Hospitality Procurement by lichtplanadvies

The Modern Art of Hospitality Procurement

ospro|Hospitality Procurement is your partner in the fields of operational and procurement hospitality management, focusing on pre-opening & refurbishment activities. Our clients originate from the hospitality (investment) industry, such as hotels & restaurants, residential projects, theme parks, golf courses, hospitals, stadiums, etc. with our main focus on Europe and the Sub-Saharan African region. We also support companies in regaining and enhancing their financial & operational results. Nowadays, hospitality companies continuously grow their businesses and find new opportunities, apart from Europe increasingly choosing Africa as a business destination. With a population of over 325 million, 6 out of 10 of the fastest growing economies worldwide and a strong emerging middle class , it offers interesting investment prospects for the hospitality industry and of course for our business. We specialize in pre-opening & refurbishment projects providing budgets, FF&E and OS&E procurement management services and interior design which can be used as a financial target that specifies revenue goals and expense limits. At this moment, a very interesting development which saves considerable amounts of investment & construction money is the use of capsule or pod modular applications. We partner with specialized companies that have ample experience in the construction of hospitality related venues enabling to support our clients in bespoke module construction! This is a very attractive and cost saving method for large scale projects. Do not hesitate to contact us in finding out more about this method.

As a result from our efforts over the last years we are very proud to announce that we will be opening a new office in South Africa in the near future! Our new office will serve the sub-Saharan countries using the expertise and knowledge we gained over the last 30 years! Our dedicated, experienced team is eager to make any project a success. We support hospitality companies, property owners and investors in being successful! Our mission statement â&#x20AC;&#x153;To enhance client profitability, optimize operational efficiency and perform sustainability in a conscious wayâ&#x20AC;? confirms our endeavour in being the right partner for our clients.

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Creating and Driving Value Todayâ&#x20AC;&#x2122;s challenge in the hospitality industry is to concentrate on leveraging the scale of goods & services and working in partnership with brands that bring added value to the hotel or hotel chain itself. This definitively does not mean that your property is full of branded items and looks like an ever ongoing commercial! Understanding the requirements of your guests for each of your concepts is key! The next step is to match these with operator and supplier capabilities and go forward on items that will surpass guest expectations. Good procurement companies will consult these services to their clients!

As an operator you need to fully understand all that is required and think through the lifecycle of the concept and the products. Talking to suppliers in the early stage of preopening is of utmost importance to gather the information needed. The question to ask is â&#x20AC;&#x153;Does a particular decision make sense for the various spend categories and do we understand the marketplace?â&#x20AC;? When implementing these kind of actions in a professional way, there is a bigger chance that your property will be the customer of choice for its suppliers! And thus working on a firmer partnership. Today, the personalised experience to guests is key to having a competitive advantage in the hotel industry. Hospro is able to support you in making the right decisions for your business

The advantage of Partnerships For long, many companies have discovered the virtue of partnering. When they don’t have all the skills or resources needed to truly delight customers, it makes sense to partner with a company that can contribute those missing pieces. The challenge is in getting two (or more) different and separate entities to act as a single aligned enterprise in the interest of shared customers. By making their processes and systems seamless in service to those customers, all parties can create greater value for their customers and for themselves. Partnering can take the supplier-customer relationship to a new and higher level and improve each partner’s work processes. This is especially a key factor for hotels, restaurants, lodges, etc. and more so in their relationship with procurement companies. Working together as a long term partner rather than a short term business relation the (financial) benefits for both parties will improve tremendously. Here are some questions that partners should ask one another in order to work together more effectively and improve profitability: »» What do you really need from me? »» What do you do with what I provide you? »» Are there gaps between what I give you and what you need? »» What problems might I help you with? »» Am I providing things you don’t need? »» What are the possibilities of standardizing between our companies? Answering these questions will help you and your business partners to help yourselves. HOSPRO|Hospitality Procurement prides itself on being a bit different. Traditional values are sustained and a good reputation is something to be proud of. Good business is building lasting relationships, helping us to grow our assets together. Our combination of market knowledge and expertise ensures the best possible service for our business relations. We support our clienteles with specific recommendations and references to stay focused on the total process.

