Is the Hotel FF&E Supply Chain Back to Normal?
The hotel FF&E supply chain saw its share of challenges as a result of the pandemic. Hotel projects became more difficult to plan and execute, thanks to the disruptions in manufacturing and transportation of product. Delays and costs seemed to spiral out of control.
Fortunately, we’ve seen improvement since then. But our focus now is discussing today’s supply chain – is it all the way back to “normal?” What considerations remain when planning new construction or much-needed renovation projects?
The Hotel FF&E Supply Chain (Past)
Before 2020, it was uncommon that vendors couldn’t meet our requested ship dates or standard lead times when we placed a purchase order with them. But that changed rapidly when COVID hit. Things got worse as the pandemic wore on with shortages of containers, available shipping space, and port congestion.
In early 2022, things reached a boiling point and hindered both domestic and overseas products and shipments. During this stretch, manufacturers faced double or even triple lead times or couldn’t provide a reliable lead time estimate due to a shortage of labor, equipment, and materials for vendors and freight carriers. Freight costs skyrocketed and, at times, were more than merchandise!
The Hotel FF&E Supply Chain (Present)
Fortunately, many of the issues described above improved greatly as of early 2023. Overall hotel FF&E lead times in most product categories were getting closer to what they were pre-pandemic. Many manufacturers retooled operations and increased capacity, anticipating renewed hotelier interest in renovating.
Specifically, casegoods, lighting, and flooring manufacturers have significantly reduced their production lead times. It also helps that ocean freight transit times and costs have been normalizing.
But new challenges have emerged as demand for hotel FF&E has grown. More existing hotels are freshening up their interiors to comply with brand requirements and compete with newer market entrants.
Some FF&E producers are struggling to supply this higher level of incoming orders and facing an overload. Upholstered seating remains a challenge since they don’t have enough trained and skilled workers amid the increased demand. In addition, some ports have labor union strikes and domestic freight companies are still trying to recruit and retain enough drivers.
On a related note, UPS has a looming driver strike scheduled for August 1st if they can’t come to terms with management on a labor agreement. Although UPS might not ship as much FF&E, a driver strike that interrupts the normal flow of packages could put new pressures all across the supply chain. Hopefully, if a strike does occur, the effects will be more temporary.
The Hotel FF&E Supply Chain (Future)
As hoteliers undergo much-needed renovations, we’ve seen increased delays with code inspectors for elevator companies and fire and life-safety systems, which can be essential to consider when planning a hotel project. Although these slowdowns might not affect FF&E directly, they can push back a hotel’s project schedule and opening.
While the snarled supply chain of the pandemic seems to be in much better shape, we expect some manufacturers to continue struggling to keep up with orders while FF&E demand is high. Hoteliers should work with their FF&E procurement providers to build in a buffer to their project schedules to allow for delays from upholstered seating and other vendors. After all, one or two key product categories that don’t deliver on time can hold up an entire hotel from opening.
More U.S. FF&E manufacturers are improving their lead times by stocking needed components and reducing water transit time. The more domestic hotel FF&E producers there are, the faster lead times will become. The cost of products might be slightly higher, but the shorter lead time, lower freight cost, and greater ease of getting replacements if needed can outweigh the total cost.
At Innvision, we work hard to provide the best client service, partnering with manufacturers who strive for active, clear communication and realistic lead times.
We stay connected to be aware of and anticipate changes within the hospitality FF&E supply chain. We also understand that issues can arise within production, so we plan for as much as possible upfront with our manufacturers and clients. When problems arise, we pride ourselves on providing viable options and swift resolution.
If you’d like to experience a seamless, stress-free now hotel or renovation project, connect with us!