Buy smart: How hospitality procurement is innovating to optimize costs

At a time when hospitality companies continue to struggle with staffing, resources, inflation, and cost pressures—or the never-ending quest to do more with the same resources—a new approach to procurement, specifically targeting cost, technology, and innovation may be just the ticket.

Centralized online procurement solutions are driving system-wide cost savings for smart hoteliers nationwide, by making purchasing easier and more cost-effective for employees, while delivering better cost management for organizations. Companies of all sizes are applying technology, analytics, and generative artificial intelligence (AI) to identify ways to streamline purchasing and drive cost-efficiencies, from the property level to corporate headquarters.

Online centralized procurement solutions enhance the buying process by providing procurement managers with the analytics tools needed to understand what, when, and how employees are buying, at a glance. These solutions also help identify ways to streamline and make the procurement process more cost effective, using advanced tools such as automtbation and AI.

A global supply chain report by PwC “shows that executives are reinventing supply chains from end to end to withstand geopolitical crises, climate change, technological advances and other disruptive threats.” Businesses investing in digital transformation are reporting efficiency gains of 30%, which would be a significant return in the highly competitive travel and hospitality space.

Consolidating fragmented systems can help hospitality procurement professionals enhance visibility into their properties’ spend, leverage buying power, improve compliance, and increase efficiency, according to the Hospitality Financial and Technology Professionals.

Among decision makers polled in Amazon Business’s 2025 State of Procurement study, 65% are now employing analytics or tools to understand performance, trends, data, and insights, up 3% from 2024. It is not unforeseeable that in the future, that utilization rate will increase even more, thanks in part to the mass adoption of centralized procurement.

Use of AI represents yet a step further down that road, offering even greater tools than traditional business intelligence can afford. Among investments planned over the next two or three years by those polled for the study, 38% will invest in AI-automated procurement processes and AI-driven demand forecasting and spend analysis, while 37% expect to improve AI-supplier risk management technologies.

Actively applying AI models to purchasing, hospitality professionals can track price fluctuations in supplies to stock up before prices increase. They are also using AI to analyze guest preferences and variances by season or group segment.

“Guest perception of the condition of guest room fixtures, furnishings and décor, bathroom fixtures and the comfort of the bed each ‘significantly’ improved year over year,” research firm J.D. Power found in their 2025 North American Hotel Guest Satisfaction Industry Study, suggesting hotelier capital investment is paying a satisfaction dividend. The finding also points to the critical role that procurement plays in guest satisfaction.

Discovering savings

Maximizing cost savings is crucial at every opportunity, and centralizing procurement has become a key strategy to achieving this. In addition to the perpetual mandate to cut costs industry-wide, these measures are critical now to counter current trends like inflation and rising prices, while consumers proactively identify ways to stretch their travel dollars.

By using centralized online procurement to buy in larger quantities, as well as finding new suppliers, organizations can realize greater savings. To navigate global supplier networks and safeguard against anticipated challenges, those surveyed by Amazon Business for its procurement study are looking to build stronger relationships with key suppliers, while also developing a broader supplier base. Access to a centralized procurement solution is essential to meet these goals.

Preferred provider networking

Being part of a vast network need not be overwhelming, especially when the time comes to click “buy.” Amazon Business, for example, allows procurement administrators to create buying policies that steer buyers to products and suppliers preferred by the organization.

Taking an analytical look at your organization’s supply chain is perhaps more crucial than ever in the current economic climate, enabling more nimble shifts as conditions demand it. Hospitality organizations can gain insight into their purchasing with Amazon Business Analytics and its customizable dashboards and exportable reports.

According to the 2025 Amazon Business procurement study, building resilient and agile supply chains is a top priority for 64% of decision-makers and 69% of senior leaders.

Much of that momentum comes down to simple geography: Currently, 26% of decision-makers report having some suppliers located outside of their country’s borders, says the study, which may prove too risk-intensive to serve as a long-term solution. Moving supply chains nearer to operating facilities is a very important priority over the next year or two for 61% of decision-makers and 65% of senior leaders polled in the Amazon Business procurement study.

Focusing on what matters

As exciting as it is to redefine back-of-house procurement for its inherent cost savings and efficiencies, all would be for naught if it didn’t boost the main objective: Providing an excellent guest experience. Many hospitality companies are still struggling to have the resources needed to meet current levels of demand, so any strategies that make purchasing easier and faster allow employees to better service guests. With the considerable time savings afforded by utilizing centralized procurement, hoteliers can better empower their employees to make a real difference on the ground.

Originally published in Business Travel News