Between March 2020 and mid-2021, the hotel industry lost nearly 400,000 jobs. Property Improvement Plans were frozen. Capital budgets went to zero. Procurement departments that had been placing millions in annual orders simply stopped calling. Hotels that had been planning renovations for 2020 and 2021 pushed those timelines indefinitely, creating a backlog now estimated at $12-15 billion in deferred work.
That was then. By the end of 2022, Americas RevPAR had recovered to 108% of 2019 levels. The global hotel construction pipeline was climbing toward what would become an all-time record. And procurement teams were spending again — but not the way they used to.
The pandemic did not just pause hotel procurement. It permanently rewired how hotels source, evaluate, and manage their supply chains. For suppliers who understand what changed and why, the next several years represent an outsized opportunity. For those still waiting for the old playbook to come back, it will not.
What Actually Happened to Hotel Procurement During COVID
The Freeze (March 2020 - Mid 2021)
The impact was immediate and total:
- Capital budgets frozen. PIPs deferred by brand companies, some for 18-24 months.
- Operating purchases slashed. Occupancy dropped below 20% in many markets. Hotels that were open cut amenity, linen, and supply orders to bare minimums.
- Vendor relationships disrupted. Suppliers who depended on hotel revenue saw their order books collapse. Many smaller manufacturers went under.
- Staff reductions. Hotel procurement teams were cut alongside the broader workforce. The people you used to call were no longer there.
The Uneven Recovery (Mid 2021 - 2022)
Recovery did not happen all at once. It followed a clear geographic and segment pattern:
| Market Segment | Recovery Timeline | 2022 RevPAR vs. 2019 |
|---|---|---|
| U.S. leisure (resort, drive-to) | Mid-2021 | 120%+ of 2019 |
| U.S. urban business | Late 2021 - 2022 | 85-95% of 2019 |
| Europe | H1 2022 | 97% of 2019 |
| Asia-Pacific | H2 2022 - 2023 | 68% of 2019 |
| Group/meetings segment | 2022-2023 | Gradual return |
This uneven recovery meant suppliers faced wildly different demand signals depending on their customer base and geography. A supplier selling to Florida resorts was overwhelmed with orders by mid-2021. A supplier selling to Manhattan business hotels was still waiting.
The Budget Reality
The hotels that survived the pandemic did so by cutting everything that was not essential. That instilled a cost discipline that has not fully relaxed, even as revenues recovered. The procurement mindset shifted from “spend to standard” to “justify every dollar.”
In practical terms, this means:
- Total cost of ownership matters more than ever
- Value engineering — achieving the brand standard at a lower cost point — is actively rewarded
- Longer product lifecycles are preferred over frequent refreshes
- Multi-purpose products that reduce the total number of SKUs a hotel needs to manage are gaining traction
Five Structural Changes That Are Not Going Back
1. Supply Chain Diversification Is Permanent
The container shipping crisis — with costs at 5-6x pre-pandemic levels through 2021-2022 — was a one-time event. But the strategic response to it is permanent.
By 2023, 57% of companies reported nearshoring as a key element of their supply chain strategy. In the U.S., 33% of companies were planning to nearshore by 2025. Audit and inspection demand from U.S. buyers in Mexico jumped 17% year-over-year in Q3 2023. Vietnam recorded the strongest reshoring-related sales increase globally.
Hotel procurement directors are not going back to single-source, single-country supply chains. The lesson was too expensive. They are building supplier networks with redundancy by design — multiple suppliers per category, multiple manufacturing geographies, and multiple logistics routes.
What this means for you: If you can offer domestic or nearshore production, dual-sourcing capability, or inventory buffers that protect against disruption, these are now differentiators worth leading with in your pitch.
2. Digital Procurement Has Crossed the Adoption Threshold
The pandemic forced hotels to adopt digital tools out of necessity. That adoption stuck and accelerated:
| Metric | 2022 | 2024 |
|---|---|---|
| Hotel tech budget allocated to new software | 23% | 69% |
| Hotels planning 3%+ IT spending increase | 78% (2023) | Continued growth |
| Hotels with at least one major tech project | 81% | Near-universal |
| E-procurement sales growth | 18% YoY (crossed $1T) | Continued double-digit growth |
Procurement platforms like Avendra (2,000+ vetted suppliers), Birch Street Systems, and Fourth have become central to how hotels discover, evaluate, and order from suppliers. If you are not listed on these platforms with structured product data, professional imagery, and current pricing, you are invisible to a growing share of the market.
3. The PIP Backlog Creates a Multi-Year Demand Wave
This is the single largest near-term opportunity for hotel suppliers. The $12-15 billion in deferred PIPs cannot be postponed indefinitely. Brands have contractual leverage over franchisees, and the quality assurance inspections are resuming.
The renovation math is also changing:
- Renovation costs increased 6.25% from 2022 to 2023 alone
- PIP costs are up 30%+ versus pre-COVID levels
- Guest room renovations range from $8,000 to $25,000 per room
- Some vendors reported product price increases of 90-300%
Hotel owners are spending more per room than they planned — and they need suppliers who can deliver quality products at scale without further cost surprises.
The construction pipeline is amplifying this demand. The global pipeline hit a record 15,820 projects / 2.4 million rooms by Q4 2024, with the U.S. reaching an all-time high of 6,378 projects. Every new hotel opening needs a complete FF&E package, OS&E inventory, and technology installation.
