Martin Hudson, head of procurement client management, Pelican Procurement explains how to find your perfect match.
- A strong relationship that will benefit both sides. You want your suppliers to acknowledge how important your business is to them so they make every effort to provide the best service possible. BUT you also need to show them how important they are to your hotel. So therefore we would suggest setting a contract in place to achieve the best value.
- To achieve competitive prices for any contract, it is essential that it is attractive to suppliers but also meets the needs and objectives of the hotel. It is therefore important that the terms and conditions of supply, length of contract etc are fair and reasonable. This will create competition between suppliers who will be keen to bid for your business.
- The length of the contract term is very important, as too short a contract will not allow suppliers to invest in your business, which will mean that the prices that the hotel pays will be higher. Too long a contract may allow suppliers to try to increase their margin in the latter years of the contract. An ideal contract term would really be between 2-3 years.
- Having a contract in place is not just about price – it is also important to agree service levels relating to distribution, quality of products or services being procured, details relating to price-holds to ensure the client isn’t affected for sporadic price increases, plus it’s important to also consider Contract Price Management negotiations.