For U.S. tariffs on furniture, fixtures, and equipment (FF&E) used in hotels,especially this matter that trade tariffs on Chinese imports have become a concern for developers in all industries.The goods being affected amount to $250 billion and span nearly every sector.
- Most Chinese products arriving in the country after September 2018 are subject to taxes. *
- Much of furniture, fixtures, and equipment (FF&E) are imports from China and Mexico, among other countries. Even the brand-mandated prototypes often are imported FF&E. **
- Since brand prototypes continually evolve and update, the stockpiling of FF&E before tariffs began was not an option for hoteliers.
- The cost of domestic manufacturing also will increase as smaller parts are still sourced from countries like China.
- Whether you import FF&E or buy domestic, taxes will affect business.
- The industry experts estimate the tariffs to reach the following increases:
- 20% tax increase on stone goods
- 10% tax increase on finished goods
- 4% tax increase on fabrics ***
- This present economic situation increases costs for hotel stakeholders looking to renovate and construct new properties.
- Higher costs eventually will pass down to consumers who will have to pay higher ADR (average daily rate).
- Hoteliers must discover more economical ways to purchase FF&E.
Potential Solutions and Benefits
- Hoteliers can work with designers who understand the need for flexibility in purchasing their FF&E.
- Understanding brand standards for the different flags may help hoteliers choose to focus on developing hotels that require simpler FF&E plans.
- As industry and exports shift to other countries and localities, hoteliers can partner with designers who maintain the most current understanding of the FF&E industry.
As a top hospitality furniture manufacturer in China for over 20 years, Bestar Hospitality customizes fine casegoods and upholstered seating for hospitality, senior living, student housing, restaurant,apartment and more.