FF&E. There’s a constant reference to the three-letter acronym in the world of boutique hospitality design and development. It stands for “Furniture, Fixtures and Equipment,” and, unlike it’s ease in saying, is often a pain point on the balance sheet for owners and investors, alike.
Within FF&E there are myriad design elements—finishes, furniture, art, design accessories and more—each a crucial piece contributing to the overall aesthetic of a property. Hospitality and hotel owners find themselves grappling with the delicate balance between maintaining brand integrity and managing expenses. While cutting corners on FF&E risks tarnishing the property’s standing, or even its attendant brand, overspending can strain budgets and divert funds from other essential aspects of development.
Sourcing and procurement in property development extend far beyond merely selecting beautiful furnishings. It involves navigating the intricate nexus of aesthetic appeal, cost-effectiveness and logistical challenges, such as expedited timelines. Typically, hospitality projects engage interior design firms to conceptualize and outline the project’s vision. These firms craft the blueprint for the property’s ambiance and decor, setting the stage for a memorable guest experience. However, the execution of this vision falls into the hands of sourcing and procurement specialists, who meticulously review furnishing selections and manage the logistics associated with each purchase.
Unlike residential projects that may involve a handful of furnishings, hospitality endeavors often entail procuring hundreds of individual design pieces. Each selection carries significant weight and a misstep can have profound implications for the project’s budget and timeline. For instance, a single imprudent design decision in a grand lobby can triple the allotted budget, cause delays that push back timelines and compromises guest satisfaction. Despite the grand visions envisioned by interior design houses, they may lack the expertise in purchasing and supply management required to justify value and ensure seamless execution.
Compounding these challenges is the limited pool of wholesale furniture players in the market. While retailers and wholesalers may offer discounts for commercial projects, the markups can be exorbitant. Consequently, a seemingly simple item, such as a lobby sofa, can unexpectedly inflate the project’s budget, leaving stakeholders grappling with financial constraints.
In navigating these complexities, the solution lies in a collaborative approach between interior designers and procurement specialists. Though designers shape the creative vision, procurement experts streamline the execution process, ensuring that each element is sourced efficiently and within budget constraints. This strategic partnership allows boutique hospitality groups to strike the delicate balance between aesthetic excellence and fiscal responsibility, ultimately delivering exceptional guest experiences while maximizing returns on investment.
Want to get it right from the jump? Here are five procurement strategies to follow:
- Negotiate on selections: Great procurement firms meticulously review proposed furnishing selections from interior design firms, leveraging their expertise to explore opportunities for negotiations, secure better trade pricing or identify alternative sources that enhance the FF&E bottom line.
- Value engineering: Procurement firms excel in replicating furnishings at a fraction of retail costs through quality manufacturers. Their commitment to this process ensures clients receive the same level of quality and design integrity without compromise, underscoring their dedication to value engineering.
- Specialty sourcing: Seek out procurement firms that also offer specialty sourcing; though few and far between, these firms offer unparalleled access to unique sellers, including distinctive art, accents, antiques or artisan-made goods. This distinctive capability empowers boutique properties to differentiate themselves.
- Logistics management: Procurement firms go beyond mere inventory tracking, providing comprehensive logistics and management services. They offer expert advice on quality control inspections and white-glove delivery services, ensuring a seamless installation process, especially for delicate or high-value items.
- Lifecycle management: Procurement firms demonstrate a proactive approach to lifecycle management. They meticulously reconcile numerous transactions on behalf of their clients, shaping strategies for future FF&E investments and providing invaluable financial clarity and foresight.
Jessica Engholm is the founder of Cultheir, a sourcing and procurement company that works with boutique hospitality brands, as well as brands, including Viceroy and the Four Seasons Hotels and Resorts. Cultheir has a showroom based in Nashville and can be found on Instagram. For more information: projects@cultheir.com.