Cost Control Hospitality Technique

Choosing the Right Suppliers

In the context of a cruising speed operation or a hotel opening, the selection of suppliers may vary between routine necessity and the act of survival. Why neglect it? Perhaps perceived as random, time-consuming, or even subsidiary, the comparative study of suppliers is going to be one of the best moments of our day, thanks to three simple approaches.

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A few quick techniques to compare and contrast your providers will seem as fun as sipping a coffee. A few months before a hotel opening, a pile of suppliers to benchmark is waiting on the desk.

Mattresses, sheets, sponges, hospitality products, coffee machines, washing machines, dryers, breakfast, wine list, dishes, PMS, Channel manager, Webmaster, Laundry…The list is not exhaustive, is it ever to make the most of an establishment?

In this article, I share with you the three most amusing examples of benchmarks, with three different and complementary approaches.

A benchmark has a simple objective: in a specific context, to help you make the best decision.

1. Laundry, Cost Approach

When an item has a strong impact on the operating account (>10% of variable or fixed costs), it is preferable to give priority to the cost criterion.

Laundry (cleaning of sheets and sponges) is one of these very greedy budget lines.

For linen (sheets, mattresses, pillowcases), put external cleaning and linen rental in competition with each other.

Use the in-house cleaning method if you do not have a dedicated laundry area (this budget is often to be excluded in hotels where every square meter counts).

From the outset, narrow your selection down among the referenced launderers, such as the Cercle du Propre, a network of external cleaning professionals.

You can be assured of continuous, high-quality service from a trusted service provider.

Laundry is too vital in a hotel establishment to avoid a pre-selection, already carried out by the professionals who make up the network.

Case study

For laundry, the cost criteria is the most important.

Linen cleaning (flat sheets, fitted sheets, pillowcases, comforters, bolsters)

At the QOC, I excluded the method of internalization of cleaning because there is no space available for it.

It is calculated that :

  • the external cleaning of the linen would amount to 127 000 €.
  • instead of 210 000 € for the linen rental.
  • for the first two years of operation.

You can find and use the Comparative Linen Methodology.

I reinforced this economic choice by the presence of a full-time housekeeper, who constantly checked the shipments and returns of linen.

Without a prior and a posteriori control, external cleaning can drastically reduce your original stocks.

Some unavoidable losses are to be considered in the context of careful control. They are, however, minor compared to the economic delta of the operating account.

To make it easier to locate and identify our linen, we have customized it by the linen supplier, in accordance with our COQ image, Made in France.

We certainly reinforced the axis of our communication, first of all, for concerns of good economic management.

Cleaning of Sponges (face towels, bath towels, bath mats)

I made a similar comparison between internal cleaning (we had a smaller space dedicated to this possibility, with washing and drying machines), external cleaning and rental.

It is arbitrated that internal cleaning is the most economically advantageous:

  • 24,000 € for the first two years.
  • instead of 56 000 € for external cleaning of sponges.
  • instead of 80 000 € for the rental of sponges.
  • for the first two years of operation.

You can find and use the Comparative Sponges Methodology.

Acquiring a washing machine and a dryer seemed to me the most profitable solution over the next two years.

The equipment allowed a reactive and autonomous washing and drying from the suppliers.

Six months later, I realized my wrong selection.

I hadn’t measured the overall cost impact: the redundant use of the washing machine without a limescale filter in Paris was gradually greying the sponges.

This waste of hard water meant that we had to buy back the entire stock. The installation of the filter on the washing machine had not been costed and it was consequent a posteriori.

On the other hand, I hadn’t calculated the work imposed by the counting and folding of the towels either. The time of the breakfast lady was dedicated to this activity, instead of contributing to the cleaning of the rooms.

Thanks to the Sponges Methodology spreadsheet, I was able to revise my copy and re-arbitrate between internal and external cleaning on the basis of hotel occupancy.

A benchmark does not exclude casting errors, it allows you to review your choices quickly and methodically.

For heavy operating lines, the cost criterion is decisive.

2. Bedding, Quality Approach

There are budget lines that represent so much of the quality of an institution that it doesn’t matter how expensive or cheaper it is.

The most important thing is to maximize customer satisfaction.

The Quality criteria is intended to carry the most weight in the choice of these suppliers and products.

Bedding is, in my opinion, the most iconic example of Quality in an establishment.

The hotelier sells above all an ultra-serene, ultra-comfortable sleep. The Quality of the mattresses is to be assured at all costs.

Case Study

On the first spreadsheet, Comparative Methodology Mattresses, I have assembled the functions that seemed to me determining in terms of Quality,

by comparing the three selected competitors.

By selecting three discriminating quality criteria highlighted in yellow in the Method :

– the after-sales service, in this case the most important in case of deterioration of the mattresses, which would handicap the sale of the room.

– The carcass synonymous with the quality and durability of the product.

– The “Icon” function, which is the story we would tell our customers after their night’s sleep about their mattress.

A flagship product of the room is to be selected according to its tangible quality and to the dream function inherent to a night in a hotel.

50 professional mattresses and box springs do not have a neutral impact on cash flow and depreciation.

To be completed by a Comparative Bedding Rate where the rates before and after two negotiations are summarized.

The heaviest criterion was indeed the quality, but the cost, although secondary, could not be excluded for a global photograph.

In this case, I arbitrated in favor of the provider Nid d’Or for its quality:

– Product: Its functions were the most advanced.

– After-sales service: The sales representative was constantly moving from one hotel to another when necessary.

Fortunately, its rates were the most attractive: icing on the cake.

On strategic products, prices are always negotiable but it is the quality criterion that prevails.

3. The Amenities, Brand Image Approach

At the COQ, my selection turned towards the value of “Home sweet home”.

While Amenities (Hospitality Products) are particularly appealing to the customer, they don’t have the availability or the reflex to learn about the brand and buy it.

In the spirit of the Hotel as at Home, the Host will inform you about the products they use and is always open to share their tips.

We have developed with the signature Rituals in Holland and the local Parisian supplier One Touch their very first Hotel partnership.

The COQ guest always has in his room a coupon for a 20% discount on all Rituals products in the Boutique,

5 minutes from the Hotel, at Printemps Place d’Italie.

At Patio Gallieni, I wanted to develop strong partnerships with local providers.

The building is in the heart of Fort-de-France. Our moto is the easy and true discovery of Martinique in the North and South, without omitting the heart of the city.

I sourced the welcome products from a local supplier, the Savonnerie Antillaise, which exclusively promotes local production.

Made in Martinique, they are scented with local lime, aloe, pineapple, guava, coconut.

The plastic packaging and unit packaging is nevertheless regrettable.

The offer of a Dispenser and liquid soap in bulk is indispensable in the inevitable sustainable tourism.

Your suppliers or service providers are above all in your image on the products that your customers use.

Amenities (hospitality products) give a deep meaning to the Brand Image.

On the products that are directly subject to customer perception, priority is given to the Brand Image of your hotel.

The Essentials

Justify your choice with the rejected suppliers in your benchmark: it’s a second chance for them … and for you.

A supplier rejected one day can become your best future supplier: don’t hesitate to renew your benchmarks every year.

Share your benchmarks with your hotel competitors: a grouped negotiation is worth hundreds.

Invite your suppliers to share moments in your hotel: they will often give it back to you with equivalent gestures.

In a future article, we will consider the methods of Prospecting Company Clients, essential to the mattress of your occupancy rate.

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