Five tips for managing hotel supplier relationships

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by Dean Kaplan

Supplier Relationship Management (SRM) is undergoing a transformation in many industries, including hospitality; there is as much emphasis on building relationships as there is on business deals. Having good supplier relationships will help reduce costs and workloads – finding new contacts and renegotiating contracts takes a lot of time – and helps you provide better service to your guests. A good SRM strategy will provide guidance on both finding suppliers and managing your relationships with them.

Here are five tips for managing and improving your supplier relationships.

Technology

Having the right technology can make managing supplier relationships easier. Hotels that focus on both qualitative and quantitative supplier data analysis will be able to easily identify weak spots, risks and opportunities. SRM technology provides you with visibility into your supplier base, giving you a detailed picture of your supply chain and making it easy to reduce risks. Because hospitality is a unique industry, it pays to research a few SRM software providers and find one that can integrate well with your other systems.

Larger hotels will want to have a system that allows viewing all of suppliers and an analyzation of risk factors. Smaller hotels may decide that they do not need a complete system for SRM, or quite the same level of analysis, but should still consider how to best track suppliers over time.

Involve Other Departments

In a hotel, finding suppliers isn’t just about the best deal for the best product. Everything in a hotel, from your internet service to your towels to the kinds of pens and shampoo you have in your rooms, can be used to help or hurt marketing and customer loyalty efforts. Internet review sites mean that even the smallest detail of a guest’s stay is now open for commentary. It’s important that those in procurement work closely with those in marketing and customer relations to make sure they understand the needs and wishes of the guest.

Keep Buying Centralized

Although it’s important to make sure all departments in your hotel are working together, for SRM to work one department needs to retain some form of control over the process. A standardized form of building relationships and creating contracts reduces supply chain risk, reduces redundancies and simplifies contracting. As a commercial collection agency, we often see payment problems when a smaller department “goes rogue” and creates their own contract with an outside supplier.

Do Your Research

Before you go to a meeting with a supplier, make sure you understand what their process is, what kinds of profit margins they expect and what their pain points are. The more information you have, the more confident you’ll appear in negotiations, which will help you broker a better deal. Researching the individuals involved in the negotiation can also be helpful. Forming a personal connection to someone often eases a business situation. As stated above, internal research to ensure you fully understand your own needs and limits will also help keep meetings and deals smooth.

Collaborate

Negotiations are often thought of as situations where one side wins and the other loses. But it doesn’t always have to be that way. There may be ways that you can work with your supplier to save you both time and money. For example, you may be able to utilize your networks to help each other find additional customers. You may be reluctant to provide another hotel with access to your suppliers, but perhaps you know someone in a related field. Even if it does not save you money, creating more ties and better relationships between you and your supplier can yield benefits such as favorable treatment during difficult times.

The biggest key to Supplier Relationship Management is remembering the word “relationship.” Business relationships can be hard work and they don’t develop in one day. Relationships need nurturing, care, and consideration to be kept healthy. The good news is just as they aren’t built in one day, relationships rarely disintegrate in one day, either. So, if you have relationships in need of strengthening, there’s still time.

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