Covid-19 brought a robust hospitality industry with record levels of renovation and construction to a near standstill. Many projects went on hold, while others moved forward with heightened levels of wariness over the financial stability and reliability of factories around the world. Enter the purchasing agent – with an expanded role to play in managing the global supply chain to protect Owners’ goods, capital, and schedules like never before. We’re very focused on the following challenges and opportunities:
Vendor Solvency – More than ever, this is the time to rely on trusted vendors whose ownership structure and factory choices are well understood. It is vital to continually monitor vendor relationships, their supply chains, prices, and factory capacities.
Aggressive Bidding & Price Negotiation – The good news is that with less demand for new orders, prices are very competitive. In China, the 25% tariffs are balanced by the relative strength of the U.S. dollar in global currency markets, which gives our U.S. vendors more leverage to negotiate. Chinese factories have re-opened and are at full capacity. Vietnamese factories have been relatively unaffected by Covid-19; and factories in Mexico are still under government closure throughout May. In the U.S., Canada and Europe, we are monitoring the situation on a factory by factory basis, as more factories come back online. Currently, there are many opportunities to secure competitive pricing with excellent lead times.
Terms & Deposits – In addition to negotiating the best possible terms, we require photo evidence to pinpoint where a product is in production and shipping, and hold retainage whenever possible.
Transportation – Cost containment is important in a time of load consolidation and restricted, costly airfreight. We sort through re-prioritized ocean transport, reduced port hours, and local freight loading restrictions for each shipment.
Opportunity – Ironically, in many ways, this is the ideal time to renovate. Prices are more competitive than they have been in years, the supply chain for raw materials is wide open, and low hotel occupancy levels mean less displaced revenue and guest disruption. We hope the industry begins to gain traction in the coming months and can take advantage of this situation.
We are in daily collaboration with project managers, designers and vendors to optimize results for our clients are hopeful for the health of our industry and the world.