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Radisson Hotel Group Ltd

Case Studies

RHG have circa 55 hotels in the UK and spends around £6m per annum on their food and beverages. The supply chain and pricing is managed for them by a large external Group Purchasing Organisation (GPO). Not unsurprisingly the GPO assured RHG that their pricing was competitive against market pricing they could obtain elsewhere.

October 27, 2022

Radisson Hotel Group (RHG) has operated in the hospitality sector for over 75 years and is in 120 countries with nine distinctive brands covering five continents. They are amongst the largest and most dynamic hotel groups in the industry delivering world-class hospitality and excellence. They practice strong beliefs and actions that respect the diversity of people, the community, ethics and the planet.

Background

RHG have circa 55 hotels in the UK and spends around £6m per annum on their food and beverages. The supply chain and pricing is managed for them by a large external Group Purchasing Organisation (GPO). Not unsurprisingly the GPO assured RHG that their pricing was competitive against market pricing they could obtain elsewhere. The RHG senior executive team, based in Madrid, chose to test that claim using Litmus’ Hotel Sector Metrics service.

Brief

Take one month of RHG’s spend (circa £500k) from the GPO and compare it with others in the hotel sector

  • No whitewashing of the results – tell it as it is
  • Provide an executive-level report which easily identifies what’s good and also where opportunity exists

Approach

This was not a new challenge for us as we’ve provided this service not only to clients in the hotel sector but do so regularly for clients in the Education, Leisure and Care sectors too. The well-established approach deployed was:

1. Upload the data into our Hotel Sector pricing database

2. Check the client’s product pricing is correctly pinned in the database to the same and comparable products available to the hotel sector

3. Check the factoring for the unit of measures are like-for-like

4. Address any anomalies in consultation with the GPO

5. Deliver the five-page web-based Power BI dashboard to the RHG executive team

Outcomes

1. More than 99% of the products were suitably pinned to existing alternative pricing in our database

2. RHG executive team were delighted with the simplicity of the reporting and the efficient way in which it easily and quickly provided visibility as to where opportunity existed amongst many thousands of lines of data

3. RHG subsequently chose to undertake the service on a two-year deal

4. Since that first month’s report their pricing has improved by more than 4% against the market average, which is an estimated saving of more than £275k

Litmus has provided a tool which enables us to track our position across all our European food and beverage commercial spaces. It has helped us to compare performance across our hotels and has given us transparency. The system is user friendly, and the reports can be customised to each user – it has given us data to make decisions for the future and brings credibility to internal discussions.

Maria Madrid Rodenas – VP Procurement EMEA RHG

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