4. The Workforce That Buys Has Changed
Nearly 400,000 hospitality jobs were lost between February 2020 and August 2022. By 2024, 115,000+ positions were still unfilled, and 79% of hoteliers reported ongoing staff shortages.
This matters for suppliers because:
- Procurement teams are leaner. Fewer people are making more decisions, which means they value suppliers who make the process easy — complete documentation, responsive communication, no hand-holding.
- Decision-makers are younger. A generation change accelerated during the pandemic. These buyers are digitally native, prefer self-service research, and evaluate suppliers online before picking up the phone.
- Automation is being embraced. With 87% of hotel businesses reporting that new technology was crucial, procurement teams are using AI tools, automated RFP evaluation, and e-procurement platforms to do more with fewer people.
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5. Sustainability Moved From Marketing to Procurement
Before COVID, sustainability was a brand positioning exercise. After COVID, it became a procurement requirement. The shift was driven by three converging forces:
Regulatory pressure. California’s AB 1162 banned small plastic amenity bottles in hotels with 50+ rooms starting January 2023. The EU is banning individually packaged hotel amenities by 2026. These are not voluntary — they are mandates that require suppliers to reformulate products and rethink packaging.
Brand commitments. Marriott committed to net-zero by 2050 (SBTi verified). Hilton committed to 75% carbon reduction by 2030. These targets flow down to supplier requirements — brands are increasingly asking for environmental product declarations, recycled content percentages, and carbon footprint data from their vendors.
Guest demand. A 2023 UNWTO survey found that 73% of tourists prefer hotels with sustainable practices. Sustainability certifications grew 20% between 2022 and 2023, with LEED-certified hotels exceeding 1,000 globally.
For suppliers, this means sustainability documentation is no longer a nice-to-have addendum to your pitch — it is a scored criterion in vendor evaluation.
Where the Opportunities Are Largest
For New Suppliers
The pandemic’s silver lining for new entrants is that established supplier relationships were disrupted. Hotels that worked with the same vendors for a decade found those vendors unable to deliver during the crisis. Procurement directors are now actively maintaining secondary and tertiary supplier options — which creates openings that did not exist in 2019.
The best entry points:
- Domestic and nearshore manufacturing — reduced supply chain risk
- Digital-first presence — listed on procurement platforms with structured product data
- Sustainability credentials — certifications that many legacy suppliers do not yet have
- Specialized niche products — categories underserved by the big GPO-listed suppliers
For Existing Suppliers
If you already sell to hotels, the opportunity is market share expansion. The suppliers who maintained delivery capability during the disruption earned trust that translates to more business as spending recovers.
Double down on:
- Supply chain resilience as a selling point — document your redundancy, inventory levels, and delivery track record
- Technology adoption — get your products on digital platforms, build integration with procurement systems
- Sustainability leadership — get ahead of the regulatory curve with certifications and product reformulation
- Proactive account management — hotels with leaner procurement teams need suppliers who anticipate needs rather than wait for POs
By Product Category
| Category | Opportunity Level | Why |
|---|---|---|
| FF&E (furniture, fixtures, equipment) | Very High | $12-15B PIP backlog + record construction pipeline |
| Textiles (linens, towels, bedding) | High | Replacement cycles deferred; sustainability-driven reformulation |
| Amenities and toiletries | High | Regulatory changes (AB 1162, EU 2026) forcing product transitions |
| Technology (smart room, IoT) | Very High | 86% of operators introducing in-room tech; mobile key adoption above 70% by 2025 |
| Cleaning and hygiene products | Moderate-High | Elevated hygiene standards persisting post-pandemic |
| Kitchen and F&B equipment | Moderate | Labor shortages driving automation investment |
Your Next Steps
- Assess your supply chain resilience. Can you guarantee delivery if your primary supplier or shipping route is disrupted? If not, build redundancy now — it is both good business and a selling point.
- Get digital. If you are not on at least one major procurement platform with structured product data, make this your top priority this quarter.
- Map the PIP backlog. Identify hotels in your target market that are due for renovations. These are the highest-probability, highest-urgency sales opportunities available right now. (Future posts on this blog will cover how to identify renovation signals — stay tuned.)
- Invest in sustainability. Get the certifications that hotel chains are starting to require: GREENGUARD, FSC, OEKO-TEX, or whatever applies to your category. Do it now, before it becomes table stakes.
- Rebuild your contact database. The people who made purchasing decisions in 2019 may not be in those roles anymore. Update your contacts, especially at management companies and chain procurement teams.
For a comprehensive overview of entering the hospitality supply market, read our complete guide to becoming a hotel supplier. To understand the procurement process from the buyer’s side, see our guide to understanding hotel procurement and the buyer’s journey.
The pandemic was a stress test for the hotel supply chain, and many links in that chain broke. What is being rebuilt in its place is more digital, more diversified, more sustainability-conscious, and more open to new suppliers than the pre-2020 market ever was. For suppliers ready to capitalize on the recovery, understanding the hotel renovation wave and PIP procurement cycle is essential. The suppliers who recognize this structural shift — and position themselves accordingly — will capture a disproportionate share of the recovery spending. The ones waiting for the old world to come back will be waiting a long time.
Use these related guides to keep moving through the same procurement, sales, or market research thread.
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