FF&E Furniture, Fixtures & Equipment All buildings include fixtures and fittings. The property owner’s requirements, drawings and specifications, contracts and health and safety manuals refer to them. However, the term FF&E (furniture, fixtures and equipment) is generally used in the hospitality industry! It is used in valuing the property, where FF&E are classed as movable furniture, fixtures or other equipment that have no permanent connection to the structure of a building or utilities and can be removed by the tenant. As assets they depreciate differently from buildings, and are therefore considered separately. Examples of FF&E include but are not limited to desks, chairs, computers, electronic equipment, tables, bookcases and partitions. Based on hotel category, FF&E constitutes approximately 12-16 % of the total investment. It is a value driver that should not be underestimated, considering that the interior of a hotel reveals within which category it is positioned. Even more important is the comfort factor, which is decisive for whether a guest accepts an establishment, comes again and even recommends it to others. It is thus surprising that FF&E often represents a “black box” in negotiations with operators and project realization for the project developer. Differing perceptions regarding which positions are included in the FF&E budget lead to uncertainties. In order to avoid these, our experience has shown that the following approach is useful: A complete FF&E-budget should include the following aspects: »» Guest room furnishings, including all moveable and non-moveable furniture, decorative lighting, media equipment and for example decorative elements such as curtains and art, etc. »» All design-elements within the guest areas (elevators, restrooms, hallways) »» Complete furnishing of restaurants, bars and conference facilities »» Furnishing of the administrative and staff areas, as well as equipping of all storage facilities »» Large kitchen appliances »» Relevant computer equipment (excluding network) and telecoms user-equipment »» Based on the definition set forth by the operator, this cold also include vehicles and carpeting From service reliability and attention to detail to project management with time sensitivity, our FF&E services help ensure your project remains within its budget and timeline with minimal disruption. A hotel opening is a complex operation; one step in preparation of a hotel is placing numerous purchase orders with suppliers worldwide. The sheer quantity of FF&E and the nature of the items dictate a need for flexibility and choice. Each project has unique features, various F&B outlets, and a list of preferred equipment. To uphold the brand standards of a property, the process of purchasing FF&E is crucial to operational success. To ensure that FF&E (and OS&E) are bought, delivered and installed, sourcing, buying

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and transportation must be optimally coordinated. It needs to meet rigorous requirements and ensure that the right goods arrive at the right site and at the right time. Even when you have selected a supplier it is important that detailed negotiations are undertaken. This is not just about price. Think in terms of â&#x20AC;&#x153;total cost of ownershipâ&#x20AC;?. A cheap product is not so cheap if the carriage costs are huge or if the maintenance contract is onerous. It is imperative that the hotel owner starts the search for a provider during the early planning phase of the project. Hospro can properly handle the full supplying needs of the project, from packing and storage of current FF&E to freight management, delivery and installation of any new FF&E merchandise. Owners and developers will have the necessary tools and information needed to get a project underway, including budget development, financing, and leasing options. Our experienced team can manage the entire FF&E purchasing process for every area of your hotel. We offer personalized attention and complete oversight of FF&E expenses. We work closely with reputable soft good manufacturers to ensure that the products and specifications are custom-tailored to your brandâ&#x20AC;&#x2122;s specific standards. All of our case goods manufacturers use only the highest quality materials and workmanship to ensure not only beautiful furniture, but functionality and durability as well. We leverage the volume of the entire Hospro portfolio to secure best-in-class pricing on all of our products and services, creating extraordinary values for you.

Our team of professionals will ensure that your project, including the design you select and the products and services you need, will be handled with the utmost attention and care from start to finish. We make it possible for you to access inventory and tracking data, which are helpful in following your scheduling and construction-related decisions, and assist in coordination of any necessary scheduling changes. Last but not least, you definitely

need a trained white-glove crew to ensure timely installation of your FF&E in flawless condition without damage to your facilities. Every project is different. Some procurement projects are small and every step of a formal process may not be required. Alternatively, some projects are highly complex or regulated and a generic framework will not be appropriate or sufficient. Despite this, every procurement project follows the same broad process . The key thing to remember is to adapt the process to fit the project.

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OS&E Operational Supplies & Equipment So, now you have a new hotel project on the boards. As a general rule, construction costs are 85% of your costs. Furniture, fixtures & equipment (FF&E) is typically around 10%, with operating supplies and equipment (OS&E) around 4% to 5%. It is axiomatic that your priorities mirror this; focused first on construction, then the FF&E, and only at the end is attention shifted towards OS&E. It doesnâ&#x20AC;&#x2122;t need to consume a lot of your attention, but it should not be an afterthought. The reliability of a procurement team towards the property owner(s) has to be unmatched at the highest levels! Operating supplies and equipment (OS&E) comprehends a huge diversity of products and equipment from china, glassware, silverware, buffetware and linen to uniforms and from housekeeping, front office, back office and engineering equipment to various entertainment systems and leisure facilities. Operating supplies and equipment for a five-star resort hotel easily can exceed 7,000 unique line items and certainly cannot be bought turnkey. There is no standard product list or non-variation bill of quantity for OS&E. The sheer quantity of OS&E and the nature of the items dictate a need for flexibility and choice. Each project has unique features, various F&B outlets, and a list of preferred equipment. To uphold the brand standards of a property, the process of purchasing OS&E is crucial to operational success. The experience of Hospro|Hospitality Procurement will get the best out of your budget, from global sources of specified and contract-quality hospitality suppliers including the contracts you already have in place. Every detail counts. In OS&E every item used is an experience that determines the greatest factor behind guest satisfaction: Impression. With a full range of OS&E items, we help hotels and resorts to create their desired impression. No matter if you are a no frills budget hotel targeting simple backpackers or a multiple-star mega-hotel for the rich and famous, we will surely find something within our myriad of OS&E products that is in tune with your desired identity. With the identification of all specific inventories by sourcing our own database of operational products and

