How effective procurement can boost the UK’s hospitality sector

The UK hospitality sector is facing a challenging time. With the economy struggling, demand from both consumers and businesses is faltering, right when organisations are facing increased costs because of staff shortages and higher employer National Insurance contributions.

 

These aren’t the only issues the sector faces, either. Hotels, conference centres and restaurants are under pressure to do more to improve their environmental performance and report back on progress.

 

The Employment Rights Bill, which gives employees the right to statutory sick pay, parent and bereavement leave and protection against unfair dismissal from day one of employment, will also have an impact on a sector that has traditionally seen high levels of staff turnover.

 

It’s not just staff costs that have been rising. The inflationary pressures seen over the past couple of years mean essential products such as food, electricity and heating have all increased in price. Day-to-day items such as televisions, furniture, cutlery and crockery, stationery, cleaning products and bathroom consumables have also spiralled, and these can add up to significant amounts for hospitality businesses.

 

For those working in procurement teams, this represents a significant challenge. While some price increases may be inevitable, many items have traditionally been bought in an ad hoc way, with individual establishments responsible for their own buying.

 

Not only does this mean that larger organisations are unable to realise the economies of scale that would come from their combined buying power, but it also means those in procurement teams often have little idea of what they are spending in the first place. This makes it impossible to identify areas where costs could be cut or risks associated with the supply chain reduced.

 

The demands of the current climate, though, mean more hospitality organisations are looking to get this under control. Best Western Hotels & Resorts (BWH) created SI Supply as a dedicated purchasing centre for its Italy and Malta operations back in 2004. Today, it serves as a one-stop-shop for more than 100 hotels, resorts, bars and restaurants across Italy, with over 650 hospitality sector clients, including 170 BWH-branded businesses.

 

In a bid to standardise procurement processes and generate greater efficiency, BWH decided to partner with Amazon Business in 2024. Each member now has access to €1,500 of credit a month, helping to ensure liquidity, and which it can spend across a wide range of items on Amazon.

 

As well as essential items such as IT, furniture and stationery, this includes a dedicated hospitality and catering business supplies catalogue, featuring competitive pricing and discounts. The whole network benefits from better pricing as a result of its combined buying power, while members can also mandate the use of particular suppliers, such as those with recognised environmental certifications or responsible purchasing commitments.

 

As well as better pricing, those in procurement teams also get detailed information on just what they have been spending, which can help them to track spend and identify future needs, as well as the potential for further efficiencies. The intention now is for the partnership to expand across Europe, opening the door to more hotels benefiting. 

 

Generating stronger data to help make better decisions is a priority for many procurement teams. According to Amazon Business’s 2025 State of Procurement Report, 73 per cent of senior procurement leaders want this to be an area of focus over the next two years.

 

Artificial intelligence is set to play an increasingly prominent role in this. Already, 41 per cent of procurement professionals use AI-driven optimisation of purchasing decisions and 38 per cent plan to invest in AI demand forecasting, AI-driven spend analysis and AI automated procurement processes over the next two to three years.

 

For businesses in the hospitality sector, having access to such information means they will be able to tackle some of the spend categories which have traditionally not been managed, or only at a local level. This offers the potential to deliver cost savings, reduce risk and identify opportunities for more strategic decisions in the future.

 

Being able to demonstrate improvements in responsible purchasing is also a growing requirement. Four in five (80 per cent) decision-makers say their organisation has mandates or goals to work with certified suppliers, and 63 per cent say this has increased in the last year.

 

Having access to data showing what proportion of spend has gone to suppliers that meet wider organisational goals can help position a business as a responsible organisation, which consumers and businesses alike will want to use. In today’s competitive landscape, that could be vital when it comes to ensuring hotels, restaurants and conference venues are able to thrive.

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To find out more about how Amazon Business could help your hospitality organisation get more control over spend, visit business.amazon.co.uk