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Why More Hoteliers Are Turning to eProcurement

why hoteliers are keen to use e-procurement solutions like Lilo


There was a time when everyday hotel procurement activities were conducted through a manual, paper-based system riddled with inefficiencies. 

Hotel general managers often relied on phones and postal mail to communicate with various suppliers.

Then, the Internet arrived, and many hotels began using email to send purchase orders (POs) and check their statuses with suppliers. 

Subsequently, Software as a Service (SaaS) solutions permeated practically every industry, and many global chains began implementing web-based hospitality procurement systems. 

While far from perfect, these systems offered numerous advantages over the conventional methods in use at the time.

Fast forward to 2024, and eProcurement solutions in the hospitality industry are gaining popularity worldwide. 

This surge in interest is partly due to the havoc that the recent pandemic unleashed on regional and global supply chains.

Now, not only large hotel chains but even small-scale boutique hotels are eager to streamline their procurement processes with eProcurement solutions like Lilo. 

In this post, we will explore the reasons why eProcurement has become a growing trend in hospitality:

High Demand for Indirect Goods Drives Adoption of eProcurement

Hotels, particularly those with numerous locations across the US or elsewhere in the world, often require large quantities of indirect goods from different vendors.

Each location needs a steady supply of essential items for guest rooms. Some hotel supplies, like toiletries and cleaning products, deplete quickly and require frequent replenishment.

Consequently, hotel general managers and upper management have had to devote significant time and resources to maintain a steady supply chain and negotiate favorable terms & prices with suppliers. 

To further complicate matters, upper management in these hotels needed to maintain control over expenditures.

Online hospitality procurement solutions emerged to address such challenges in the industry, resulting in widespread adoption.

Hospitality Organizations Want More Transparency in Procurement 

Hotel general managers are always keen to maintain a clear audit trail. 

With online hotel procurement platforms, it is now possible to centralize all procurement-related documentation, be it purchase orders, invoices, or contracts, at one place.  

eProcurement in hospitality also allows for customizable approval workflows that ensure proper authorization for every purchase. This helps minimize the risk of unauthorized or wasteful spending.

Need for Better Inventory Management 

Overstocking leads to wasted space and tied-up capital, while understocking can result in stockouts that disrupt hotel operations and have an adverse impact on guest experience. 

eProcurement platforms like Lilo effectively address these problems.

Hotels can, for instance, create custom order guides for purchase managers and even set up automatic reordering based on historical usage data or future demand estimated with demand forecasting tools. 

These tools analyze past trends and seasonal patterns to predict future needs accurately.

With real-time visibility into their inventory levels across all locations, hotels can facilitate better allocation and prevent overstocking.

eProcurement Platforms Fulfill the Need to Streamline Procurement 

The days of chasing down invoices or manually processing POs are thankfully behind us. 

Hotels can now automate repetitive tasks like order creation, approval routing, and tracking a single invoice on a hospitality procurement platform.

On Lilo, for instance, hoteliers have instant access to inventory levels, purchase history, and supplier information. 

They can access and compare thousands of quality supplies from reputed brands with the click of a button. 

Beyond automation, eProcurement solutions facilitate seamless communication and collaboration between purchasing managers, department heads, and accounts payable teams.

Hotels Need to Cut Costs to Remain Profitable  

Beyond efficiency gains, eProcurement unlocks significant cost savings for hotels, both small and large. 

For instance, Lilo as a one-stop-shop for hotel supplies, provides hoteliers instant access to quality supplies at wholesale rates. 

This translates to better pricing and potential bulk discounts. 

Robust supplier catalogs also allow for informed decision-making.

Hoteliers can also identify areas for cost reduction, track spending patterns, and make data-driven decisions when purchasing supplies.