Room at the Inns

Hospitality companies spend billions of dollars on supplier diversity and offer more and more availability to VOBs and SDVOBs in their supply chains.

Room at the Inns

A veteran of the U.S. Army, Kenyatta Lewis understands the value of a military background when it comes to running a business. As executive director of supplier diversity for MGM Resorts International, Lewis oversees the matchmaking that takes place between some of the world’s most renowned resorts – the MGM Grand, Bellagio, and City Center in Las Vegas, to name few – and the plethora of diversity suppliers in the company’s supply chain. About a year ago, the company made official what it had already known. It wanted veteran-owned businesses to be part of its supply chain.

“We’ve always had veteran-owned businesses in our supply chain,” Lewis says. “About a year ago we made it official and added veteran-owned businesses to our definition of diversity suppliers.”

According to the company, MGM has spent more than $2.5 billion with more than 1,000 minority-owned suppliers since it launched its supplier diversity program in 2001. While it’s still too soon for the company to know exactly how many of those existing suppliers are already veteran-owned business, Lewis says that the initial scrubbing of the company’s existing suppliers that started in early 2012 found that the company already had a significant presence of VOBs in its procurement pipeline. Now, it’s looking for more.

So, too, is Wyndham Worldwide, the world’s largest hospitality company with more than 7,000 hotels around the globe and three business units covering the vacation rentals and vacation ownership markets. “Our supplier diversity definition includes veteran and service-disabled veteran-owned businesses,” says Jose Nido, vice president of global supplier diversity for Wyndham Worldwide.

“Along with the MBE (minority business enterprises) groups, we feel that veteran-owned and service-disabled veteran-owned businesses are under-utilized businesses,” Nido, a U.S. Air Force veteran, continues. “When you look at it, people coming back from the services and trying to start businesses; it’s rough for them. Sometimes they don’t get the attention they deserve, so we include them in those groups that we feel have been historically under-utilized by corporate America in general.”

Making Progress

Both Lewis and Nido acknowledge that veteran-owned businesses have traditionally been found more in government supply chains where there is a requirement in place. In fact, Nido advises veteran business owners to take advantage of the access government contracts offer in order to gain experience as a supplier and to make a name for your business as a dependable supplier. But that doesn’t mean the corporate world hasn’t taken notice of the value of veteran-owned business.

“While it’s been only a year since we officially put veteran and service-disabled businesses into the definition of diverse suppliers, we’ve taken steps to learn more about veteran suppliers by visiting and networking at various events,” Lewis points out. 

While not beholden to a requirement for spending with SDVOBs like government agencies, both MGM and Wyndham have made significant progress in recent years when it comes to numbers.

During a recent move of the Wyndham Vacation Ownership business unit headquarters in Orlando, Fla., Nido says 36 percent of the project’s contractors were veteran-owned. “We’re very proud of it,” he says. “We were moving to a new building and had to do a lot of improvements—in the millions of dollars—and 36 percent of the money spent went to veteran-owned firms.”

Nido is also proud of the company’s overall progress when it comes to VOB suppliers. “When you look at the total of our diverse spend, 3.5 percent in 2011 went to VOBs, and 7 percent in 2012,” he says.

Nido says that there are a number of areas where Wyndham supports veterans. including everything from actively recruiting veterans to join its workforce, offering a dedicated vacation club for active and retired military, an associate business group for its veteran associates and for those that support veterans, and suppliers.

Lewis points to a few areas where MGM frequently buys products and services, many of which are through VOBs. Those areas include: cleaning and maintenance, facilities and engineering supplies, food and beverage, kitchen equipment and uniforms.

Nido says he is always actively looking for suppliers. “One thing that is very important is that we believe so strongly in supplier diversity here at Wyndham Worldwide that it is a policy for us that every request for proposal has at least one diverse supplier in it,” he says.

A Good Opportunity

While the hospitality industry isn’t always the first thought of when it comes to veteran-owned business suppliers, Nido and Lewis say there is plenty of opportunity for new suppliers in the industry.

While the industry had traditionally concentrated more on minority and women-owned business in its supplier diversity programs, veteran-owned and service-disabled veteran-owned businesses are increasingly being included in many company’s definition of diversity suppliers.

“The more we move on there are more opportunities that open up,” Nido says.

He advises companies looking to get into the hospitality supply chains to do their research and get experience working with government contracts. “Companies are looking for diverse businesses that are well established and have a national reach,” Nido says. “They want competitive pricing, top quality and great service. So, not everyone fits the need, but that applies to any diverse business.”

Nido says that starting with smaller accounts that offer hotel companies a product or service that provides a clear competitive advantage can quickly make their way through the supply chains of large hospitality companies. “I never discourage anyone, even if it’s a very small firm,” he says. “If they have a unique offering that makes a big difference.”

Written by Len Vermillion


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