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FedEx, UPS and the Internet Bring About Big Improvements
 in the Procurement Function for Hotels

By Christopher Boyd, The Orlando Sentinel, Fla.McClatchy-Tribune Business News

Feb. 26, 2007 - Those who haven't stayed in a fine hotel lately might have a hard time imagining how luxuriant the whole experience has become. Giant vases from the Far East and African carvings adorn lobbies, while guest rooms are embellished with marble countertops and goose-down comforters.

Increasingly affluent and well-traveled guests expect pampering, and hotels are eager to satisfy. As competition at the hotel industry's high-end grows, the emphasis on unique furnishings, fine cuisine and personal pampering has never been greater.

"The haves have a lot more now than they ever had," said Peter Jarvis, president of Triar Seafood Co. in Hollywood, Fla., a hotel supplier. "They are demanding the best, and they are willing to pay for premium goods and services wherever they go."

Internet buying has made a big difference. So have huge improvements in shipping, allowing fresh flowers and other perishables to be delivered to a hotel room overnight from almost anywhere in the world.

"What used to take weeks and weeks to do with catalogs is now done far more easily with the Internet," said Abe Pizam, dean of the Rosen College of Hospitality Management at the University of Central Florida. "You can now link your needs to your supplier's delivery system. When you have a need, your supplier can respond automatically."

Big business

Satisfying the aesthetic appetites of hotel guests has given rise to big business. Regional suppliers have expanded their reach, in many cases acting as middlemen for far-flung international deals. The hospitality industry's leading procurement service, Avendra in Rockville, Md., has grown from an idea in 2001 to a business with $2 billion in purchasing power, 4,500 hotel clients and hundreds of suppliers.

Dennis Baker, Avendra's president, said the hotel industry is a tough customer, with a diverse assortment of brands that each has its own standards.

"It is an industry with a tremendously fragmented supplier base and a very fragmented buyer base," Baker said. "Our job is to facilitate sourcing. We are constantly looking for the best suppliers with the best prices, and we are responsible for making sure everything keeps moving."

Avendra taps a variety of suppliers, filling needs both simple and unique. American Hotel Register, which publishes a 2,200-page catalog of hotel essentials, is one of its key connections.

"We process maybe 12,000 orders for Avendra each month, which is mainly for operating supplies," said Bob Schmidt, American's senior vice president for sales. "Ten years ago, this was an extremely local, fragmented business. A 200- or 300-room hotel could have had six or eight people doing purchasing. Now hotels rely on companies like ours to take the kinks out."

As American makes connections for things like 600-thread-count sheets to table linens, Avendra uses American and its own staff to track down specialty items.

"At the higher end, hotels aren't cost-conscious," said Chris Owens, Avendra's commodity manager. "Hotel guests have a certain expectation about how the parking guy's uniform should look, or how the garments that the people serving cocktails should be tailored. Hotels have begun partnering with Calvin Klein and Brooks Brothers to get what they need."

The web of marketing relations grows more complex all the time, Owens said. Hotels not only dress their staffs in fine clothing, they make the clothing lines available in their gift shops.

"The folks that are greeting you are wearing garments that you would wear yourself," Owens said. "They are highly recognized retail brands, and are often available for sale."

Ron McAnaugh, general manager of the Orlando World Center Marriott Resort, said mattresses, sheets, duvets and other items that are part of his hotel's furnishings are available for purchase to customers online.

"We are always looking for ways to stay ahead of our customers," McAnaugh said. "We are always looking for ways to deliver."

Finer dining

Food is another important vehicle hotels are using to distinguish themselves. Not long ago, hotel food suffered a deserved bad rap, but standards for many have improved dramatically. Today, top-ranked steakhouses and fine restaurants are uprooting unexceptional and predictable dining rooms.

"Hotels are losing a lot of business because they didn't have a reputation for good food," said seafood supplier Jarvis. "You want to give people the opportunity to spend as much money at your venue as possible, so you add nice restaurants, spas and other resort features."

The Grande Lakes Orlando resort restaurants, run by noted chefs Norman Van Aken and Melissa Kelly, offer lodgers a culinary option that makes staying put a palatable alternative to a night on the town. A Ritz-Carlton and a JW Marriott hotel operate side-by-side at the resort off John Young Parkway.

"Hotel restaurants were once phenomenal, then that went away and now it's coming back," said Steve Contos, Grande Lake's managing director. "Hotels have become places with some of the best restaurants in town. Consumers are driving it. They come with high expectations, and they are well-educated about what they want."

Naturally, better restaurants have placed new demands on suppliers, who now need to scour the planet for the ingredients that hotel chefs demand.

"A lot of hotels have upgraded the quality of their chefs, and chefs in America are cooking really good food," said Henry Wainer, president of Sid Wainer Specialty Produce and Specialty Foods in New Bedford, Mass. "The demand for the best extends to room service. People want fresh, regional foods."

Wainer's company supplies hotels throughout the United States. In order to meet the demand, it now has a farm in France where regional cheeses are aggregated and ripened. And it has many relationships with producers around the world, who will ship food when it is needed.

"Drive down the road and you will see FedEx and UPS trucks everywhere," Wainer said. "They show how easy it is to move products from anywhere to anywhere today. We supply 23,000 restaurants across the United States, and all the major hotel chains."

As the supply chain grows more elaborate, hotels say the ordering process is actually becoming simpler.

"We now have a large, well-organized market, and there are a lot of vendors now available to deliver products," said Tom Murray, chief operating officer for America's Intercontinental Hotels.

Intercontinental uses Avendra to procure some of its products, but it also has its own supply-chain management subsidiary to outfit what is the world's largest hotel company with 535,000 rooms worldwide.

"The choices mean that not only can you get the best price, but you can also access the best quality," Murray said. "In the end, that's what our customers want."

Christopher Boyd can be reached at 407-420-5723 or cboyd@orlandosentinel.com.

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Copyright (c) 2007, The Orlando Sentinel, Fla.

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