If you are an established hotel developer with a growing portfolio of properties, odds are you’ve already joined forces with a professional procurement group to help you navigate the project services space.

But for those newer to the world of hotel ownership, development or pipeline property project management, the benefits of third-party sourcing support may yet be unknown. And while “on time” and “under budget” can be prime selling points for companies looking to help you complete that new-build hotel, conversion or renovation, those offerings are table stakes and the baseline of what any credible provider should deliver in a procurement partnership.

While speed to market is critical — and should be a primary focus for any good partner — developers also deserve to work with service providers who understand how to craft the optimal furniture, fixtures and equipment (FF&E) and operating supplies and equipment (OS&E) procurement solution. This will help fit an individual property’s market, geography, category, target traveler, total budget and other key project priorities, such as sustainability or a desire to over-index on a specific aspect of the guest experience.

Before you sign on the dotted line with a project services provider, be sure to engage in conversation about the full spectrum of services, support and supply chain solutions each potential partner can provide, and keep the following considerations in mind during contract negotiations.

Strategic sourcing begins with comprehensive supplier identification and qualification, followed by the development of a static supplier base capable of delivering a high-quality product from a diverse range of manufacturers. Without a strong network of suppliers to support you throughout the development process, you may find yourself stymied by product outages due to a raw materials shortage, boxed in by the limitations of a single manufacturer or delayed in your build because of a logistics logjam somewhere between your property and a distributor halfway around the globe. In the world of supply chain, scale truly matters, and an industry-leading provider is far more likely to have the global supplier backing — not to mention, purchasing and negotiating power — to secure the products you need, when you need them.

By extension, a professional procurement group can typically direct you toward suppliers in locations that make the most sense for your project. If speed to market is your top priority, you may prefer to pay a slightly higher price per unit to buy from a regional manufacturer whose shipping times are a fraction of that from a comparable supplier located overseas.

Conversely, if price is paramount, you might wish to weigh three or four manufacturing options in different locales against estimated cost of freight, price per unit and the timeline for when goods might arrive. Regionalized supply chains are also a plus for developers looking to source responsibly by buying from local suppliers and reducing their freight-related carbon footprint.

Whatever it is you value you most, the key factor is to find a partner well-versed in navigating the constantly changing logistics landscape and advising you accordingly.

Any reputable procurement services provider should be looking at your project from a total cost perspective, as well as disclosing their fee for compensation upfront. Look for a partner whose project budget outlines the true cost of every negotiated product or service, who purchases directly from the manufacturer — saving you the expense of a dealer markup. Look for a partner who operates with 100% transparency around their fee model for procurement services and who is positioned to advise you on the optimal moves throughout your build to secure the best possible value without sacrificing on a quality stay experience.

An expert service provider will have their finger on the pulse of the supply-chain industry, including a detailed understanding of the sourcing outlook on a commodity-by-commodity basis. Spikes in market price for raw materials such as steel, lumber or the chemicals used in fabric, for example, could significantly affect the total cost of certain line items in your build budget.

And while even the best procurement partner can’t always move the needle on commodity-driven pricing fluctuations, these providers can help you understand the “why” behind any changes to your project scope in real-time — as well as offering you greater choice and control regarding the materials, manufacturers and finished product options that will best align with your project budget and timeline.

Ultimately, the most important thing to bear in mind is that no two properties are built exactly alike. Even the most prototypical brands will encounter differences around their geography, desired procurement approach (e.g., turnkey vs. warehousing solution), supplier landscape and the real-time conditions impacting the global commodities market and freight routes at time of build. So whether you’re building a new hotel from scratch, converting an existing property to a new category or seeking to streamline sourcing support for an overhaul or upgrade, align yourself with a project services provider who understands — and can deliver on — your overarching vision and expectations. That’s the kind of procurement partnership that will pay dividends on your investment long after the doors are opened.

Anu Saxena is the president and global head of Hilton Supply Management.

The opinions expressed in this column do not necessarily reflect the opinions of Hotel News Now or CoStar Group and its affiliated companies. Bloggers published on this site are given the freedom to express views that may be controversial, but our goal is to provoke thought and constructive discussion within our reader community. Please feel free to contact an editor with any questions or concern.

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