Running a successful hotel operation means managing costs while delivering top-tier guest experiences—and that starts with smarter procurement. Whether you oversee a portfolio of 5 properties or 50, rethinking your approach to purchasing can unlock significant savings and operational improvements.
Here are five strategies to help you take control of your hotel procurement process, reduce waste, and make better purchasing decisions.
Strategy #1: Centralize and Simplify Your Procurement Process
The benefits of centralized hotel procurement
Many hotel portfolios still rely on fragmented systems—emails, spreadsheets, phone calls, and a dozen different vendor websites. Centralizing your procurement process brings everything under one roof, giving you more control over spending, improving efficiency, and reducing costly errors.
Centralized procurement also increases your buying power. Instead of each property negotiating separately, you can consolidate purchases across properties, often securing better rates and terms.
Steps to streamline your system
- Audit your current process: Identify how each property is ordering, approving, and tracking purchases.
- Standardize workflows: Define a clear procurement process that applies across all properties.
- Choose a centralized platform: Adopt a tool that allows all properties to submit and manage orders from one system.
- Assign clear roles: Designate who can order, who approves, and who tracks receipts and payments.
- Audit your current process: Identify how each property is ordering, approving, and tracking purchases.
Common mistakes to avoid
- Allowing properties to “go rogue” with their own vendors or processes.
- Failing to train property-level teams on the centralized system.
- Choosing a system that’s too complex or doesn’t align with how your team actually works.
- Allowing properties to “go rogue” with their own vendors or processes.
Strategy #2: Leverage Technology for Real-Time Visibility
Why visibility matters
Without real-time visibility, it’s nearly impossible to track spending, monitor compliance, or spot savings opportunities. Many operations only see a clear picture of procurement activity 30 days after the fact—far too late to course-correct or catch errors.
When you can see what’s being ordered, approved, and spent as it happens, you can make faster, smarter decisions and reduce surprises.
Tools and platforms that help
Look for procurement platforms built specifically for the hospitality industry. Key features to consider:
- Real-time dashboards showing spend by property, category, or vendor.
- Automated approvals and alerts.
- Vendor pricing comparisons and history.
- Integration with your accounting or property management systems.
- Real-time dashboards showing spend by property, category, or vendor.
Practical tips for smooth integration
- Start small: Roll out new tools with one or two properties before expanding.
- Get property-level buy-in: Highlight how the system saves time and reduces manual work.
- Ensure your vendors are supported: If the platform doesn’t work with your key suppliers, it won’t work for you.
- Start small: Roll out new tools with one or two properties before expanding.
Strategy #3: Negotiate Smarter Contracts and Partnerships
Best practices for vendor negotiation
Negotiation isn’t just about price. The best hotel procurement contracts balance cost, quality, and service. Go in prepared with data—order history, volumes, pricing trends—and be clear on what matters most to you.
Tips for better outcomes:
- Ask for pricing tiers based on volume growth.
- Bundle multiple products or services for better discounts.
- Seek flexible terms, especially if your occupancy fluctuates seasonally.
- Ask for pricing tiers based on volume growth.
How to secure consistent pricing and favorable terms
Inconsistent pricing across properties is a common headache. Use centralized procurement data to spot discrepancies and renegotiate contracts that apply across your entire portfolio. Lock in pricing where possible, and make sure terms are written down and shared with property teams.
Maintaining vendor relationships without overspending
Strong relationships are important, but loyalty shouldn’t come at the expense of your bottom line. Set clear expectations, pay on time, and communicate openly—but don’t be afraid to compare other vendors or negotiate when it makes sense.
Strategy #4: Optimize Inventory Management to Reduce Waste
Effective inventory tracking methods
Inventory management is often overlooked in hotel procurement, but it plays a big role in reducing costs. Without a clear system, over-ordering and stock-outs are common.
Adopt simple digital tools that allow properties to:
- Track current stock levels.
- Receive alerts when items are running low.
- Forecast needs based on occupancy and seasonality.
- Track current stock levels.
Strategies for reducing over-ordering and waste
- Implement par levels for each product based on historical use.
- Group purchases for bulk discounts without overstocking.
- Set ordering limits or approval thresholds based on item type or cost.
- Implement par levels for each product based on historical use.
Maintaining ideal inventory levels
Finding the sweet spot between too much and not enough takes practice. Regularly review usage data and adjust your ordering patterns based on seasonality, events, and occupancy trends. Involve your GMs—they often have a good feel for what’s actually needed on the ground.
Strategy #5: Use Data to Improve Decision-Making
Choosing the right KPIs
Hotel procurement success isn’t just about spending less—it’s about spending smarter. Track KPIs that show where your money is going and what you’re getting in return. Start with:
- Cost per Occupied Room (CPOR): A clear metric that ties purchasing to performance.
- Vendor performance: On-time delivery rates, pricing accuracy, and quality issues.
- Order-to-approval time: How quickly you’re able to complete purchases.
- Cost per Occupied Room (CPOR): A clear metric that ties purchasing to performance.
Turning data into action
Don’t just collect data—use it. Look for patterns: Are some properties spending more on certain categories? Are certain vendors more expensive but less reliable? Use your findings to make changes and communicate results across your team.
Examples of data-driven success
- A 10-property hotel group identified inconsistent glove pricing and saved 12% by consolidating vendors.
- Another group spotted over-ordering of breakfast supplies and reduced food waste by 18%.
- A management company used CPOR to justify switching to new suppliers, leading to a 7% reduction in overall purchasing costs.
- A 10-property hotel group identified inconsistent glove pricing and saved 12% by consolidating vendors.
📘 For more on the importance of data in hotel procurement trends, check out this article from hospitalitynet.
Conclusion
Getting procurement right can transform your hotel’s operations—not just by lowering costs, but by freeing up your team’s time and improving service quality. These five strategies are a great starting point for any hotel group looking to streamline purchasing, increase visibility, and make better decisions.
Whether you’re managing five properties or fifty, taking a more strategic approach to hotel procurement can lead to real, measurable results.
Start optimizing your hotel purchasing today!