The hospitality industry faces enduring challenges in procurement that significantly impact operational efficiency and guest experience. A recurring issue is the inefficiency rooted in outdated procurement practices, which no longer suffice in an environment altered by supply chain disruptions, labour shortages, and fluctuating costs. This inefficiency can culminate in last-minute, costly interventions—such as scrambling for supplies at convenience stores—which risk damaging guest sentiment and operational flow.
Historically, procurement in hospitality relied heavily on manual processes and personal relationships with vendors. However, modern supply chain complexities demand more sophisticated approaches. Hotel operators must now embrace flexible strategies, such as sourcing from multiple vendors and embracing ‘just-in-case’ inventory planning to mitigate risks. For example, in speciality offerings like unique guest experiences—such as Marriott’s Postcard Cabins providing campfire kits—supply shortfalls can be particularly damaging, forcing costly last-minute substitutions or compromising guest satisfaction.
Technological advancements promise transformative improvements in procurement. Real-time inventory tracking combined with AI-driven forecasting tools can anticipate shortages and optimise stock levels. These technologies also present sustainability opportunities, encouraging sourcing from local vendors to reduce delivery times and support regional economies. Integration between procurement systems and property management or point-of-sale software is another vital step, streamlining operations and reducing friction.
One prominent example is the adoption of platforms such as Amazon Business, which provide a centralized purchasing hub to simplify and accelerate procurement. This platform supports the entire procurement lifecycle—from browsing to payment reconciliation—enabling hotels to respond swiftly to shifting market conditions and guest needs. Features like multi-user accounts, purchasing workflows, and spend visibility empower organisations to maintain compliance while optimising budgets. Fast and flexible shipping options, including one-day delivery and scheduled arrivals, reduce the need for excessive inventory holding, helping balance readiness with cost-efficiency.
Beyond supply chain and operational improvements, procurement automation also plays a crucial role in safeguarding financial health. Manual procurement processes have left many hotels vulnerable to significant fraud losses, often between 5% and 6% of annual revenue, through mechanisms such as fake purchase orders and invoice manipulation. Implementing procure-to-pay (P2P) automation heightens transparency and fraud detection, streamlines approval workflows, and reinforces governance.
However, the shift to digitised procurement is not without challenges. Common pitfalls include poor user experience, conflicting organisational priorities, and gaps in talent and technology adoption, which can undermine procurement policy effectiveness. Integrated and user-friendly procurement technologies that align with organisational goals are essential to mitigate these issues and strengthen supplier relationships.
Moreover, fragmented procurement operations, where departments function in silos and lack integration, exacerbate inefficiencies and limit visibility into spending. This fragmentation can lead to bottlenecks in approval processes, difficulty managing vendors, and increased risk of non-compliance. Centralised eProcurement solutions that connect various procurement functions help overcome these hurdles, enabling hotels to reduce costs, prevent operational disruptions, and enhance overall efficiency.
The hospitality industry’s procurement landscape is complex—balancing supply chain management, cost control, risk mitigation, vendor relations, and sustainability demands. Businesses must adopt agile, comprehensive strategies that leverage integrated technologies and data-driven insights to navigate these challenges. This evolution is not just operationally beneficial; it ultimately enhances the guest experience by ensuring consistent availability of essential and experiential products, thereby supporting the core mission of hospitality—delivering exceptional service.
In summary, the shift from outdated, manual procurement towards automated, integrated, and predictive solutions is imperative for the hospitality sector. Such transformation will safeguard operational continuity, protect financial margins, and enable hotels to meet and exceed evolving guest expectations in a dynamic global market.
Source: Noah Wire Services
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