Marriott, Hyatt Joining Forces on Internet for Hotel Supplies Venture Puts Area Firms in a Strategic Bind
Comerford, Mike, Daily Herald (Arlington Heights, IL)
The teaming up of rivals Marriott International Inc. and Chicago-based Hyatt Corp. to form an online exchange for hotel supplies has local hotel firms considering a change in plans.
"I'm about as happy as if a hotel moved in next to mine," said Stan Suboleski, vice president of product development for Allied Hospitality Group, a hotel supplier and chain of 23 hotels based in Des Plaines. "Because on the Internet, everyone (in the industry) is our neighbor."
Bethesda, Md.-based Marriott and Pritzker family-owned Hyatt said Tuesday they are embarking on the new business, expected to be located in the Washington, D.C., area. Already accounting for about 10 percent of the $50 billion in annual U.S. hotel supply purchases, the chains aim to cut costs and make products and services easier to buy and sell. Other hospitality companies will be encouraged to join their venture for economies of scale.
Eventually, the site would separate from the hotel chains and branch out into hospital and restaurant supplies.
Locally, the most directly affected by the supplier end-run is Vernon Hills-based American Hotel Register Co., the country's largest single hotel supplier. Having recently completed its move to Vernon Hills, it employs more than 750 workers in its headquarters and distribution center.
Yet American Hotel President James Leahy is welcoming the new system of buying supplies. The site, he maintains, will be limited to order entry transactions and American Hotel is the most likely to benefit from providing the rest of the package, including freightline negotiations and inventory controls.
"We see this as a wonderful opportunity," Leahy said on Tuesday. "They'll take the orders and they'll come to us for fulfillment. We are already Marriott's largest single supplier."
Leahy even said the site is part of a larger, necessary trend toward fewer suppliers and less cost associated with paperwork. Hotels can be swamped by thousands of suppliers of everything from linens to chocolates on the pillows.
"What we all are trying to do is end redundancy," Leahy said. …