10 Common Procurement Mistakes Hotels Make and How to Solve Them 

Procurement is an essential part of the hospitality industry, as it involves the acquisition of goods and services needed to run a successful hotel, restaurant, or other type of hospitality business. However, it’s not uncommon for businesses to make mistakes in the procurement process, which can lead to cost overruns, delays, and other problems. In this write-up, we’ll look at 10 common procurement mistakes made in the hospitality industry and how to solve them.

  1. Not having a procurement strategy: One of the most common mistakes made in procurement is not having a clear strategy in place. A procurement strategy should outline the steps and processes involved in acquiring goods and services, as well as the goals and objectives of the business. Without a clear strategy, it’s difficult to determine the most cost-effective and efficient methods for obtaining the products and services needed to run your business.
  2. Failing to negotiate: Many hospitality businesses make the mistake of not negotiating prices with suppliers, which can result in higher costs. Negotiating with suppliers can help you secure better deals, discounts, and other benefits that can save your business money in the long run. This should be done daily!
  3. Not establishing relationships with suppliers: Building relationships with suppliers is important for a number of reasons. Not only can it help you secure better prices and terms, but it can also improve the overall quality of the products and services you receive.
  4. Not monitoring supplier performance: It’s important to regularly assess the performance of your suppliers to ensure that they are meeting your needs and expectations. This can include monitoring delivery times, product quality, and other key metrics.
  5. Not utilizing online procurement platforms: Online procurement platforms, like Reeco.io, can be a valuable tool for hospitality businesses, as they allow you to easily compare prices and terms from different suppliers in real time and streamline the procurement process in one single place.
  6. Not considering the total cost of ownership: It’s important to consider the total cost of ownership when making purchasing decisions, as it can help you identify the most cost-effective options. This includes not just the initial purchase price, but also any ongoing costs associated with the product or service, such as maintenance, repair, and replacement costs.
  7. Not utilizing digital methods for receiving orders: Relying on pen & paper to manage incoming orders can cause a myriad of issues including extensive manual work, human errors, lost invoices, and challenges in tracking orders. The traditional pen-and-paper method lacks the streamlined efficiency and accuracy that digital solutions provide. Adopting digital order receiving processes not only minimizes the chance of errors but also significantly reduces the time spent on manual data entry. It ensures that all orders are accurately recorded, easily accessible, and can be tracked in real-time, leading to a more organized and efficient procurement process.
  8. Not properly managing contracts: Properly managing contracts is essential for ensuring that you are getting the best deal and meeting your business objectives. This includes regularly reviewing and negotiating terms, as well as monitoring supplier performance to ensure that they are meeting the terms of the contract.
  9. Not having a contingency plan: It’s important to have a contingency plan in place in case something goes wrong with your procurement process. This could include identifying alternative suppliers or negotiating backup contracts in case your primary supplier is unable to meet your needs.
  10. Not involving all relevant stakeholders: It’s important to involve all relevant stakeholders in the procurement process, as this can help ensure that everyone’s needs are being met and that the products and services being acquired align with the goals and objectives of the business.

By avoiding these common procurement mistakes, you can help ensure that your hospitality business is able to obtain the products and services it needs in a cost-effective and efficient manner.