U.S. hotels spent nearly $16 billion on products last year, according to a new white paper from the Hospitality Research Group (HRG), PKF Consulting's research affiliate. And more of those transactions are taking place online as the field of web-based procurement providers broadens.
"We believe most procurement by the hotel industry will take place online within the next 10 years," says Jack Corgel, managing director of applied research for HRG and one of the paper's authors.
The white paper was based on a comprehensive study HRG did for hsupply.com during the first quarter of 2000. The firm set out to determine the size of the market for products used in hotels by product category, hotel market segment and geographic region. Among the findings:
Hotels in the U.S. spent an estimated $2.89 billion on operating expense items, such as guest supplies, linen, china and office supplies.
U.S. hotels ordered an estimated $2.51 billion in noncapitalized furniture, fixtures and equipment (FF&E) and another $3.85 billion on capitalized FF&E. The average capitalized FF&E expenditure was $1,321 per available guestroom.
Hotels spent about $540 on complimentary food and beverage (F&B) items (e.g., free breakfast ingredients), $6.06 billion on other F&B items and another $570 million in F&B operating supplies.
The average per-available-guestroom expenditure across all segments was $4,079. The range was $1,237 for budget properties to $8,919 for luxury properties.
Hotels on either coast spent more on procurement.
In addition to helping procurement companies measure the size of the market, the findings of the study provide useful benchmarking data for hotel managers.
"By segmenting the data into a variety of product categories, a hotel operator has the opportunity to compare their property's procurement expenditures against the average for other hotels of similar marketing orientation and geographic location," says Corgel. "This is becoming a crucial model for hotel managers given the strong desire to use the Internet for supply-chain management."
By Megan Rowe