Suppliers warned to steer clear of hotels that don't pay

It's best to be picky during a recession, says Renarte Hospitality Supplies boss

Salis: avoid hotels that don't pay.
Salis: avoid hotels that don't pay.

Suppliers who sell their products and services to as many hotels as they can will get stung during the downturn, director of Renarte Hospitality Supplies, Ranjan Salis, has said.

As a distributor of kitchen equipment, linen, tableware and catering equipment to the hospitality industry, Renarte claims that the suppliers who “have been going around like cowboys, saying ‘OK, I want this business and that business’, at margins that are unbelievable at times, have definitely paid a heavy, heavy price”.

The key, he said, is for suppliers to research potential clients carefully and resist the temptation of easy profits. 

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Chain hotels are generally a safe bet, but its owners must also be reliable, he continued.

“You have to be very choosy about who you’re doing business with. The stability of the owning company is critical,” he said.

“If we have an iota of doubt that something can go wrong, we pull back.  We’re very happy with not doing that business rather than expending 10 pairs of shoes trying to recover our money.”

Yet once suppliers have identified and built relationships with trusted clients, they have to be flexible with payment terms, especially in times of downturn, Salis stressed.

As a result, he has extended his payment terms from 30-45 days to 90 days, he revealed. 

“But you know your money is in the bank and you know you’re dealing with a solid partner who will pay you - there might be a delay, but he will pay,” he said.

“I haven’t had a single bad debt in three years.”
 

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