Problems and Solutions in Purchase the Department of a Hotel -AM Audit | Audit Accounting Firm in Dubai
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2022/03/03

Problems and Solutions in Purchase the Department of a Hotel

The procurement department plays different roles in different organizations. These roles can be procuring, acquisitions, relations building, corporate social responsibility or customer service.  Though, when it comes to the hotelier industry, the role of the procurement department intertwines with nearly all aspects of the hotel. It goes with all of the roles we highlighted above and further into the inner details like the final customer experience and ways to improve their experiences while at it.

To achieve this level of success, there are definitely problems that are bound to be experienced within this department. Also, there is a need for creative solutions to counter them for the smooth operation of any hotel.

The hospitality industry is always seasonal. It has its peaks and lows, and it can be a challenge striking a balance of when to procure things, and how much of it to procure.  Quality is always a top priority in the hotel industry. With demand for quality from customers, it can lead to over-expenditure, more so during the peak seasons. Alternatively, you can opt to stock up goods, more so perishables, and end up not using them. This is wastage, which translates to a total misuse of the hotel’s money.

To counter this problem, you need to establish a reliable stock inventory system that has a real-time stock management system in place. Such a system will keep the procurement department in check, and will also establish when and what to buy during a peak and off-peak season.

Everything has a price, and more so in the hotel industry, the finer things fetch a higher price. When a procurement department focuses too much on trying to save every single coin as much as possible and lose its value, the hotel is soon bound to fail. 

The key to long-term success on the other hand, is to forge a strategy that is keen on exploiting opportunities that generate long-lasting value rather than just short-term savings. With this, you need a very talented team in the procurement department. A team that has an eye for good deals, better bargains and knows the difference in value.

To ensure customers satisfaction, you need to ensure that quality is uncompromised, and always striving to deliver perfection. So, choose quality over quantity, but also be within your budget while at it.

The state of the relationship with your suppliers is a make or break for the hotel industry. This relationship can be in the way that you treat them, or how they treat your business. Having a great relationship will include the supply of uncompromised quality, timely delivery, great discounts, exclusive offers and deals.  From the suppliers’ point of view, you need to have timely payment plans. Also, ensure there are minimal restrictions in terms of legalities for them. Once they deliver and get payment in time, you are sure that you will establish a good working relationship. In this way, you enable conducive service delivery for your customers.

You wouldn’t want to lose customers just because your supplier failed to supply goods or services to your hotel due to a bad credit history or poor relationship with your supplier.

Conclusion

With the pandemic hitting the hotel industry so hard, and the rise of online competitors like Airbnb, for the ultimate success of any hotel, they need a functional procurement department. The department should be good enough to acknowledge issues that may arise. They also need to find a creative way of solving the issues fast while still maintaining a good customer relationship.

Expert Team

  • Ali Chamas

  • Audit Manager
  • Adel Farag

  • Taxation Manager
  • Farah

  • Accounting and tax Associate
  • Sohaib Basharat

  • Financial Auditor & Tax Manager

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