Hotels are complex businesses with many different areas of operation, from housekeeping to sales and

marketing. One of the key areas that hotels need to focus on is procurement, which involves the buying
of goods and services necessary for the hotel to operate.

There are a number of different methods that hotels can use to purchase the goods and services they
need. In this article, we will explore some of the most common methods and how they work, so you can
make an informed decision about which method is right for your hotel.

1. Direct Purchasing

The simplest and most straightforward method of purchasing is direct purchasing. This is where the
hotel buys goods and services directly from the supplier. The process is simple and straightforward, with
the hotel placing an order with the supplier, who then delivers the goods or provides the service.

2. Indirect Purchasing

Indirect purchasing is a more complex method of purchasing that involves the use of intermediaries.
Intermediaries can be agents, brokers, or distributors who help the hotel to purchase the goods and
services it needs. They may negotiate prices, arrange delivery, or provide other services to make the
purchasing process easier for the hotel.

3. eProcurement

eProcurement is the use of electronic means to purchase goods and services. This can include the use of
websites, electronic catalogs, or electronic procurement systems. eProcurement is becoming
increasingly popular among hotels, as it provides a more efficient and streamlined purchasing process.

4. Group Purchasing Organizations (GPOs)

Group purchasing organizations (GPOs) are organizations that bring together a number of different
hotels to negotiate better prices on goods and services. By pooling their purchasing power, hotels can
get better deals and discounts on the goods and services they need.

5. Reverse Auctions
Reverse auctions are a type of online auction in which suppliers bid to provide the goods or services that
the hotel needs. The hotel sets the specifications for the goods or services it needs, and suppliers then
bid to provide them. The supplier with the lowest bid wins the contract.

6. Joint Purchasing

Joint purchasing is a method of purchasing in which two or more hotels work together to purchase
goods and services. This can be particularly useful for smaller hotels, as they can pool their resources to
get better deals on the goods and services they need.

7. Strategic Sourcing

Strategic sourcing is a method of purchasing that involves the systematic and strategic analysis of a
hotel’s procurement needs. This can include analyzing suppliers, prices, and other factors to ensure that
the hotel is getting the best possible value for its money.

8. Cost Reduction Programs

Cost reduction programs are programs that are designed to help hotels reduce their costs. This can
include negotiating better prices with suppliers, improving purchasing processes, or reducing waste.

9. Contract Negotiations

Contract negotiations are an important part of the purchasing process, as they help hotels to secure the
best possible terms for the goods and services they need. This can include negotiating prices, delivery
terms, and other conditions of the contract.

10. Supplier Relationship Management

Supplier relationship management (SRM) is the process of managing the relationship between the hotel
and its suppliers. This can include ensuring that suppliers provide high-quality goods and services,
negotiating better prices, and improving communication between the hotel and its suppliers.

Conclusion
In conclusion, there are many methods of purchasing in hotels, each with its own advantages and
disadvantages. It’s important to choose the right one that fits your needs and preferences. Whether you
prefer cash, credit cards, debit cards, mobile payments, or prepaid cards, make sure you do your
research and understand the terms and conditions before making a purchase.