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suppliers, all the way to budget and quality control and final receipt, positioning and construction on-site we make sure not to oversee any unforeseen complication. Many items are in stock, but there are also many items that are bespoke, logoed or specialized that can take up to 12 weeks or more just for production, not including shipping. The objective of a good procurement company is to honor the design integrity of the hotel, source contract-quality goods, honor proprietary products & services and manage the owner’s budget. Well-managed procedures and respecting the brand standards allow us to spend more time knowing and sourcing (new) suppliers and negotiating better conditions. Durable, high-quality OS&E results in content owners/operators and increased productivity. Buying sheets and towels should be easy, this isn’t rocket science! All that’s needed is a shopping list. An d yet, the typical process for selecting OS&E and buying is often, at best, chaotic. Where do you start? How far do you go into sampling? How much time do you take for each item? Who makes the final decision? Take, for instance, a clock radio for your guestroom. There are a lot of clock radios available on the market with new ones coming all the time. Technology is changing all the time as well. Required features need identifying in order to isolate the market search: model number, color, size, etcetera. Price it to see if it fits in the budget. Sample and test three or four options? Make a selection. This is just one example of thousands of items required for the hotel to operate. We have procured OS&E for new construction hotels, refurbishments and reflags. A logical place to begin is to contact the operator, because they operate hotels and should know, right? Be prepared, because there is brand repositioning, technological changes and movement in the executive levels of hotel management that will keep operator’s OS&E lists in a constant state of in-progress “versions”. If they even have a list. Independent hotels usually start from scratch. Brand Standard OS&E changes a lot more frequently than physical plant and brand standard FF&E, for obvious reasons. The operator will identify the OS&E decision makers. Our advise; “Determine your budget and distribute the accountability to the departments for scope, selection and budget controls. The purchasing agent tracking should align with the project budget for accurate I011710 Camrack Ad_HOSPRO 2017 / Morgan tracking.”

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To take advantage of comparative pricing and sampling, the process needs to have its own schedule, identifying the parties to be involved in decision making. Many items within the OS&E list can require the input of the interior design consultant to ensure compatibility of colors and theme. Custom decorative accessories are best manufactured in markets where costs are advantageous to the owner. This could translate into longer times to produce and ship. Then there is budget control. The owner and project team should have a look at the OS&E selections with long-term resupply costs in mind. There is also an overlooked logistical concern with OS&E. After orders are placed, too many items end up warehoused and this massive pile of OS&E needs to be identified, counted, inspected and only then can be distributed to the hotel to prepare for operations. No simple task as a project works to complete construction and FF&E installations. That is why we consider some logistical topics: We require the warehouse to include organized packing lists and turnover documents for proper identification of the deliveries. We schedule OS&E deliveries and access to the hotel site at the most practical times (just as FF&E). Linens and towels can be shipped to laundry service for initial laundering and held until needed. If the laundry is in house, bring the towels and linens to linen storage directly. Any OS&E that needs to be mounted can ship to the FF&E installer to be fixed when they are installing. We stage and label OS&E by department in areas, predetermined in the area turnover schedule from contractor and project team. There are technological solutions to developing and maintaining OS&E lists that are online, editable, shared, and can translate immediately into budget control, approvals, sourcing, purchasing and tracking. Hospro|Hospitality Procurement simplifies the process, reduces the chaos and gives the OS&E buyout enough time. We develop the list of required OS&E for the property and/or source and purchase precisely what is specified by the hotel operator. Furthermore, Hospro is in a position to negotiate competitive rates from all of the leading brands as well as bespoke manufactured items to suit any project requirements. The Hospro Team always is at your full proposal and ready to support you with the challenging issues that come with the construction of any property!

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Direct +31-61-583-1851 [www.hospro.co.za] [roberto.treffers@hospro.co.za]