The U.S.-Iran war and the closing of the Strait of Hormuz has been a major disruptor of global supply lines.
The procurement side of the hospitality industry — responsible for ordering furniture, fixtures and equipment to fill up a hotel — relies heavily on global trade and shipping moving uninterrupted to fill orders and help hotels finish development or renovations on time. When the U.S.-Iran conflict broke out at the end of February, hotels in the Middle East and their procurement partners had to scramble to adjust their ordering strategies.
Manesh Balani, managing director of Dubai-based procurement firm Orsini SPI, joined “The Upgrade: EMEA Hospitality News” podcast to discuss his company's pivot over the last several months. The first priority was safety, followed by coming up with a new strategy to meet hotel clients' needs and address their concerns.
“OK, now what do we do and how do we continue to operate? … We’ve been working together with our clients seamlessly, making sure that their projects are not going to be interrupted,” Balani said. “Saudi Arabia, fortunately their shipping ports have remained open; likewise across Africa there is no disruption.”
Getting deliveries is a little tougher in the United Arab Emirates with Dubai located on the Strait of Hormuz, he said.
One ship that was unable to move on the strait contained all the table tops for one of Balani's hotel clients, he said. The table bases had already been delivered, and the stalled ship contained the very last delivery piece for that particular project. The ship was diverted to Karachi, Pakistan, resulting in a two-month delay.
By and large, the solution to the shipping disruptions was to get the shipments diverted, along with a lot of paperwork, to a different freight corridor that saw the goods come ashore at Fujairah on the Gulf of Oman/Arabian Sea side of the UAE.
That change was made more difficult by the sheer number of other ships needing new routes and new timelines. But Balani added government entities were quick to aid the process of getting goods to where they were needed.
In the UAE, the government opened “green corridors” from Oman and Saudi Arabia to ease the bureaucracy and flow of goods to and from the UAE and its neighbors, he said.
Balani added a major consideration of his work is around due diligence and process concerning developments’ budgets.
“Where do we make sure that we are putting the right money to get the right value for the product that is going to be felt, is going to be touched, by a customer. … What we're saying to [our clients] is that with all the uncertainty that is out there, rather than the just-in-time strategy that we used to work with, let’s make sure we are going with a strategy that will make sure the goods are here, that they are next to you and that you are going to be able to have them delivered and installed,” he said.
For the full interview with Manesh Balani, please listen to the podcast embedded above.
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