Selling To Hotel Chains - How To

Lara Morgan was able to build a multi-million pound business selling sewing kits to hotel chains and, as this article explains, there are still opportunities for other small suppliers.

Hotels need a wide range of products and services to ensure that their guests are well catered for and to encourage them to return. They buy beds and blankets, towels and toiletries, breakfasts and bar supplies, mops and vacuum cleaners, and everything else that's required to keep a hotel running smoothly.

The biggest hotel chains in the UK in terms of number of properties are Premier Inn (over 650 properties), Travelodge (over 500 properties) and Best Western (over 280 properties). Other leading chains with multiple properties in the UK include Holiday Inn, Marriott and Hilton. Several leading chains operate multiple brands, for example Hilton operates Doubletree, Garden Inn and Waldorf Astoria, among others. Each chain and brand has its own identity, and as such has different supply requirements.

What do hotel chains buy?

Anyone who has stayed in a hotel will have a fair idea of the wide range of products and services hotels use. Their requirements can broadly be categorised into six categories: housekeeping; catering; administration; maintenance; furnishing; and facilities. The last category includes leisure and conference facilities, and incorporates things like gym equipment, spa services and audio visual equipment. So hotel chains need suppliers for everything from cleaning products to food and beverages, office supplies to elevator maintenance, and fire and safety equipment to Wi-Fi networking.

One specific product range that hotel chains buy in large numbers is toiletries and items such as shower caps and shoeshine kits, known within the industry as guest amenities. A major manufacturer of luxury toiletries and amenities is Pacific Direct Ltd, which was founded by Lara Morgan in 1991. Pacific Direct was Lara's first business, and she initially had no specific experience of the hotel industry. Nevertheless, it became extremely successful, and Lara sold her majority share for £20 million in 2008.

Lara's book, More Balls than Most, tells the story of how her small business grew to be a large and powerful company in the hotel industry. Lara grew up in Asia, where she had a contact who manufactured sewing kits and shower caps. She needed a job, and wondered whether she could make a living selling amenities to hotels. In this article, Lara explains how she approached selling her first product, a miniature sewing kit, to the Dorchester Hotel:

"I was extremely lucky," she says. "My grandmother said, 'Darling, the best hotels are The Dorchester and The Savoy.' So I called (with a lot of persistence) the purchasing manager of The Dorchester. Most importantly, I had a unique selling point, which was that I genuinely represented a Chinese manufacturing plant. The uniqueness of the proposition, which was a pre-threaded sewing kit, was important."

Lara thinks that the experience of that first sale was a great business lesson, which she applied to the development of her business. "The experience of selling to The Dorchester, who were absolutely charming, made me realise that I would rather sell to the higher end of the hotel chain than the lower end," she says.

At the higher end, hotel buyers are looking for quality branded amenities. Pacific Direct obtained licensing rights for well-known brands such as Asprey, Elemis and The White Company, and that, along with the company's service reputation, particularly appealed to buyers. "They like exclusivity and they like innovation and originality," says Lara. "A hotelier has guest experience at the heart of their thinking."

How do hotel chains buy?

Most hotels have purchasing or procurement departments or managers, especially the chains, but an effective first step for a business looking to sell to hotels may be to do as Lara did with The Dorchester and simply cold call the hotel. Some hotels purchase supplies on an individual basis, but many chains look to benefit from bulk purchasing power by procuring their supplies centrally. For example, Qhotels, which has 21 properties in the UK, in effect runs each of its hotels as an individual business, but also has a centralised procurement office.

Some chains use external procurement consultants or management companies to handle their procurement processes. For example, Travelodge use Procure4 (www.procure4.com) to manage their procurement across housekeeping, catering, maintenance, and furnishings. Procure4 works with a wide range of suppliers who are expected to provide cost-effective and best practice solutions for their hotel clients. Prospective suppliers can contact Procure4 via their website.

Interstate Europe (www.interstatehotels.co.uk) is a management company that operates more than 250 centralised procurement programmes for its members. Its UK portfolio includes Hilton, Holiday Inn and Best Western hotels. Beacon (www.beaconpurchasing.co.uk) is a procurement company that purchases supplies across the hospitality sector, including for chain and independent hotels. Approved suppliers are introduced to more than 2,500 potential customers. Suppliers can contact both Interstate and Beacon via their respective websites for further information about becoming approved suppliers. Other leading hotel procurement services include Route (www.routeorg.co.uk) and Pelican (www.pelicanbuying.co.uk).

