At first glance, one might assume that hotel inventory management is exclusively focused on the main type of “inventory” offered by hotels: available rooms. After all, a guest’s hotel experience depends on much more than the mere fact of a room being available.
While the rooms that are booked by guests may be the hotel’s primary inventory, successful hospitality operations are heavily dependent on what is considered the hotel’s secondary inventory. This includes all additional products and raw materials that will be used by guests — such as room supplies, items sold in an on-site gift shop or convenience mart or the food and beverages sold at the hotel restaurant or bar.
This secondary inventory can vary significantly from hotel to hotel. In terms of food amenities, some hotels may offer little more than a vending machine, while others offer multiple on-site restaurants.
Regardless of the scope of a hotel’s amenities, however, strong and reliable hotel inventory management is essential for improving the bottom line and delivering a positive (and consistent) guest experience. In fact, research from Cornell found that “operational consistency is critical in a hotel’s overall rating; avoiding operational kinks is more important than looking for the occasional ‘wow’ factor.”
In other words, providing a consistent experience is one of the most important aspects of the hotel experience for guests, regardless of whether they’re staying at a cheap motel or a luxury resort. And hotel inventory management can make that happen.
Which Product Categories Do You Need to Consider in Hotel Inventory Management?
When it comes to a hotel’s secondary inventory, much of the focus tends to be on the supplies that can’t get re-used. For example, the hotel restaurant will require significant management of the ingredients that are used in its recipes. Hotel rooms need to be restocked with fresh soap and shampoo after each visit.
However, hotel inventory management should also account for supplies that will be re-used repeatedly before eventually needing to be replaced. This could include towels, sheets and blankets. It would also include furnishings such as a television or bed.
Even though such items may have several years of use, they will eventually need to be replaced. If you don’t have a way to track the age and condition of such items, guests may eventually start to complain about uncomfortable beds or out-of-date TVs.
Then, of course, there are the supplies that guests never interact with directly, but that still play a prominent role in delivering a quality hotel stay. Cleaning supplies are essential to sanitize rooms after a guest checks out. When it comes to laundry operations, a hotel might outsource most laundry to reduce water expenses, or it might have its own on-site commercial laundry facility (which would require plenty of detergent, bleach and so on).
Needless to say, each of these product categories will have vastly different replenishment requirements. Fresh ingredients for the hotel restaurant may only have a shelf life of a few days, while other types of inventory will have a lifespan of several years.
Order management will help you avoid over-ordering or letting items go out of stock or beyond their useful life. Some systems even offer auto-procurement so that replenishment orders are placed when an item’s stock reaches a set level.
A strong hotel inventory management system provides a single, comprehensive place where you can keep track of all inventory that is relevant to your bottom line. Complete visibility into inventory levels and replenishment requirements enables your team to submit vendor requests as soon as they are needed — which makes it much easier to ensure that all unbooked rooms will be ready and available for guests to use.
Understanding What Your Guests Actually Want
A reliable hotel inventory management system can give you direct insights into which of your amenities are actually being used by your guests — and which ones are helping or hurting your bottom line. Research from Gallup reveals some noteworthy trends that can have a direct impact on your inventory management choices:
“When asked which hotel products customers would give up to lower costs, more than half of guests strongly agree they could do without the in-room bar [and] robes […] About half of guests overall strongly agree that they would be willing to pay more for significantly improved in-room television, bathroom soap, and complimentary Internet. Luxury customers strongly agree that they would pay more to improve bathroom soap products; upper upscale and upscale customers would improve free Internet; and upper midscale, midscale, and economy customers would like a nicer television — and would be willing to pay for one.”
While these research trends can serve as a good starting point when deciding what to prioritize for your own hotel inventory management needs, the ability to gain an in-depth understanding of what your actual customers use and want can be even more valuable.
For example, by tracking inventory consumption at the hotel restaurant, you can avoid poor demand forecasting that leads to excess inventory of perishable ingredients that are rarely used and often go to waste because they are used for less popular recipes. Such information could even help your restaurant streamline operations by cutting unprofitable and unpopular dishes from the menu.
Of course, hotels should also regularly collect feedback from guests to gauge if any furnishings or amenities are lacking. While hotel inventory management can help you track when items like bedding or towels should be replaced, you should never ignore customer complaints that something isn’t living up to guest expectations.
Hotels that deliver what their guests want will dramatically improve customer loyalty and guest retention. Satisfied guests are more likely to become repeat customers, leave positive reviews or use positive word of mouth to share their experience with others — all of which can help your bottom line.
Improving Supplier Relationships
Another key aspect of a strong hotel inventory management system is that it will help you better navigate supplier relationships. Hotels work with a wide range of suppliers — and quite often, choosing the right supplier can make all the difference in delivering a quality guest experience and maintaining profitability.
As Hotel Management reports, “The day-to-day management of the supplier should be thorough and ongoing to ensure accurate pricing, high quality products and consistent service levels. Ideally, hoteliers will have the clout to hold suppliers accountable and have a process in place to successfully and quickly resolve any issues which may arise. In addition to cost, quality and service, it is imperative that the hotel diligently manage and controls the entire supply chain, measuring each supplier’s performance with consistent audits and standards against which those suppliers must perform.”
A strong hotel inventory management system makes it much easier for hotel managers to control and evaluate their supplier relationships. This can be especially important during times of inflation, when a vendor’s price increases could necessitate switching to a new supplier. Alternatively, supply chain issues could require working with an alternate vendor when the primary supplier is unable to fulfill an order.
Hotel inventory management allows you to track vendor performance in key areas such as the speed of order fulfillment, item cost and delivery accuracy and quality. Such systems help hold suppliers accountable for their work. If a vendor is significantly raising prices or experiencing frequent issues with order accuracy and quality, you can use quantitative information to identify that it is time for a change.
Increased accountability encourages vendors to focus on creating a win-win business partnership with your hotel, rather than trying to simply cut their own operating expenses. Digitized invoicing and requisitions, automated orders and other aspects of a strong hotel management system can also make life easier for suppliers by providing a consistent and reliable day-to-day relationship.
With you and your suppliers better aligned, you can avoid common pitfalls like missed deliveries or low-quality shipments that don’t just hurt these business relationships, but ultimately harm the guest experience as well.
Create a Better Hospitality Experience With BirchStreet Systems
While hospitality procurement processes can be complex, this doesn’t mean a reliable hotel inventory management system is out of reach. BirchStreet’s cloud-based Procure-to-Pay automation system is uniquely suited for hotels and the hospitality industry.
With tools like advanced workflow approvals and digitized procurement processes, hotel managers can reach over 80 percent compliance. Item forecasting, immediate pricing and eRFQs help to cut purchasing costs and cycle times, making it easier to purchase the ideal quantity of the items you need to replenish at the best possible price.
If you manage multiple properties, features such as instantaneous inventory counts and recipe management to deploy recipes across properties can further streamline your operations. Accurate insights and reporting enable you to foster the right supplier relationships so you can control costs and not have to worry about supply chain disruptions harming the guest experience.
With Procure-to-Pay automation, you can take your hotel inventory management to the next level by gaining deeper insights into your operating expenses so you can make better-informed decisions that improve revenue.