In another favourable sentiment, just over half (56.3%) said no redundancies were made in 2015 — one of the reasons included a recruitment freeze (12.5%). However, nearly 70% said they planned to recruit in this year — which is a great sign for the supplier market.

But while suppliers are hoping for a profitable 2016, the three biggest challenges facing suppliers in the current market situation include increased competition (37.5%), market saturation (31.3%), and slowdown of hotel construction (25%).

This year, slowdown of hotel construction makes it to the top three concerns for the first time.

2016 AND BEYOND

We asked respondents to tell us what changes they expected to see in the hotel procurement industry in 2016 and beyond. A few said nothing would change, while others said that with the softening on the market, there would be an “increased scrutiny and pressure on pricing, regardless of quality of product”, with “focus on cost than quality over the next couple of years”.

Speaking to Hotelier Middle East, tableware supplier Steelite VP Stuart Wilkinson disagreed and said: “A quality product will always be able to obtain a good enough price. People do look at pricing, but as long as the quality of the product is good, they will pay the extra that they need to pay.”

Intermetal marketing manager Cathy Di Savino said that while she has felt rumblings across the industry about a focus on cost, suppliers should still pay attention to quality.

She said to Hotelier Middle East: “However, at the end of the day, quality comes into it. Maybe the supplier has to play with the prices, but not go down on the quality. We all have to support each other, because the market is uncertain right now. We want business, they [clients] need to refurbish, for example. So we might have to drop [prices], but they might have to compromise too. Not necessarily buyer cheaper quality though. But they are looking at reduced prices perhaps, not cheaper quality.

“People who buy quality don’t want cheap — they want a lower price, not a cheaper quality product.”

Supplier integration and consolidation is also a trend, said the suppliers. One participant said in the survey: “The trend will be to keep the supply base small and maximise the costs with a select few suppliers with tighter pricing and better payment terms.”

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