Focus on Leadership: Alan Benjamin shares his expertise in furniture, finishes and equipment (FF&E) for the hospitality industry - Nov 2021
Interview by Jessica Chevalier
In 1998, Alan Benjamin started Benjamin West, a hospitality industry furniture, fixtures and equipment (FF&E) procurement firm. Today, the firm is one of the world’s largest, with a client list comprising the biggest names in the hospitality market. Headquartered in Boulder, Colorado, Benjamin West has offices in Chicago, Dallas and London and employs nearly 100 individuals.
Alan is third generation in the hospitality business. At the age of eight, he began working with his father and grandfather in the family business, Benjamin Brothers, a provider of interior furnishings for hotels.
Alan and his wife, Nicole, have two children: a daughter who is 18 and a son who is 16.
Q: What drove you to leave your family’s business to start Benjamin West?
A: My grandfather and his brother started Benjamin Brothers in Chicago in 1931, amid the Great Depression. Benjamin Brothers began in the linens business but evolved into offering full interior furnishings for hotels. Most of Benjamin Brothers’ work was in the dealer model, not the agent model, meaning that it would buy, mark up and resell product.
I began working alongside my grandfather and father in the business when I was eight years old. I moved to Colorado to attend the University of Colorado from 1982 to 1986, then moved back to Chicago to work in the family business. In 1990, I moved back to Colorado as a Benjamin Brothers employee.
In May 1998, two things happened: I started Benjamin West on May 11 and got married two weeks later. I wouldn’t recommend doing those things in such close proximity, but, today, I still have both-the company and the wife.
Benjamin West’s model is that we never take title to anything. We are hired as a legal fiduciary agent for a hotel, similar to how a certified public accountant or attorney is hired. We are paid a disclosed fee-we don’t receive kick-backs or rebates of any sort. The hotel hires us as a professional to review the interior designer’s specification, send it out to bid, analyze the bids, issue purchase orders and deposit the checks.
Today, we are almost more an accounting firm that does FF&E purchasing on the front side. We have 70 staff in the U.S.-with another 25 in London-and almost one fifth of our U.S. staff is doing nothing but accounting. The accounting process has gotten very complicated with regard to state taxes, freight, historical tax credits, tax coding and the like.
Q: Tell me about your guiding principles.
A: On our business cards, we have the acronym AIR, which stands for accuracy, integrity and reliability. In terms of accuracy, we are issuing purchase orders for $1.5 million per day of custom goods. Many of these have no part number or SKU. We have to be accurate.
In terms of the reliability, we often say now means now, but a nicer way to say that is, time is always of the essence. You can’t sell a day-old hotel room like you can a day-old bagel. If it’s Wednesday and you didn’t rent out the room on Tuesday night, you can’t make that up, so we are very focused on making sure that no matter what happens within the supply chain, our projects open on time. Displacement of revenue is a big no-no.
One thing many people don’t realize is that most of what’s in a hotel room-floorcovering, wallcovering, case goods, lighting-is made for one hotel. Obviously, there are some brand standards in select and extended stay, but even if it’s branded, that doesn’t mean the products are in stock anywhere. Fire retardance standards, for instance, vary greatly, so while a chair style may look the same from property to property, each may have a different foam inside to comply with different regulations.
Q: What is your outlook for the recovery of the lodging business? When do you think business will be back to 2019 levels?
A: Leisure hasn’t just recovered, it is blowing 2019 away. I’ve heard it called “revenge travel.” Post-lockdown, consumers have money, and they want to spend it. So if you own a resort hotel in Miami, you’re doing better than you did in 2019. However, if you own a huge convention center in San Francisco, you may not be loving life. Hospitality is a street-corner by street-corner business; 20 miles apart, stories can vary greatly.
In terms of business traveler demand, I’m more optimistic than most. I believe we’ll see that business back by the end of 2022 or start of 2023. We will learn to live with Covid as we did the flu; even in the worst flu season, I was still flying for business. And vaccine mandates by employers will be a boon for business demand.
But the biggest incentive for business travel will be when a competitor takes a client out for dinner and drinks and lands a deal that you tried to handle over Zoom. The next time, you will be showing up.
Q: How have you answered complaints from property owners about delays in their FF&E orders due to supply chain issues?
A: Supply chain issues are so well-publicized right now. We hear on the news that Costco is rationing toilet paper again. We hear that Ford’s sales will be down because of a shortage of windshield wiper motors-you can’t sell F-150s without windshield wipers.
