Is Your Procurement Paying Back? Measuring Last Year's Purchases Before You Approve This Year's List

Most large hotels send a purchase request before the peak season. It looks like a shopping list. It is actually a decision. It tells us what the hotel believes it will need, and how much it is prepared to commit to get there.

So before that list is approved, I always ask one question: what did last year's purchases actually bring back? If that answer is unclear, the new budget is being approved on hope, and hope is an expensive procurement strategy.

Connect the list to last year's value

Start with last year's actual spend, grouped by category: linens, amenities, cleaning supplies, kitchen stock, and equipment. Then, for each category, record the value it returned. Value is more than the price on the invoice. In practice, it shows up in four places:

• Fewer stock-outs during peak periods, which means fewer lost sales and fewer guests turned away.

• Lower returns, breakages and waste.

• Real savings against last year's prices, or against competing quotes.

• Guest feedback that names the product, whether it is comfort, cleanliness or the quality of the food.

Once you have both figures, the test is straightforward:

Value per unit spent = value returned by the category ÷ amount spent on the category

Cost per occupied room is the total operating expense required to service a single sold room during a specific period. It is calculated by dividing total room operating costs by the number of occupied rooms.

Freedman, 2026. "Cost per occupied room: How to calculate and improve your hotel's CPOR." Mews, 22 January. https://www.mews.com/en/blog/cost-per-occupied-room)

A category returning more than one unit of value for every unit spent is working. A category returning less, or where the value cannot be shown at all, must be justified before the same budget is approved again. Then compare that result with this year's request. If the list has grown faster than the value it is expected to deliver, the increase needs a clear reason, not a general feeling that more is safer. 

Check the vendors against what they delivered

Vendors should be judged on what they delivered last year, not on how long they have been on the list. For each vendor, record:

• Delivery: were orders delivered on the promised date and in full?

• Quality: how many deliveries were returned, replaced or rejected?

• Price: how did their prices move over the year, and were they checked against other quotes?

• Responsiveness: how quickly did they act when something went wrong?

Also check how many vendors supply the same item. A backup supplier for key lines is sensible. Several vendors for one product, each used in small amounts, usually means buying was never planned and costs were never negotiated.

Is the hotel on track, and does it need a review?

A hotel is on track when every major category returns at least what it costs, its vendors deliver what they promise, and this year's list grows in step with the value it is expected to create. It is off track when the value cannot be shown, when the same items are reordered urgently, when vendors are added without a reason, or when the list grows faster than the business.

In those cases, a review should come before the new list is approved, not after the invoices arrive. The review needs to answer four questions: what did we spend, what did we get back, which vendors do we keep, renegotiate or replace, and what will we buy differently next season. Keep it to one page, and make sure the person responsible for procurement signs it.

A procurement list is only as good as the value behind it. Before you approve this year's request, make sure last year's purchases have already paid for themselves.