations purchase a smaller volume and have historically paid a higher price. Today, operators have the choice to join a group to access sourcing and procurement solutions that are tailored to meet their hotel’s purchasing needs.
When hotels opt to purchase on their own, they may invest a great deal of time to realize short term benefits. Consider the alternative of joining with many other operators via a purchasing company and access better prices immediately and longer term, additional rebates which can annually be a significant amount.
There is great value in cultivating loyal customers. An article on Hotels.com recently shared results from a Deloitte research project regarding loyal guests. The report, conducted recently, found that only 8 %of travelers are loyal to a single hotel brand. This elusive group is savvy with online research. You want to be sure that when they arrive on your front desk, every aspect of their hotel experience delights them.
Gaining loyal customers is critical for your hotel because they help generate consistent revenue flow. There is less overhead involved in repeat guest. Additionally, they serve as your goodwill ambassadors to their friends and family. The most authentic of marketing at no cost.
Food and beverage (F&B) can be an important feature in some hotels. By placing an emphasis on the right kind of theme and food quality, operations can capture the attention of local residents as well as their hotel guests. A purchasing company like Source1 Purchasing can help you access high quality, national brands, and sourcing and procurement solutions.
Keith Spinden, Hyatt Regency Chicago’s senior director of F&B, says in an article on the Hotel Management website that both owners and operators need to have a long-term commitment to serving quality F&B. It has to be more than a current trend for your hotel.
“We really need to maintain our focus on top-line sales and get a steady stream of customers walking through the door and coming back,” Spinden says. “We must maintain a certain level of revenue, but if we play around with quality, our top line will decline as well and that’s a downward spiral we try to avoid.”
A sourcing and procurement strategy helps hoteliers work smarter in five ways:
1) Save time. Reaching out to suppliers is often time-consuming. When you use the services of a procurement organization, the experts conduct the research to ensure the best solution.
2) Save money in two ways. The procurement solution provides contracted, pre-negotiated savings on specific items. Pre-negotiated prices typically cover a longer period of time so operations can be protected from inflation and other short-term fluctuations in the market. Plus, you gain access to rebate on a quarterly basis.
3) Become more powerful. Sourcing and procurement solutions merge your volume purchasing with the purchasing of other customers, which increases your savings: Larger hotels that buy huge quantities of food and supplies qualify for volume discounts. Adopting sourcing and procurement solutions enables smaller hotel operations to enjoy the same benefits and the same high quality, name brand products.
4) Protect the promise. It is important for you to deliver on your promise to every guest. If you are able to purchase a higher-quality product with a higher volume of discounts, then you can use the savings to improve other facets of your operation. Aside from F&B, you can also purchase linens, in-room amenities, appliances, TVs and even MRO, FF&S and OS&E. Your guests will be delighted with the consistency and quality of their experience.
5) Get options. You can spend your precious time securing two or three quotes or you can work with the buyers at a procurement organization that can take your need, research options and present you with details. You can focus on making the decision that meets your needs. While taking advantage of discounts and lower prices.
Source1 works with virtually every hotel company and understand the brand standards of each we work with your team to deliver the best products to your guest at the very best price.
Written by Chris Butsch
As a leader, you’re probably already aware of the countless ways to improve your culture and inspire loyalty. But who has the time? As a friend and director of purchasing recently put it: “How am I supposed to build a great culture when I don’t even have time for lunch?”
Luckily, small tweaks can make a big difference in employee retention rate. To create a culture of retention, you don’t need to hire a resident yoga instructor named Artesia, or pay to send your whole team to learn fire-walking in Bali. Rather, by applying some clever positive psychology, you can improve your culture and boost retention in 10 minutes or less. Here are three ways to increase employee retention:
1. Show Some Extra Gratitude
According to the World Health Organization, burnout occurs when effort outstrips reward, relaxation, and recognition (source). So to keep your best people, you need to give them more money, more time off, or curiously, more thanks. Will saying “thank you” really make a difference? Researchers from Harvard and Wharton found that when employees of a fundraiser were simply thanked for their hard work, their outward call volume increased by 50%. The researchers also found that when thanked, people are twice as likely to offer help to a colleague (source).
Gratitude releases a cocktail of neurochemicals increasing emotional intelligence and reversing stress (source). When you thank an employee, you’re giving them an espresso shot of joy and motivation. So to reap the benefits, consider starting your next meeting sharing 5-10 minutes of sincere gratitude for your employees. In your expressions of gratitude, be sure to use “because” to illustrate impact. For example: “Melissa; I sincerely appreciate how you took initiative to reach out to our upset client because you alone might’ve saved the account!”
