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In 2024, with supply-chain issues, inflation, and labor shortages continuing to challenge the hospitality industry, procurement plays an important role in maximizing efficiency, keeping costs down, and enhancing the employee experience. Operating hotels, restaurants, resorts, and other hospitality establishments is complex, broadening procurement’s purview.
Hospitality procurement teams are responsible for acquiring everything from food and beverages to linens, furniture, and even specialized services like housekeeping and maintenance.
According to the Amazon Business 2024 State of Procurement Report, 95 percent of decision makers say procurement can be optimized. The complexity of hospitality procurement and the intricacy of everyday hospitality operations make that opportunity even more pressing.
SkiftX spoke with Tanya Bennett, head of distributed locations at Amazon Business, to explore the key trends and challenges shaping the future of business buying in the hospitality space.
Using Digital Tools to Improve Employee Experience
Reducing time spent on low-value activities and enhancing the use of digital tools for tasks like inventory management can improve the employee experience for hospitality procurement professionals. By making procurement roles more strategic and less administrative, hospitality brands can free up time for employees to focus on infusing every customer experience with a human touch.
“Procurement can empower employees to make smart business buying decisions within a seamless buying experience,” Bennett said.
For example, Carnival Cruise Lines started integrating Amazon Business into its existing procurement systems to provide a seamless and familiar experience for Carnival’s business buyers. Since the integration, electronic approvals have reduced purchasing order processing times from two weeks to a matter of minutes. On the delivery side, transmitting advance shipping notices (ASNs) directly to Carnival ships ahead of time has allowed crews to anticipate what’s coming and easily route every item to the right person or department on board.
“By integrating Amazon Business tools, Carnival Cruise Lines could anticipate their procurement needs more efficiently and acquire necessary products faster,” Bennett said.
Balancing Business Efficiency With Hospitality Complexity
According to the Procurement Report, operating efficiently and managing complexity are the top challenges facing procurement teams today. More than half (52 percent) of procurement decision makers are responsible for making purchases for multiple locations. Of that group, 57 percent make purchases for multiple countries. The sheer scope of these hospitality challenges makes procurement a prime area for innovation, but it also increases the emphasis on strategic deliberation and stakeholder input.
Hospitality procurement teams must balance complexity and efficiency while managing suppliers for a diverse range of items, ensuring timely deliveries across different locations or properties, and optimizing inventory levels to prevent overstocking and last-minute shortages.
Hospitality companies can tackle these challenges with advanced procurement tools that consolidate multiple suppliers, schedule deliveries through predictive purchasing, set policies that guide purchasing, and analyze buying patterns to forecast demand and more accurately predict budgets. For example, Amazon Business allows procurement teams to oversee multiple locations while empowering individuals on the ground to procure their own supplies within set limits and approval workflows.
Moreover, procurement can be optimized between a hospitality company’s corporate headquarters and its franchisees or locations. Using technology and tools, different properties and staff can leverage the corporate headquarters’ collective buying power, while allowing them to procure supplies more efficiently and cost-effectively for their locations. At the same time, corporate headquarters gain visibility over spending across various locations and properties.
Integrating AI and Automation With Existing Systems
According to Amazon Business research, 98 percent of corporate decision makers plan to invest in AI and automation within the next few years. These technologies are essential for automating procurement processes, optimizing operational efficiency, and reducing business costs.
Here are some of the specific ways AI tools can benefit hospitality procurement teams:
- Streamlined buying: Proactive product recommendations with AI-powered search streamline the buying process and reduce decision fatigue.
- Strengthened customer service: Smart chatbots can handle simple customer service requests and triage more complex issues to human agents.
- Enhanced data analysis: Tools like Amazon Business’ Spend Visibility dashboard (available with a Business Prime membership) make it easy to assess purchasing patterns and discover business insights, without requiring manual data collection upfront.
In addition to supporting more robust and reliable decision-making procedures in the short term, AI and automation tools can also help procurement teams build better futures. Predictive procurement models empower teams to forecast future demand accurately and anticipate inventory levels.
“Investing in predictive technologies to foresee and mitigate disruptions is key to building resilience and confidence in procurement operations,” Bennett said.
Meeting Sustainability Goals With Procurement Processes
Sustainability is important to hospitality companies as it enhances environmental responsibility, reduces costs, and meets the growing consumer demand for eco-friendly practices. The procurement report found that 81 percent of organizations have mandates to purchase from certified sustainable sellers. At the same time, 85 percent find it challenging to source sustainable suppliers.
“Because hospitality businesses require such a diverse range of supplies, identifying products with sustainability certifications is a big challenge, as is tracking progress towards corporate sustainability goals,” Bennett said.
Amazon Business offers innovative tools to help hospitality procurement teams align to support their organization’s sustainability standards. The Guided Buying tool (available with a Business Prime membership), for example, helps buyers focus on products with Climate Pledge Friendly certifications. In addition, pre-built Amazon Business Analytics reports make it easy for procurement teams to track their spend on certified sustainable products.
Fostering Collaboration and Decentralization Without Losing Oversight
Empowering non-procurement staff to handle specific purchasing tasks can enhance agility and efficiency. However, maintaining control and strategic oversight is crucial to avoid undermining procurement’s influence. According to Amazon Business, 95 percent of corporate decision makers outsource procurement activities. However, less than half (46 percent) agree that employees outside their procurement teams follow their policies and procedures.
Bennett recommends that procurement teams define transparent guardrails to ensure that decentralizing purchasing doesn’t undermine strategic oversight: “Amazon Business helps procurement managers get the best of both worlds by setting buying policies, spending limits, and approval workflows, all while maintaining visibility over organization-wide spending.”
Procurement Is Evolving to Drive Organizational Goals
As procurement becomes increasingly strategic, it’s no surprise that the discipline is seeing increased investment. According to Amazon Business, more than half (53 percent) of business decision makers expect their procurement budgets to be higher in 2024 than in 2023.
“Procurement is now a key lever to driving organizational goals such as sustainability, efficiency, and technological advancement in hospitality,” Bennett said. “By embracing these changes and leveraging new tools, procurement leaders can become strategic partners and help drive their organizations toward a more agile and innovative future.”
To learn more about Amazon Business for hospitality, click here.
This content was created collaboratively by Amazon Business and Skift’s branded content studio, SkiftX.
