By Annie Davidson, Director of Luxury Accounts. Published 1st Quarter 2022 in Luxury Hoteliers Magazine.
New Year. Same Headlines. While the COVID pandemic continues to affect global economies amid ongoing supply chain and inflation challenges – opportunities to centralize purchasing, find hidden gems among substitute products, and become more agile decision-makers have been bright spots in the hospitality industry.
It’s uncertain when the supply chain will fully regain stability, but the creativity and resourcefulness that has brought us this far will continue to inspire new ways of delivering luxury experiences to our guests.
I’ll share some practices from the past year that we have implemented to help luxury properties maximize their budgets, while not wavering on quality or experience for guests. First, though, let’s assess the situation facing the luxury hotel industry in 2022.
Nearly every industry is facing some version of the same struggle: labor shortages, demand outpacing supply, and illness driving higher-than-average absenteeism. Sound familiar? This lack of stability is impacting the manufacturing, distribution, and shipping industries creating an immensely complex situation for managing your properties and guests’ expectations.
Property managers are facing the added strain of having to order farther ahead despite the uncertainties of travel as emerging virus variants lead to new travel restrictions. Items like patio heaters and outdoor furniture can take anywhere from 4 – 30 weeks to be delivered. We are recommending our customers purchase those items now to ensure delivery on time for warmer weather and outdoor events.
Higher freight costs driven by high demand, labor shortages and higher fuel costs are taking their toll on manufacturers and distributors and are among the drivers of price increases. Additionally, increased labor costs, COVID compliance expenses, and commodity price increases are fueling an already difficult business environment for all hospitality segments, including luxury.
Preparing for longer lead times and taking advantage of current pricing are the two biggest pieces of advice I am currently giving our clients. Avendra forecasts that supplies will continue to remain tight and delivery times long. If you know there’s something you’re going to need, don’t wait; get it into your inventory now or it may not be available.
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