By Rhonda Drury, Senior Director, Procurement Consultant. Published in Today’s Hotelier July 2023 issue.
Many independent hotels have discovered the freedom a group purchasing organization (GPO) offers and have reaped the rewards of greater financial savings and better use of a limited labor pool. Ultimately, though, the biggest benefit comes in enhanced guest services.
Current inflation levels haven’t stopped guests from frequenting hotels but have certainly put a strain on budgets throughout the hospitality industry. When coupled with a lack of hotel personnel, the higher costs of supplies add to the headaches faced by hoteliers. Some are going without concierge services. Many no longer offer daily housekeeping services. In some cases, hotels are putting rooms out of order due to a lack of staff to keep up with all of them.
Stocking guest items such as linens, towels, soap, and toilet paper is an expensive and time-consuming activity for owners and operators of independent hotels. Associates are spending time away from the operation’s core business and racking up time and travel costs shopping at retail outlets simply to save a few pennies. Not only does guest service suffer, but you’re likely spending more in the long run than you save.
A GPO’s extensive network of diverse suppliers around the world ensures their clients have what they need when they need it. No more last-minute shopping trips that pull an employee away from guest service and send them to the closest luxury store or online to pay retail price for specialty soap and lotion.
TIME IS A FINITE RESOURCE
Certainly, the hospitality industry isn’t the only one facing a tight labor market. Many suppliers also are finding it difficult to keep their customer service operations fully staffed. That can sometimes mean you’re spending precious time simply waiting for a problem resolution from them. A GPO can add time back into your day by working with suppliers to resolve issues on your behalf.
GPOs are in the supply chain business. As such, they work hard to build successful partnerships with diverse suppliers. However, they also should honor the relationships you already have with suppliers. Those relationships remain intact and often are enhanced by working with a GPO. You can choose to continue working with those suppliers with whom you’ve already established strong relationships while getting better pricing on the items you purchase through them by taking advantage of the GPO’s economies of scale or leveraged spend.
A key benefit to working with a GPO is the ability to track and manage your spend. A GPO offers a data-driven approach to helping you manage your supply chain and budget. You’ll have the data you need to better understand your current spend and to find possible savings.
Celebrate the joys of being an independent property and enjoy the freedom from worrying about procurement, budgets, and staffing. Find time and money by working with a GPO to manage your supply chain.
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