Procurement Leaders Discuss ‘Way Forward’ For Hospitality Industry

The role of procurement in the Hospitality Sector is very crucial as the industry has specific needs that are not a ‘standard’ like other sectors. The hotel’s essential demands stand out in order to maintain the quality and consistency which is expected by the guests. How has the outbreak of Covid-19 impacted the business of hotels? What role will procurement play in the post-Covid-19 world? Will the relationship between the vendor and supplier undergo a paradigm shift? How will it impact the demand and the supply side of the hospitality sector? 

To navigate the industry through the present crisis, BW HOTELIER brought together leaders across the spectrum of the Indian hospitality, Travel & Tourism and F&B fraternity under its 'Breaking The Pandemic Series' and an apt topic: ‘Procurement – The Big Game Changer’ in association with Hospitality Purchasing Managers' Forum (HPMF). 

The panelist deliberating on the topic included Ouseph Francis - Vice President Procurement - Oberoi Hotels and Resorts; Dr Sanjay Goyal, Vice President Supply Chain Management, Lite Bite Foods; Bharanidharan Ramaswamy, Director of Procurement, Marriott Hotels India; Clyde Fernandes, Associate Vice President - Materials, IHCL; Sudhir Gupta, Head - Procurement, ITC Hotels; Sai Shankar, Vice President Procurement, The Leela Palaces, Hotels and Resorts; and Major Aval Sethi, Head of Procurement Embassy Services. 

The session was moderated by Dr. Nitin Shankar Nagrale, Founder & General Secretary – HPMF; CEO India and Emerging Markets – Quality NZ. He not only moderated the session but highlighted key points, whose consideration becomes important, when it concerns the hospitality sector and the economy to a larger extent. Nagrale said, “The primary resort people need to take is to understand what has happened and what will happen. Once that is done, people need to just wait for some time and be prepared and ready.” 

Ramaswamy of Marriott Hotels India added: “When you talk about this specific current situation, I am sure that a lot of hotels are permanently shut down or temporarily shut and a lot of supply chain related issues are going on. In terms of changes after the lockdown - hygiene levels will increase. I personally feel that we need to elevate the hygiene levels.” 

Clyde Fernandes of IHCL pointed out that the Covid situation is all about, “survival, revival and thriving”. “If hotels are going to reopen soon, the factors affecting the guest’s stay should be handled meticulously,” he said. What will be the implications of this pandemic? Francis said: “While certain categories will be more affected than others, the impact of this pandemic will be drastic, and therefore we don’t expect demand to go back to pre-Covid era immediately”.

Addressing the stress levels and considering the fear among people, Gupta of ITC Hotels felt the situation ‘might get worse’. He said: “The whole prospective is going to undergo a paradigm shift, the way we conduct the business, making us think about new methods, re-conduct the business. The collaboration between the vendor and supplier is going to be of utmost importance. We can act upon it, we can delay the payments, we can look for some kind of discounting procedure but we should have mutual support and discussions.” The condition at both ends has to be well understood. The target should be to have a sustainable relationship for the future, said Gupta.

According to Dr. Sanjay Goyal, this ‘new normal’, calls for “self discipline” and “building trust”, as that will strengthen the workings of any firm. Apart from that, he said, “We need to adopt technology and adapt to the new ways of working, this is the new normal”, which will enable people to learn and grow.

The Leela's Vice President Procurement highlighted a traditional guideline of procurement and emphasized implementing it in a real manner i.e. the right buy with the right negotiated price at the right quality. He quotes this as ‘the right time’ to look at our vendor base and actually bring efficiency.

Talking about the new normal, Major Sethi of Embassy Services said that the new norms around safety will have to be considered by suppliers and the aim should be a ‘two-way benefit’. “From a hotel management and procurement point of view, we will have to strategically involve suppliers into the chain,” said Sethi. 

Concluding the session, Nagrale said the current year will be challenging. “Our job is to convert this challenge into an opportunity,” he added. 

Therefore, the main takeaways, which the esteemed panelists pointed out, included a strategic inclusion of suppliers in the procurement process while carefully weaving in the safety norms; the need for the industry to re-orient itself in order to forge a sustainable partnership with the vendor; how to survive and revive in an efficient manner while discovering new methods of conducting the business; And the hygiene levels would need to drastically improve were some of the key solutions deliberated by the experts.