How Avendra International Helped Buswells Hotel Achieve €120,000 in Savings
As a member of the Original Irish Hotel Group, Buswells Hotel is a prestigious independent 67-bedroom hotel located in the heart of Dublin, Ireland, next to Trinity College and within a stone’s throw of St Stephen’s Green. It has consistently upheld a tradition of exceptional hospitality, earning itself a reputation for boutique-class hospitality offering a traditional warm service.
Paul Gallagher, the General Manager, has been leading the hotel for 27 years with a clear vision to provide 1st class customer service standards. In addition, Paul has also held a Non-Executive Director position with Dublin’s iconic Convention Centre, as well as Chair Central Marketing Partnership for Tourism Ireland and a Vice Chair Board of Directors for the Original Irish Hotels, which includes more than 50 hotels – including Buswells.
Having always worked in the hospitality sector, including hotels in England, Wales, Switzerland and Amsterdam, Paul certainly knows what is required to keep hotels running as efficiently as possible, as he explains:
“Since working at Buswells, I’ve witnessed a lot of changes. For example, I remember when bookings were made via telex and fax! While the service people expect remains a constant, the reservation process and general operations have evolved. Technology plays an increasingly important role in the guest experience, and of course, the overall management of the hotel has become far more digitised. We are also seeing inflation creating pressure on operational spend, which requires a close eye, and importantly, opportunities around participation in a group purchasing scheme.”
A Partner in Purchasing
With a commitment to advancing financial efficiency and streamlining operations, the management initiated an in-depth review of the hotel’s creditors ledger. The primary objective was to identify avenues for cost reduction, supplier relationship optimisation and benchmarking current pricing strategies within the hotel.
Confirms Paul: “Following some early conversations with the Original Irish Hotels group, where we share a centralised marketing department, we could see the advantages of combining further resources and knew we would be able to realise savings if we did this with our purchasing.
We were aware of Avendra International, and its hotel procurement specialism so we got in touch. It was at this time that I invited the team from Avendra International to come in and really get under the bonnet of our operations, learn about our supply chain, meet our head chef, understand our purchasing patterns and review our overall expenditure to see where efficiencies and savings could be made. With many outside factors driving price increases, you sometimes feel powerless of being able to make any financial savings, however, I knew that the best starting point would be the ‘big ticket’ items, including food & beverage, energy, telecoms, insurance, and laundry, and so we got to work.”
Examining Spending Trends and Supplier Partnerships
The process started by collecting and analysing creditor ledger reports and supplier invoices. Simultaneously, the Avendra International team conducted vendor evaluations were conducted to assess product quality, pricing competitiveness, and service delivery.
An examination of expenditure patterns revealed trends and areas of potential opportunity. Expenses were categorised, billing cycles scrutinised and contract terms evaluated for accuracy. On top of this, supplier relationships were closely examined to understand existing levels of communication, responsiveness and issue resolution. This involved engaging department heads and staff, including Executive Chef Niall Whelan, all of whom were able to provide valuable insights to enhance the assessment process.
Plugging into Energy Savings
Avendra International experts conducted the energy analysis component in collaboration with Radius Energy, and it delved into both Buswells’ electricity and gas consumption. This assessment highlighted the significance of accurate usage monitoring in the face of inflationary energy markets.
“When it comes to managing energy costs, I think everyone I talk to in the industry agrees that it is very hard to compare ‘like for like’ as the prices quoted appear to differ from day to day. It can be a minefield,” explains Paul. “As such, energy costings are so complex and difficult to project that having help from Avendra International from day one and its energy specialist partner Radius Energy, was very welcome.
They immediately helped us to unlock savings by going to the market on our behalf, saving us in the region of €75,000 per annum, which is an enormous saving for a hotel of our size. I trust the team and felt at ease with their recommendations, and I’m delighted to have identified such significant cost savings for the hotel’s financial sustainability.”
Food and Beverage & Non-Food
The next phase of the work involved analysing our food, beverage and non-food purchases against Avendra International’s group purchasing pricing.
Paul confirms: “Avendra International’s price analysis has identified a potential further €45,000 per year savings on these costs, if we utilise all of their recommendations. It’s great because these savings can be made either with existing suppliers or switching to an alternative. Our Head Chef has built confidence in Avendra International and their team due to the fact that they work in partnership with us and want to understand our needs fully. Plus, through their robust supply chain, we have certainty over the quality of products and service delivery and are progressively making savings over time.
Moving forward, Avendra International will renegotiate contracts as necessary to ensure competitive pricing is aligned with current market rates. We will also benefit from a centralised procurement system to streamline the majority of our supplier management.”
Conclusion
When reflecting on the relationship with Avendra International, Paul confirms: “Working with Avendra International has created some substantial cost savings, as well as operational efficiencies for our business. Moving the ‘big ticket’ items to Avendra International has really made a big difference, and all savings subsequently fall into our net profit, which, given the tough market conditions, is something I’m sure all hoteliers would like to benefit from.”
So far, the efforts have translated to an estimated 7% in savings, which is equivalent to over €120,000 for the hotel. The partnership has resulted in actionable recommendations that fortify supplier relationships, secure favourable terms and enhance overall operations.
Concludes Paul: “If I were asked “why should I talk to Avendra International” by another hotelier, I would tell them that I thought our prices couldn’t be beaten, and that we already had good relationships, but in fact, the savings we’ve seen by partnering with Avendra International speak for themselves.
When you consider the challenges that hoteliers face – we are generally fairly time-poor, we have inflation knocking on the door which keeps pushing up costs. Having support from professionals who are on your side makes a difference. Why let suppliers eat into your margins? I would say consider your largest spends areas– even if it’s just energy to start with – and you will be astonished at the savings that can be made – all of which can be reinvested back into making sure you deliver the exceptional hospitality and service that your customers expect.”
We are here to help
If you are looking to save money on energy as well as food, beverage and non-food products, we’re here to help. Get in touch at hello_Ireland@Avendra.com.
