Avendra Canada is certainly no stranger to the hotel community, and vice versa. “The hotel industry is 95 per cent of what we do,” says Herman Schumacher, VP, Strategic Accounts and Field Support at Avendra, whose Canadian operation is the recipient of this year’s Pinnacle Award for Supplier of the Year.
The Rockville, Md.-based company was formed in 2001 through the cooperative efforts of four organizations — Canadian-born Fairmont, Marriott, Hyatt and ClubCorp — who banded together to create a new kind of procurement model. “Despite the fact they were competing with each other, they also understood they were buying products they didn’t compete on, such as light bulbs,” Schumacher says. “So they asked: how could they leverage that buying power for the greater good?”
The collective goal to ensure a strategic lens, which could meet hotel budgets and guest satisfaction requirements, was applied to any procurement decisions. Today, Avendra in North America leverages more than $4 billion of annual purchases while at the same time offering expert advisory services and in-depth purchasing data and analysis. The supply chain it has built is vast and complex, bringing in products from all corners of the globe to service more than 7,000 member properties throughout the U.S., Canada and Mexico — 200 of which are located in Canada. With 290 associates throughout North America, including four in Canada, Avendra runs a very lean operation, says Afsar Ali Khan, director, Field Support and Customer Relations for Avendra in Canada. “But that doesn’t mean we can’t manage a complex business model.”
Khan has been the voice and face of Avendra in Canada for the past 15 years and says the company’s growth in this country has been significant — last year saw a 20-per-cent gain over the previous year. This year, growth is tracking in the eight-per-cent range. Membership with Avendra is free, but requires a minimum purchasing commitment per year. “That allows us to go back to the supply community for the best pricing,” Khan explains, adding the company works with both individual properties as well as hotel management companies to manage total portfolios. Customers can select from any or all of Avendra’s programs, which include food-and-beverage, rooms, engineering, administrative, golf and spa.
Carmen Villarin, vice-president, Finance for CK Atlantis, which operates two of its three properties in Canada, says despite the fact her operations are comparatively small, Avendra has allowed her to leverage the buying power of larger companies to compete. “The moment we signed up, our costs went down by about 15 per cent. Now we purchase 80 per cent of products through their suppliers. With all the industry consolidation going on, it’s important that independents like us can survive and compete.”
A more important factor for Villarin, however, is integrity. “Almost every year I get a cheque back if a supplier has charged more than they should. It’s great to have the security that someone is watching out for us.”
The support goes beyond the properties to the suppliers themselves. Avendra has an expansive list of 800 contracts across North America, 170 of which are extendable to Canada. Out of that 170, 90 per cent of Avendra’s spend is with Canadian suppliers, Khan reports. “People want to do business with others in their neighbourhood, so we try to do as much as we can with in-country suppliers.”
Avendra’s inventory list covers almost all sundries a hotel needs — with the exception of the bricks and mortar, IT and alcoholic beverages. Products range from food, china, tableware and uniforms to engineering supplies, service contracts, landscaping, laundry and housekeeping.
The company has built-in flexibility in terms of catering to brands and programs, Khan adds. “We can supply any brand, whatever the tier. Flexibility is important, as all brands want to be something different.”
The real secret to Avendra’s success is the strong relationships it has built with multiple stakeholders within the hotel community, he believes. “We work with many of the functional leaders who oversee different aspects of operations, as well as supplier partners, to set goals and make sure whatever we do aligns with their brand and the marketplace.”
Avendra also prides itself on keeping its end-users up-to-date on new trends and supplier changes, Khan says. “Everyone at a hotel has multiple tasks, so we strive to align with our end-users at a local level and be a trusted advisor in the field. Sometimes we form development teams from different operations to look at suppliers and how they process their products. If a property has a 100-km radius policy, we give our partners a list of what they can source in their area.”
Tony Tamburro, GM, JW Marriott, The Rosseau Muskoka Resort & Spa, has been working with Avendra for the nine years since the resort opened. “When a resort brings on a partner or vendor, that partnership needs to work for both sides. Avendra has the same philosophy we do — we are all about our customers.”
There’s also the bottom line to consider, he adds. “Avendra is literally a one-stop shop that allows us to leverage its purchasing power and pass the savings on to the property. On average I’d say those savings range between seven and 13 per cent. Also, the vendors are pre-screened, so all the liabilities have been taken care of. We don’t need to waste unnecessary time because they do all the checks and balances.”
Avendra’s Canadian operations may be lean, but whenever there is an issue, there is always someone on the ground to help through the centralized customer-support team that covers all time zones, says Khan. “Our customer-care contact, Nora Cornish, is remarkable in understanding customer needs and helping to resolve any potential issues.”
One testament to the company’s success with the Canadian hospitality community is its annual supplier show, which alternates between Toronto and Montreal. According to Khan, the sixth show in Toronto had 134 suppliers and drew 1,000 customers. The first year they had 50 vendors. “We hold this show for decision-makers, whether it’s general managers, purchasing managers, engineers, or executive chefs. Nobody else does that with their suppliers.”
Charity and community support are also an integral part of Avendra’s commitment to local markets and the company runs defined programs and policies and associate-driven causes ranging from medical foundations to disaster-recovery efforts. On Charity Denim days, for example, Avendra associates donate $5 to support a sponsored cause — raising more than $20,000 (in $5 increments/4,000 donations) and supporting 27 charitable organizations in 2015 alone.
Additionally, Avendra encourages each of its departments to spend a half-day doing community service together each year. Associates donate their time cleaning parks, packing lunches for children in need, working in the local food bank or assisting any number of local charities. More than 600 hours of community service were provided by Avendra associates in 2015 alone.
Throughout the year, Avendra associates donate food, school supplies, toys and clothes to local charity groups. The company’s newest initiative is an annual scholarship program through the Canadian Hospitality Foundation (CHF) worth $1,200.
The company is also doing its part to promote sustainability along the supply chain, forming partnerships with customers and suppliers to create opportunities for collaborative, sustainable decision making.
In the meantime, the Canadian operation continues to grow its customer base. “We’re continuing to see new customers interested in joining the program,” Schumacher says. “The ball keeps rolling — and it is getting bigger as we speak.”
Volume 28, Number 8
Written by Denise Deveau