2. Start Meetings with Deep Breathing
Purchasing demands lead to stress, stress leads to burnout, and burnout leads to turnover. Demands are inevitable, but you can prevent your best employees from burning out by helping them nip stress in the bud. Luckily, one of the most effective ways known to science takes just 2 minutes. When stressed, you subconsciously take short, shallow breaths. Problem is, “thoracic breathing” for hours doesn’t provide your brain with enough oxygen; performance suffers, and stress increases.
Help your team break the cycle with 2 minutes of deep breathing. When you deliberately fill your lungs with air, oxygen and nutrients rush to the brain, increasing performance, creativity, and calm. Furthermore, researchers at Massachusetts General Hospital have found that consistent deep breathing practice helps permanently improve calm and productivity (source).
To reduce your team’s stress, try starting your next meeting by asking everyone to perform ten deep breaths from the abdomen; 4 seconds in, 4 second hold, 4 seconds out. Watch how stress melts away; did you notice a difference in the mood and tempo of the meeting?
3. Share Your “Why”
Millennials are the canaries of the corporate coal mine; if something’s “off”, they’re generally the first to go. As a result, the ability to retain top young talent is a hallmark of a strong culture.
So what’s missing?
According to the Deloitte Millennial Survey, in most organizations it’s a sense of purpose. “Millennials believe a business’ sense of purpose should be far greater than is currently the case.” (source). Retention is achieved “when employers demonstrate a strong sense of company purpose beyond financial success.” You may think purpose is easy to cultivate when you’re saving the rainforest or performing open-heart surgery. But how do you cultivate purpose in the purchasing world, and moreover, how do you do it in less than 10 minutes?
Ask yourself: who do we help? How do we help them? What suppliers, manufacturers, or patrons’ lives are improved by our work? How can I share their story with my employees? A 10-minute story via email or during a meeting illustrating how your team’s work impacted the greater good is an essential ingredient in a positive work culture. Find a way to share your “why” with your team and you’ll be giving them a zero-cost, high-ROI driver to stay loyal and hardworking.
In an ideal world, you’d have countless hours to devote to improving work culture, employee engagement, and retention. In the high-stress reality of purchasing, however, spare time is measured in minutes. But if you can fill those cracks in the calendar with gratitude, purpose, and a few minutes of deep breathing, you’ll quickly improve company culture and inspire your best people to continue happily working hard for you.
Chris Butsch is a professional speaker and business author helping companies slash disengagement and turnover by keeping their best people happy.
Attracting families is an important priority for many hotels. While traveling families has always been a lucrative demographic for the hospitality industry, there is more opportunity than ever for hotels who are committed to being “family-friendly”. Studies show that younger parents are traveling with their children at a growing rate. Millennial parents specifically will often travel with their young children three or more times a year. By taking a few simple steps to make sure that parents with small children feel comfortable and welcomed, a hotel can easily build a reputation for themselves as a family-friendly establishment.
Child-Friendly Amenities & Activities
Most traveling families will include some downtime in their itinerary. Even when they’re not out exploring the city, parents will still need to have some activities lined up for their children while they’re relaxing at their hotel. Hotels can help parents keep their children entertained by offering special amenities they can enjoy during their stay. Some popular choices include kid-friendly DVD’s or video gaming systems that parents can barrow during their stay. Other family-friendly hotels go a step further and offer organized activities for children such as arts and crafts classes.
The Comforts of Home
For many parents, traveling with small children can be enjoyable but also stressful at times. Chances are, especially if they have a small baby in tow, parents will not be able to pack all the comforts of home with them when they travel. Family-friendly hotels can help create a safe and comfortable stay for their youngest guests by offering special accommodations just for small children. Most importantly, small babies need a safe place to sleep. Hotels should source quality cribs from their trusted furnishing supplier for parents to use during their stay. Some other popular offerings include:
- Play Yards
- Childproofing Items (such as outlet covers)
- Night Lights
- Food & Beverage Programs for Kids
It’s not uncommon for children to be picky about what they eat. Hotels should make it a point to add child-friendly menu items to their food and beverage program. Another thing to consider is that parents will need to have healthy snacks on hand for their children while they are out sightseeing. It’s a good idea for child-friendly hotels to offer grab-and-go items that parents can easily purchase before they set out to enjoy their activities for the day.
From furnishings to grab-and-go food items, Source1 Purchasing’s network of quality suppliers have everything your hotel needs to make your guests feel at home. Contact us today to learn how we can save you upwards of 9% on all of your hospitality supplies.