3 ways to drive ROI using purchasing data insights

Lessons for hotel operators

With travelers back — and more conscious of their spending than ever — operators welcomed the below pointers from one of our VPs of Sales on using data insights and the power of group purchasing to become more efficient and profitable in 2023.

1. Scrutinize your purchasing data, translate it into actionable insights and leverage technology wherever possible. Hotel operators with a strategic procurement partner today should access data management portals, receive extensive reporting and insist on account support that helps drive purchasing decisions. Entegra provides clients with expansive levels of added reporting capabilities and strategic support personnel.
   You should require detailed insight into spend reporting that gives you actionable savings opportunities. This knowledge creates transparency between you and your procurement partner. 
2. Gain greater control over your purchasing and improve margins. We see operators spend countless hours on spreadsheets, trying to drive value by attempting to beat market pricing. We encourage you to rely on your procurement partner to address this. To improve margins, focus on two things to start with:
   
   Consolidate. Usually, one contract drives most of the value for an organization. If hotels across your organization are purchasing multiple items outside of the contract, encourage them to consolidate purchases, focusing on the contracted item.
   
   Work with your food and beverage team. The second thing that will impact margin improvement is to enable your team. Give them the flexibility to value engineer their menus if they see prices going up for a category. They should be empowered to make changes in response to market conditions.
3. Create a system of accountability. If you’re working on a scorecard approach, add a line for procurement and support it with the proper metrics. This data will allow your teams to correctly forecast and drive margins in the right direction for your business.

The good news for hospitality businesses is that food and beverage spend (measured on a per-occupied room basis) is back up to pre-pandemic levels. Unfortunately, profits are still suffering because of the increased cost of goods across categories and increased labor costs. While this continues to present operators with challenges, your focus should be on minimizing the impacts with a GPO.

What can you do about it?

Align yourself with a group purchasing organization. More businesses see the value of streamlining their spending through a GPO. The GPO industry is expected to grow steadily in the coming years, due to increasing demand for cost-effective purchasing solutions. Additionally, the increasing adoption of GPO services by small and medium-sized businesses is expected to drive growth in the industry.

If you want to explore getting started with a GPO or switch to relying on the power of Entegra, let’s connect.