It goes without saying that the pandemic is affecting all economic markets in some manner. One of the sectors feeling the effect currently is the hotel technology supply chain. Technology products and appliances are starting to see rising costs across the board. This is due to several factors impacting the supply chain. The hospitality products are also taking longer to get to consumers, so it is important to be aware of the situation and how to navigate it. Bob Tonda, President of TWS Transworld, provides his insights regarding the issues of the hotel technology supply chain. He also offers solutions for potential hospitality clients looking to mitigate the effects of the current situation.

1) Here are the primary causes for supply chain issues

1) Increased Expenses / Costs Through the Whole Supply Chain

2) Complexity of the Supply Chain Due to Multiple Channels in Order to Get to Market

3) Evolving Consumer Demands Fuel Need for More Speed, Efficiency, Quality and Service

4) Internal Risks in the Supply Chain Create Economic Pressure

5) Supply Chain Volatility Due to External Factors

Out of the issues above, which are affecting the hotel technology supply chain (i.e. hospitality TVs, PTACs / ACs, appliances, etc)?

There are many small things that affecting the supply chain. These include lack of labor, shortage of some raw materials, shortage of part and components, as well as many others. But to use one small illustration of a breakdown in the supply chain, we can highlight one situation specifically. An outbreak of Covid-19 has partly closed one of the world’s busiest ports, a shutdown that may add to the already record cost of shipping goods out of China.

Yantian Port in the export and industrial hub of Shenzhen in southern China did not accept any containers for export until Sunday, May 30th. The container yard of the port was shut since last week after an outbreak of Covid-19 among port staff and in the broader community, state media reported.

The disruptions will continue into the coming weeks. Shipping firm AP Moller-Maersk A/S reporting delays in its schedules due to the closure. Any delays will likely put further pressure on the already sky-high costs of shipping goods from China. These prices already soared on record export demand, a shortage of containers, and other factors.

Those shipping costs are just one of the factors boosting the price of China’s exports, which is threatening to fuel global inflation.

2) Are there any particular hotel technology products that are more affected by supply chain issues than others at this time?

;That will depend on the manufacturer and how and where the manufacturer their goods. In our global economy you may have parts and components for the Hotel & Hospitality TV manufacturers in Korea and Japan with Mexico as the final assembly point. Moving these parts, components and finished goods around the world has become more expensive. The worldwide demand for goods has also created a shortage to chips that are used in virtually all the products we purchase (i.e., refrigerators, dishwashers, TVs, etc.).

3) Have you experienced this sort of issue before? If so, what are some lessons from that time that can serve as a guide for this current situation?  

During the 2006 - 2008 financial crisis caused some manufacturers to lower their manufacturing forecasts in lieu of lower demand. Unfortunately that continued long after the demand had increased and companies were still concerned the economy would continue to be stalled.

4) How are the hotel technology experts at TWS currently navigating the supply chain challenges?

Transworld is forecasting products earlier to ensure that customers have an “on-time” delivery of their goods. This is key to any new hotel construction or renovation project. We are also stocking more product and managing it through various distribution channels and our now warehouses.

5) Are there any words of advice you can give to potential clients looking to buy in this current market? 

Plan ahead. Getting the forecast and purchase orders into the manufacturers hands is critical to the on time delivery. Most of the goods that Transworld sells are used in commercial hotel applications and are made to order. In other words, they are NOT readily available in the market waiting for a customer to come around. Manufactures build based on the orders generated through Transworld to build their products.

6) What is your outlook for the hotel technology supply chain through the rest of the calendar year and looking into 2022?

Chances are we will continue delays in the supply chain through the end of 2021 and the beginning of 2022. The most pain will be felt by those buyers who did not plan far enough ahead. They ordered their product too late in the contraction or renovation process. In our estimation, things will be relatively back to normal in mid-2022.

7) Are there any other comments or insights you would like to add? 

The entire world economy has been deeply affected by covid-19 and virtually every industry along with it. Things are NOT back to normal but with proper planning and foresight problems and delays can be avoided.

FYI: Transworld now distributes hospitality tech products to Latin America and the Caribbean, find out more in the linked post. For any questions regarding TWS Transworld hotel technology products, contact the experts directly.