Procurement and sourcing are important parts of any business. But in the hospitality industry, where customer satisfaction and quality are paramount, procurement and sourcing are especially critical. Without careful control over what you’re buying, you could end up paying more than you should for inventory or deliverables, or even be getting something that falls short of your customers’ expectations.
This article will go through some of the reasons why procurement and sourcing are important in the USA hospitality industry. It will also show you how to get your financial house in order so that you can make sure your customers always have the best experience possible at your hotels, resorts, restaurants, and bars.
1. Budget Control
In the USA, the hospitality industry is a billion-dollar business. In fact, this market is expected to reach more than $6.7 billion in 2026. From hotels and resorts to restaurants and catering, businesses in this industry need to keep tight control over their budgets to remain profitable. One way to do this is through effective procurement and sourcing practices.
By working with suppliers who can provide quality goods and services at a good price, businesses can save money on their overall budget. They can also streamline their purchasing process, making it more efficient and less costly. By implementing sound procurement and sourcing policies, hospitality businesses can maintain control over their budgets while still providing high-quality products and services to their customers.
2. The Need for Purchasing Materials
One important factor to consider when purchasing materials is procurement. Procurement involves planning and organizing the purchase of goods and services. By working with a procurement specialist, you can be sure that you’re getting the best possible prices on materials while also ensuring that they meet your specific needs.
Overall, by taking into account both sourcing and procurement, you can streamline the purchasing process for materials in the USA hospitality industry. This will help you get what you need while supporting American businesses and upholding high quality and safety standards.
3. Budget Allocation
By having a good handle on your procurement and sourcing, you’ll have a better idea of where all your money is going. The last thing you want to be doing is watching your profits evaporate before your eyes because of inflated contracts or mismanaged suppliers.
Furthermore, it’s not just about saving a buck. If anything, it could make your business worth more. For example, if you’re being overcharged for something that should cost less than $1 per unit but actually costs $1.50 per unit, it would make sense to go back to that supplier and renegotiate for a lower price.
4. Food Quality
Food quality is a concern for the hospitality industry in the USA. Poor food quality can lead to health problems for customers, and lost business for establishments. Fortunately, there are ways that procurement and sourcing can help with ensuring food quality.
One way to ensure food quality is to work with a reputable supplier. A good supplier will have high standards for the food they provide and will be able to provide documentation that proves the food meets those standards. It’s also important to inspect the ingredients that go into the food. This can be done by visiting the supplier’s facility or by requesting samples of the ingredients.
Another way to ensure food quality is to create a detailed specification sheet. This sheet should list all of the requirements for the food, including ingredient specifications, cooking temperature, and packaging requirements.
5. Supply Chain Management
The supply chain for the USA hospitality industry can be complex, with many different suppliers and distributors involved. Procurement and sourcing can help manage this complexity by helping to coordinate the supply chain and ensuring that ingredients and supplies are delivered on time and in the right quantities. By working with a procurement specialist, businesses in the hospitality industry can improve their efficiency and reduce costs.
6. Product Differentiation
Competition is tough, but your hospitality industry business can differentiate itself from others by being a market leader in procurement. With suppliers looking for creative ways to attract high-quality clients, it’s vital that you stay on top of trends and be fully aware of their evolving offers.
To do so, it’s important to invest time into researching your company’s needs—through studies, surveys, or consultancies—and look out for opportunities to expand existing relationships with preferred suppliers while cultivating new ones.
7. Quality Assurance and Continuous Improvement
The hospitality industry in the United States is always looking for ways to improve the quality of its services and products. One way to do this is through procurement and sourcing. By working with outside companies that specialize in providing quality goods and services, the hospitality industry can ensure that they’re getting the best possible products and services available. This can help with quality assurance and continuous improvement within the industry.
8. Customer Service
Customer service is at its best when it’s personal. Hotel guests want a genuine experience from hotel staff, not just another dull transaction.
Part of delivering a truly unique customer experience comes from effective procurement. Not only does good sourcing lead to products that are as good as they can be for your customers, but it also allows you to get those goods at a great price. By keeping overhead costs low, you can pass savings on to your guests—and earn their loyalty in return.
9. Brand Protection
One major challenge for large, multi-unit hospitality companies is brand protection. It can be very difficult to get a good handle on everything your company is purchasing from a variety of suppliers. Plus, your competitors are certainly trying to take advantage of any gaps they can find.
Procurement software may seem like an investment you don’t need right now, but it could save you money if you get a better grip on what your purchases are doing or not doing for your brand.
Final Thoughts
Procurement and sourcing are important aspects of the USA hospitality industry. By understanding the role these activities play in the industry, businesses can better position themselves to succeed. It’s also important to keep in mind that the procurement and sourcing landscape is constantly changing, so it’s essential to stay up to date on the latest trends and developments.
