Hospitality Procurement: Top 5 Common Problems

Procurement is vital in the hospitality industry. Its purpose is not just to effectively supply the company but also to create value through superior quality goods and services.

Hospitality businesses, like all companies that acquire products and services in the modern economy, require proven, cost-effective solutions to their problems. In this article, we’ve listed the top five common problems in hospitality.

Photo by Marten Bjork on Unsplash 

1. Lack of E-Procurement Integration

Without a central e-procurement solution to manage these procurement responsibilities, even the most experienced procurement managers may find themselves facing a constant stream of difficulties.

Failure to identify and implement an e-procurement solution for your company’s specific needs can lead to missed or duplicated orders, erratic spending and lost chances to form new alliances with suppliers for higher cost savings.

2. Poor Planning

In a seasonal industry like hospitality, it’s difficult to determine how much and when to buy a certain item. People want high-quality products and services, and you don’t want to come short, so you may have to spend more than you need to ensure that customer satisfaction does not decline.

Also, if you load up on items while they’re cheaper but don’t use them, you’ve effectively squandered your resources, lost time and worked on managing storage that you didn’t want to use.

3. Ineffective Supplier Relationships 

Developing excellent relationships with suppliers is crucial to the success of your business. Without them, you may lose out on profitable offers, bulk pricing, or even strategic agreements that can generate not just savings but also help your company achieve its objectives.

An e-procurement solution makes it easy to capture and exploit information for mutually beneficial partnerships across the supply chain in an industry like hospitality. Close partnerships make it simple to keep clients pleased while also adding value through high-quality goods, services, and support.

4. Choosing Cost-Saving Over All

In an ideal world, top-rated goods and services would be abundant, inexpensive, and free. In the real world, though, high expenses and limited budgets can push you to focus on lower prices rather than offering the products your clients anticipate and require. However, procurement solutions play a vital role in using opportunities to create value rather than save money.

5. Ensuring Regulatory Compliance

Laws change regularly, and new ones get passed. It is critical to be aware of regulations that influence your company in both positive and negative ways.

This can be especially challenging for businesses that operate throughout a country or worldwide, as legislation varies from one region to the next. And if the suppliers are in a different area than your company, this becomes even more difficult to handle. It is vital to ensure that all products conform to the laws of each region you work in.

Bottom Line

E-procurement may play a larger part in the hospitality industry than in others, but it does not have to be more difficult to handle. The right software can help you identify all common problems in your operation and solve them without ever falling behind. At Penny, we can help you do just that. You only have to contact us to get started!



Request Demo for Digital Procurement

Speak with a pennian
(human that’s part of our team) and find out exactly how we can help you

Frequently Asked Questions

Penny is a cloud-based Procure-To-Pay system. penny helps you digitize and manage your full procurement cycle from request to approval. Manage RFQs to vendors, compare quotations, send POs and even payment. penny was designed to make things easy and consolidate all of your organization’s spending needs into one intelligent system.

  • Allocate, manage and monitor budgets by expense accounts, projects, departments, location, teams..etc 
  • Streamlining procurement means requests, approvals, and POs won’t be lost in emails or offline.  
  • History and records of requests and purchases can be extracted and tracked easily via the platform. 
  • Product requests are more accurate through the catalog, and hence avoid purchasing mistakes.
  • Reports and analysis can be extracted from the platform, giving you a consolidated data center for all your procurement activities.
  • penny is cloud-based and an easy to use platform. The action-board gives your team a user-friendly and simple experience.

Yes, penny is designed to handle complex procurement operations. We make EVERYTHING simple. Via the contract management feature, you can set the terms and conditions of your contract, and the system will recognize the products and the vendors of your request and match it with specified terms of your contract. Easy.

Putting you in control of your spending is integral to our mission. penny allows you to create Expense Accounts that match your P&L, and assign budgets to them. For example, you can assign $X for your “Travel Budget” and reflect on the budget before approving a travel request. In addition, penny allows you to set budgets for cost centers like projects, departments, locations, and so much more. With penny, you can extract reports and view your spend per Expense Accounts or cost center.

Yes. If your product search finds no results, you can submit a non-standard request.

Need Some Help?


This site uses cookies to offer you a better browsing experience. Find out more on how we use cookies and how you can change your settings.