Hotel and hospitality trade shows are a good way for suppliers to get new products and services in front of buyers from hotel chains. Annual examples include the Hospitality Show (www.hospitalityshow.co.uk), the Hotel & Catering show (www.hotel-expo.co.uk) and Hotelympia (www.hotelympia.com).

For anyone looking to supply the big international hotel chains directly, the deals will generally involve tender processes. This introduces various complications, such as corporate social responsibility policies, environmental policies and other requirements that potential suppliers must comply with. For example, Marriott International is actively 'greening' its supply chain, and requires suppliers to meet environmentally-friendly and sustainable requirements. However, Lara Morgan says that shouldn't necessarily be a barrier for smaller suppliers.

"I would say you've got to evolve and become a professional company," she says. "There are lots of templates and there's nothing stopping a small company tendering. Something else that's probably important to say is that you're probably not going to win your first tender, but if you don't try you never will. You probably evolve and improve your business through the tendering process, because you always learn and ask for feedback."

Lara says suppliers shouldn't be afraid of exporting to international hotels. "It is not rocket science and the deals are generally bigger. We were delivering to five continents, but that kind of complexity should not put companies off because actually the systems are out there and companies like mine have already paved the way for others. Our sales figures proved that we exported more than we sold in Great Britain. As we grew, we became a very international business."

Which organisations can provide help and support?

There are various industry bodies that can provide help and support with selling to hotel chains. The British Hospitality Association (BHA, www.bha.org.uk) represents the hospitality industry including hotels. As well as providing industry information and a database of member hotels, it maintains a preferred suppliers list that it recommends to its members.

There are also various regional associations, such as the North East Hotels Association (NEHA, www.nehotels.co.uk) and Manchester Hoteliers Association (www.manchester-hotels.org.uk), both of which represent hotel chains, and which maintain supplier directories that businesses can apply to be listed in.

Depending on the type of product or service your business supplies, specific trade bodies may be able to help. Examples include the UK Housekeepers Association (UKHA, www.ukha.co.uk) and the British Contract Furnishing Association (BCFA,www.thebcfa.com).

Lara Morgan's latest venture, Company Shortcuts (www.companyshortcuts.com), can also help. As well as providing business acceleration events and initiatives, Company Shortcuts offers free downloadable templates covering a variety of relevant areas, including tendering and growing a business internationally.

So if Lara had to give one top tip to start ups aiming to sell to hotels, what would it be? "Absolutely aim high to premium brand levels if the product is suitable," she says, "because you then have a brand that you can name drop that will help you get into lots of other prospects."

Finally, Lara answers a question that has puzzled travellers for decades - why don't hotel chains provide guests with toothpaste? "I do know the answer, it's because toothpaste is expensive!" she explains. "The other thing is some people like a particular type of toothpaste. We will not forget toothpaste and toothbrush, but we don't bother to carry shampoo and shower gel because we expect the hotel to have it."

Dos and don'ts when selling to hotels

Dos

• Do approach internal and outsourced hotel chain procurement managers

• Do get onto approved suppliers lists held by the BHA and other hotel associations

• Do ask relevant trade bodies for help and support on selling to hotel chains

• Do download business templates from the Company Shortcuts website

Don'ts

• Don't be afraid of the tendering process, which can yield big deals

• Don't miss the chance to meet buyers at hotel and hospitality trade shows

• Don't overlook corporate social responsibility policies and other supplier requirements

• Don't forget that there are thousands of independent hotels in the UK as well as the chains

Useful links

British Hospitality Association (BHA)
www.bha.org.uk

Hotel Business magazine
www.hotel-magazine.co.uk

Hotel Industry Magazine
www.hotel-industry.co.uk

Big Hospitality
www.bighospitality.co.uk/Sectors/Hotels

UK Housekeepers Association (UKHA)
www.ukha.co.uk

UK Trade & Investment (UKTI)
www.ukti.gov.uk/export.html

Company Shortcuts
www.companyshortcuts.com