Page 94 - 2015 Hotel Cost Estimating Guide

TIME IS NOT ON OUR SIDE
by Alan Benjamin
President of Benjamin West
With all due respect to the Rolling Stones classic
1964 hit, “Time is on my side,” for those of us in the
hospitality FF&E world in 2015 and for the near future,
time is anything but on our side.
Two years ago, my Q1 2012 column was titled “The
Year of the Renovation” and I discussed how the
industry was moving past the “Great Recession”
of 2008 and how CapEx was picking up. Well, with
20/20 hindsight, that was not only an accurate forecast
but an understated one. If 2012 started us off in “1st
gear” back to where the industry was at its peak in
2006-2007, then barring any major black swan event,
the next 3 years, 2015-16-17, should create a new
record for FF&E spending, throughout all segments
of our industry. From catching up on deferred CapEx,
to scheduled 6/12/18 year cycle renovations, to new
construction and a plethora of new brand introductions,
the planets have aligned to create unprecedented
global FF&E demand.
Given the massive surge in demand for FF&E in our
industry, I want to focus on the aspect of time. As
always, in the world of design and construction, almost
any decision is examined in its relationship to schedule
and budget, the dual dictators of every project, time
and money. While budget is, and always will be, a
serious consideration (no one ever hires a purchasing
firm to pay more…), let’s examine what stakeholders
can do to maximize their FF&E investment goals in
regards to time in today’s environment.
With the frothy mix of events causing unprecedented
FF&E demand, the first issue is that almost all the
owners, brands, designers and purchasing agents
want to use the same general list of FF&E vendors.
While we are always evaluating new vendors, and
today purchase from over 2,000 different vendors,
there are industry leading vendors in each FF&E
commodity that are well established firms with good
reputations for delivering the attributes we all want:
exceedingly competitive prices, great quality, and
overall, historically good lead times. When hiring a
purchasing agent for your project, in addition to all the their firm’s 2006-2007 levels. But pick the ID firm that
critical budgeting, sourcing, expediting and accounting
functions, one of the most important factors an owner
can consider is how good are the vendor relationships
that a purchasing agent has and what kind of power can
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they bring to the table? When one thinks of purchasing
power, it is traditionally in regards to cost. And while
cost is key as we have outlined, today, getting your
order to the head of the line and then getting accurate
and up to the date production and shipping information
is critical.
The purchasing agent’s relationship with those vendors
has to be one of mutual respect and trust, and owners
must be open to the information their purchasing agent
is telling them. I recently had to explain to an owner who
hired us for two of the same select service brand hotels
in the same scheme, about 90 days apart, why we had
to change vendors for guestroom carpet, upholstery
and casegoods from the first to second project. The
vendors for all three performed fine in the first project,
but at the time we went to market for the second project,
just 90 days later, those vendors’ lead times had shifted
to the point that they were not going to be able to make
the required delivery date. One of the major benefits of
using a large, well-established purchasing firm is that
you get a team that is focused on handling your project
but is part of a much larger firm where all the project
teams are in constant communication with each other.
It is not just that “Vendor A” is now running late on
casegoods, no, our information is much more micro
and much more current than that; rather, it is what
specific factory from what specific vendor is running
what lead time.
Another major factor to consider in the FF&E design
and construction cycle is what has happened on the
project before the vendor receives an order; the time
between when the ID firm is hired and the POs are
placed. The purchasing agent is only as good as the
information above us in the process, so please, as we
have stressed many times, select a design firm that
not only has beautiful photos and can produce the
aesthetic your project demands, but the design firm
that can produce clear, accurate and biddable specs
on time and within the budget. With the expanding
market, many ID firms are looking hard for new staff,
and it is great to see many of them headed back to
has the mentoring and training process in place, as
well as the critical double check before the specs go
out the door.
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