How Top Procurment Companies Can Help You Adapt In Times Of Chaos
If there is anything that most people may be able to agree on lately, it’s that 2020 will forever challenge previous assumptions about many tried and true business practices. The procurement of furniture, fixtures and equipment for new construction and renovation projects is certainly no exception.
With travel plans of many people having been put on hold, hotel occupancies have plummeted to levels never before seen.
As a result, the pipeline for new hotel construction and property refresh projects is full of projects that have been put on hold.
While peaks and valleys have long been a part of the hospitality industry, most industry pundits agree that it could take some time before travel returns to pre-Covid19 levels and that the most recent downturns in memory, namely the collapse of financial markets in 2008 and the events of 9/11, have been eclipsed in terms of disruptions to the industry. According to recent data provided by STR www.str.com, projections for hotel occupancies for year end 2020 sit at 39.8%. This is well down from 66.1% 2019, 60.4% in 2008 and 63.7% for 2001!
Additionally, besides the obvious reluctance to move forward with plans as a result of diminished occupancy rates, capital markets have been less than forthcoming with the money required to proceed.
The good news is that if history has taught any lessons it is that this too shall pass, and the majority of top purchasing companies have navigated through these downturns and when things start moving again are already preparing for this eventuality.
However, this time has several other variables involved that present additional challenges.
Key among these will be a flood of orders hitting when many companies will have been either forced out of business, or will be operating at diminished capacity. Add to this the need to adhere and adapt to new cleanliness protocols, product lead times are likely to be stretched out beyond recognition, particularly product coming from overseas.
In addition to volume purchasing power, the processes needed to proactively identify and remedy product delays will be vitally important to project planning. Unless you have the internal resources that manage purchasing, now would be a great time to begin researching a few qualified hospitality purchasing prospects for consideration.
With travel plans of many people having been put on hold, hotel occupancies have plummeted to levels never before seen.
As a result, the pipeline for new hotel construction and property refresh projects is full of projects that have been put on hold.
While peaks and valleys have long been a part of the hospitality industry, most industry pundits agree that it could take some time before travel returns to pre-Covid19 levels and that the most recent downturns in memory, namely the collapse of financial markets in 2008 and the events of 9/11, have been eclipsed in terms of disruptions to the industry. According to recent data provided by STR www.str.com, projections for hotel occupancies for year end 2020 sit at 39.8%. This is well down from 66.1% 2019, 60.4% in 2008 and 63.7% for 2001!
Additionally, besides the obvious reluctance to move forward with plans as a result of diminished occupancy rates, capital markets have been less than forthcoming with the money required to proceed.
The good news is that if history has taught any lessons it is that this too shall pass, and the majority of top purchasing companies have navigated through these downturns and when things start moving again are already preparing for this eventuality.
However, this time has several other variables involved that present additional challenges.
Key among these will be a flood of orders hitting when many companies will have been either forced out of business, or will be operating at diminished capacity. Add to this the need to adhere and adapt to new cleanliness protocols, product lead times are likely to be stretched out beyond recognition, particularly product coming from overseas.
In addition to volume purchasing power, the processes needed to proactively identify and remedy product delays will be vitally important to project planning. Unless you have the internal resources that manage purchasing, now would be a great time to begin researching a few qualified hospitality purchasing prospects for consideration.