With the right approach, restaurants and hotels can be cornucopias of opportunity
By Misty Byers
Distributors in search of a piece of a rapidly-growing and profitable pie could do a lot worse than the hospitality market.
According to the National Restaurant Association, restaurants will reap nearly $342 billion in commercial sales this yearan increase of more than $37 billion since 1990. Add to this the $93.1 billion generated by the lodging industry, as reported by the American Hotel & Motel Association, and the opportunities for distributors of printed products seem virtually limitless.
But it's not always the gravy train some may expect. Industry professionals concede that approaching large corporations can often result in more headaches than headway. In addition, consolidations and technological advances are changing industry demands. It takes a discerning distributor to find a haven in hospitality.
"It's a tough market, but it's sellable if you approach it right," said David Dudding, vice president of Graham Data Supplies, Amarillo, Texas. He noted how corporate contract buying can leave distributors out in the cold when it comes to forms.
"While most hotels are independently-owned, they'll often brand themselves under a chain namesuch as a Holiday Inn or Radisson," noted Dudding. "Most of those don't have personalized invoicingthey can call an 800 number and get forms. The hotel's name is simply printed with a laser printer. We're not competitive in this case because they are buying from somebody that supplies 50 restaurants or 50 hotels, as opposed to just one."
He added that chain restaurants can sometimes be sold consumables such as roll productsif they're blank. "If they have an advertisement for the chain on the back, it's hard to compete. And giveaways such as mints are more than likely going to be ordered with food service products."
Rather, Graham has found success in selling specialty-type productsletterhead, envelopes and promotional products generated for a specific location.
"For example, last year we sold engraved champagne bottles to hotels in the area, which they included with in-room packages for New Year's Eve," noted Dudding. "Specialty items are definitely something a distributor can get involved in."
"A distributor needs to be very open-minded and objective when defining his marketplace," said Pete Mattson, CEO of the MHC Companies, a Burnsville, Minn., distributorship. "Evaluate your prospects. Don't think that you can sell to everybody."
He recommended steering clear of travel agenciesbecause consolidations and reductions in commissions paid by airlines are putting into question the economic viability of small travel agencies. "Because their margins are so small, a lot of their purchasing is really price-driven. They need to be very shrewd with their expenditures." However, Mattson sees opportunity in locally-owned, full-service hotels and restaurants.
"Small hotels can be good customersif they're full service," noted Mattson. "If they are promoting a bar, pool, small meeting places, suites, business travelthat is something where they've added value that we can promote."
"Corporately-owned establishments will most likely be a difficult sale," Dudding added. "But if it's a locally-owned establishment, or even a locally-owned and operated hotel chain, you can do much better. An office that has three or four establishments in town uses payroll and accounts payable checks just like everyone else."
Convention-oriented establishments can also prove lucrative, said Mattson."They're going to be good customers because they will constantly have people coming in and hosting conventions that will inevitably have some sort of printer-supply needs."
- People:
- David Dudding
- Pete Mattson