FF&E in a world with COVID-19.
My college friend called me the other day worried about me. He knows my work focuses on handling the procurement of furniture, fixtures and equipment for hotel projects around the world. I can see why. We have all been bombarded with headlines portraying words like “delayed”, “uncertainty”, “suspended” and, “closed”.
That call encouraged me to type a few words explaining what I suspect will end up happening to our Industry. You see, I believe the COVID-19 will have both temporary and permanent effects over the FF&E industry.
TEMPORARY EFFECTS:
- Projects that did not have funding approved, or that were depended on operating income will likely be halted. It is going to be harder to approve funding from now until the end of 2020.
- Projects to be delivered in the months of April-July will likely be delayed but delivered before year’s end. The delay is not likely to be just on the supply chain side, but on the customer side as well. Delivery dates will be pushed to minimize the economic impact of on-time delivery with a delayed opening.
- Projects with delivery dates for the second half of the year do fall in that uncertainty area. There is a fear of missing out if the world reopens during the summer months, but there is also the fear of opening and not really seeing demand come back (especially on the Hospitality side).
- Projects with delivery dates for 2021 and 2022 will continue to move forward, perhaps with some revisions to take into account some of the permanent effects of this pandemic.
PERMANENT EFFECTS:
- COVID-19 will change the risk profile of our industry. Much like, Sept. 11 did. Insurance premiums, access to credit and overall terms will change now that we consider that a pandemic can literally stop the world.
- More importantly, this event will change the type of products and services we provide. Just ask yourselves the question: How is the hotel lobby going to look like now in a world with COVID-19? Are we going to have hand sanitizers everywhere? How about voice activated elevators? Using our phones to register, open doors, turn on lights and even change TV channels at our hotel rooms? I bet room service will be favored for a while, so we will need rooms to better handle dinning in-room.
- The materials we use and how the furniture and Equipment is constructed will also change. Consider for example the widespread adoption of the performance fabrics for clean-ability, like the specs we see for healthcare. Or perhaps the use of more solid surface headboards or wipeable materials to be in line with new processes and procedure hotels and cruise lines are already implementing.
- It has been happening already, but I suspect our supply chain will favor local suppliers. Customers would like the flexibility of shorter lead-times, domestic credit and the ability to change or adapt spaces with local partners.
In summary, I see “delays” happening in the short-term but long-term projects will continue. I would invite you to exchange “uncertainty” with the certainty that hotels, cruise lines, airlines, theme parks and malls will reopen, and they will need to adapt to the new reality – they will need our help making sure those spaces work in this new reality. If a project was “suspended,” it is likely that it was not funded yet and will eventually restart, so be there when it happens. The world will open again, so even if some of our customers are “closed” right now, we should start working on products and layouts that will help them re-open, and use local sources to do it quicker. Stay safe and let’s get to work!
Antonio Turco-Rivas - Director of KANNOA| SPACES
About Antonio Turco-Rivas:
Antonio is a Serial entrepreneur, co-founder of children’s furniture manufacturer P’kolino (www.pkolino.com) and Director of FF&E Hospitality and Commercial services for KANNOA (www.kannoa.com). He is also serving as Chairman of the Board for retail apparel venture IBEROPRENDAS S.L and is an active consultant for small and medium size business in the subjects of Business Development, Business planning, E-commerce, Business transformation and Crisis Management.
Antonio’s education includes a master’s in business and administration from Babson College, a certification in project management at Cornell University and a BS in Economics by the Universidad Católica Andres Bello in Caracas Venezuela.
