Suppliers and buyers call for more transparency

At Hotec Middle East, which took place at Le Méridien Dubai, Dubai on April 25-28, purchasing managers and suppliers agreed that relationship building will be key to improving purchasing processes as more hotels come online in the lead up to Expo 2020.

Sales manager at Intercoil, Sony Peter commented: “It’s about being open and transparent and being professional. It’s not just about getting some suppliers on board at the time of a project and later on not even telling you on what basis their decision was made. Why do such allegations [of bribery] get made? It’s because there is no transparency.”

Peter went on to say that processes could be improved if purchasing departments made suppliers aware of the steps being followed and the criterion on which decisions are based. He added: “We do that as a company – we tell our suppliers three companies will be shortlisted and these are the criterion we’re going to adopt and we finalise this by sending a letter saying ‘this is the criterion which you are unable to meet so we chose someone else’ so that part of it is very critical I think.”

On the flip side, Shaji Joseph, purchasing manager at Fairmont the Palm said he thinks suppliers need to be more upfront when it comes to signing contracts, especially when it comes to warranties, which often fall short of the purchasing company’s expectations. “When we purchase an item and they say that a two or three year warranty is provided and then we approach them and they come back and say ‘this particular part isn’t covered’ – you see nobody goes into these details. When we say warranty, we mean a warranty for the whole item.”

Additionally, Joseph highlighted that knowing who a supplier really is has become a real problem in the Middle East, with companies reselling goods, coming on to the market. “We don’t know who is a genuine supplier or who is buying from suppliers and distributors and then giving supplies to us – so basically they don’t do anything. There is so much competition going on so we need to find out if we’re dealing with the right supplier for the right product – this is a really big problem now.

This issue was highlighted as a particular problem facing buyers outside of the UAE, particularly in Qatar, Bahrain and Saudi Arabia. Abdul Karim Al Atiq, general manager of Coral International Al Khobar, Saudi Arabia said that in the KSA market it is not entirely clear who the real suppliers are. “They usually come through a middle company,” he said. “There are visa issues in Saudi Arabia so suppliers can’t always come over easily and they have to have agencies representing them.”

Moh’d Abdulla Al Awadhi, purchasing manager at The Gulf Hotel Bahrain added that a real issue facing the Kingdom is that the market is very much “a monopoly”. Al Awadhi commented: “It’s very hard to find items; it’s not like Dubai at all. There’s a lot of monopoly in Bahrain so there is one company that everyone buys from. To improve this we need to let the people invest.”

Al Awadh added the number one priority of buyers and suppliers in the lead up to 2020 and beyond should be “building trust”. He said: “As a buyer, I’m not worried about price, I’m worried about the relationship – the trust. You make a deal with a relationship and if you want to make a good deal you should give the supplier a chance to make a profit so that you get that quality. If you squeeze them it’s no use; you should be fair to them because you’re building a relationship.”

Hotec Middle East was attended by hotel purchasing, operations and technical directors, and interior and architectural designers from the Middle East region, who met with domestic and international suppliers to participate in a series of one-on-one meetings over two dedicated business days.