Hotel Development Insider

NEWS AND UPDATES FROM THE HOTEL DEVELOPMENT INDUSTRY
  • Zeke C. Cooper

Experts Discuss Procurement in Current Market

Recently, Jessica Elvert, DreamCatcher Hotels Director of Creative Services, attended a virtual Panel Discussion featuring major Procurement Agents, presented by the Hotel Design Expo.

Panel members included representatives from Carroll Adams, Benjamin West, Neil Locke, The Parker Company, The Cardy Group, Purchasing Management International.


Regarding trends being seen by procurement agents in the current climate, here are some important takeaways:

  • In their experience, there are fewer new builds going on hold unless they were in very early stages.

  • The Procurement Agents are still busy with projects, just not “ridiculously” busy.

  • Renovations were more likely to go on hold but some have been accelerated.

  • They are still seeing RFPs come in and contracts for future work being awarded

  • Projects that make sense seeming to continue

  • Some say next year may be when the real slowdown happens; unless a vaccine is developed

  • Agents are trying to rely on more established vendors with a proven history of performance

  • Buyers are hesitant to enter into contracts that are cash before delivery, instead they are willing to agree to cash released upon proof of shipment (not a significant difference to the vendor, but is a lot safer to the owner)

  • Owners and Agents are requiring photos and more frequent status updates from vendors

  • There is an increase in vendor references required from banks and proof of financial stability — added in the RFP process

  • Owners/Agents are insistent on Spreading out deposits

  • Agents are recommending that owners/developers lean in on your partnerships

  • Vendors are asking lots of the same questions about the customer

  • Some owners requesting/requiring not to use vendors from China (pre-COVID-19 due to tariffs and continuing)

  • From a current owner/agent viewpoint, domestic suppliers feel safer for US projects, but owner must be willing to spend extra money (is extra front end cost worth it to mitigate risk?)

  • Chinese manufacturing is more up to speed compared to other countries… so it is actually one of the best options as they have so much available production capacity presently**

  • Asian supply chain is very active compared to other regions, with more factories up and running while other regions are shut down.

  • Many of the RFPs coming in were for upper upscale boutiques, upscale properties, high end restaurants and casinos hotels (taking advantage of shut down and were more likely to accelerate project)

  • Owners are going ahead with model rooms but some are pushing back the project itself

  • Slow climb back to normalcy. Later 2021 when things pick up. Maybe some of the new hotels will not open—opportunities for buyers to pick up bargains on new, unfinished or distressed properties.

  • Mixed use development is likely to slow down

  • Some see the multifamily and senior living markets increasing

  • Over-communicating even more important than ever

  • OSE shift – biggest change in reaction to COVID – infrared Halo, foggers, add self-clean packages for guests, air purifiers, finishes on furniture need to hold up to disinfectants – need higher standards for durability, less texture, digital check-in processes


Our team at DreamCatcher Hotels is committed to being informed and staying ahead of the industry norms. For more information on this topic, feel free to contact Jessica at JElvert@DreamCatcherHotels.com.

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