As a new year is underway, perhaps the number one question facing our industry is how inflation will impact hospitality-driven businesses in 2023. Record-breaking increases to the U.S. Consumer Price Index in 2022, coupled with the doubling of labor wages, has intensified margin pressures for restaurants, hotels and other hospitality-driven entities across the nation and around the world. And while products and labor were in shorter supply, consumer demand continued to skyrocket for much of the year—especially around food and beverage services, which saw a 50% uptick in demand in under two years, according to the U.S. Census Bureau. Fortunately, HSM customers continued to feel the financial benefits of partnership with the world’s leading hospitality procurement and end-to-end supply chain provider, as our category management experts successfully negotiated volume-driven pricing and held inflationary increases for customers to half the standard market rate.

“Every hotel owner, regardless of location, has been impacted by cost and supply issues originating beyond their property-level logistics, and our job is to make sure we’re connecting dots for our customers—regardless of where they are, what the product or service is, and what challenges they’re seeing in supply chain,” said Anu Saxena, HSM President and Global Head. “Our experts remain laser focused on leveraging HSM’s global scale to substantially reduce risk for our customers. That’s the value we bring as a global supply chain powerhouse.”

Another advantage HSM brings to participating properties is the benefit of timely, often tailored communications that better position our customers to make data-driven decisions around purchasing, product selection, potential F&B alternatives and appropriate order lead times. Through our partnership with Mintec Analytics, we present customers with a price trend report offering insights into HSM’s costs compared to market rates for top F&B categories. Customers also receive bi-weekly commodities updates and a monthly market inflation report highlighting shifting commodity pricing and macroeconomic trends.

December’s report, for example, reflects the U.S. manufacturing sector’s first period of contraction since May 2020 and alerts customers to significant price drops for commodities such as chicken, pork belly, coffee and goose down. Orange juice and eggs, meanwhile, continue to steadily climb in price due to weather- and avian influenza-related shortages, signaling to customers the potential need to divert spend or source in-stock, more cost-effective alternatives. Improving supply chain conditions are also a key theme that was highlighted in December as shipping congestion and freight costs improve. Our hotel partners can also count on trusted advice from industry experts to aid in their decision making. HSM’s dedicated Strategic Accounts team provides customers with one-on-one guidance, individualized solutions and customized weekly reporting to better mitigate the effects of inflation while navigating the purchasing and planning process.

“At the end of the day, we are problem solvers,” said Saxena. “We’re here to help our customers operate more efficiently and get the most value for their dollar, so they can focus on running their hotel while we manage everything pertaining to their supply chain procurement. HSM has the global expertise our customers need to run their hotels successfully.”

In every climate, HSM is putting our size, scale and $11B in purchasing power to work getting our customers exactly what they need, right when they need it. To leverage the benefits of our ongoing risk mitigation during upticks and downturns, connect with your Strategic Accounts advisor or reach out to us at HSMx@hilton.com.