We always advise clients, “Don’t dig the well until there is water.” Practically, that means don’t liquidate the old tile until the new tile is in your hands.
Q: Will we see a shift to products made in the USA because of these exorbitant container costs?
A: Many people think that everything within a hotel is coming from China or Vietnam. That isn’t true. Wooden bedroom furniture is from overseas, as are lighting components, but upholstered seating and fabrics are a global mix. Ninety-nine percent of the solution-dyed carpets hotels utilize are U.S.-made. When it comes to the more expensive woven Axminsters used in public spaces across four- and five-star facilities, those are an imported item. But vinyl floorcovering used in guest rooms or public spaces across the middle of the market generally comes from within an hour of Dalton, Georgia.
Q: How have the consumer’s expectations changed about the amenities they’d prefer in the last three years?
A: Guests want clean, and LVT has a better connotation of clean-if it is indeed well-cleaned. If there is a speck of dirt or a strand of hair, you will see it more with LVT than carpet. Amid Covid, the new luxury is, “How clean is my room?”
Q: We’ve seen a major shift in the types of floors used in guest rooms. Who is driving that, and is there a long-term economic advantage?
A: LVT moved into hospitality with a vengeance four or five years ago. It isn’t used in low-end properties, which have inexpensive carpet, and it isn’t used in high-end properties. It’s in 2.5-star to 4-star properties.
Generally, the cost of LVT is about double to purchase and double to install. But the cost over the life of the product is supposed to be less; it’s a 15- to 16-year item, instead of a to five- to seven-year item. That being said, some property owners are skeptical, noting that while the product might last that long, the brand won’t let them leave it in place that long because design trends will change.
While LVT provides the guest with a sense of cleanliness and provides ease of maintenance for staff, noise transmission can be high. And, compared to more patterned carpets that we see at the high end, it isn’t as much of a design element.
Each product-whether LVT, solution-dyed broadloom or carpet tile-has pluses and minuses in cost, durability and design. It’s up to us to decide what will be best for this property in this market. Solid surface is a great choice for a beach property in a high-humidity environment; for a tower without adequate insulation between floors, soft surface would be better for mitigating noise issues. Many of the decisions will be prescriptive solutions based on the building and environment a property is in.
However, things tend to go in cycles. If I had to predict the future, I’d say we might be using more carpet in ten years than we think.
Next year will be my 50th in this business. I’ve seen a lot of cycles. At one point, the bed was highly decorative with throw pillows and big patterns, then it transitioned to all white, and now we’re seeing flashes of color. Just as with the width of men’s ties or suit lapels, fashions change.
Q: The flooring industry has consolidated, and there are fewer companies focused in your sector. Does that stifle competition and your ability to find a fresh look, or does it make your sourcing challenges easier?
A: This is an interesting question. With the major mills and the more vertical mills, the depth and breadth of the offering is pretty massive. We don’t need 30 solution-dyed broadloom vendors, we need three to four with good customer service, good lead time and deep pockets. They must be well-capitalized because we need to know that if something goes wrong, they will be able back it up.
However, we are always open to new, innovative vendors. Smaller companies will drive innovation, so it’s a balance.
Q: What is your take on all the new brands in the lodging sector? What’s driving that need?
A: If you go back 30 years ago, we had Coke and Diet Coke. Today, we also have Cherry Coke, Diet Cherry Coke, Caffeine-Free Cherry Coke and Caffeine-Free Diet Cherry Coke. The market has been segmented massively in most consumer products, hotels included.
The other thing driving this is that the publicly traded companies that own brands need to show growth. They do that by introducing new brands, which they claim don’t compete with their existing brands.
Within the U.S., since 2015, 114 new hotel brands have been introduced for a total of 600. Worldwide, 300 new brands have been introduced since 2015.
Q: Do specifiers and purchasing firms always see eye to eye?
A: The answer is no. We come at the job from different perspectives, but the best firms realize that it’s okay not to agree on everything. It’s good to have checks and balances.
When disagreements happen, we put our egos aside and remember that we are working for the benefit of the hotel owner. There is a little compromise every which way. It’s our job to take what the designer comes up with and, without compromise, procure that at the lowest possible cost with the best warranty and terms of sale. When stuff happens-vendor issues, raw materials shortages-we say, what’s a brother-, sister- or first cousin-product that we can substitute in that won’t ruin the design’s integrity?
Q: What role does the sustainability of a product play in the procurement process?
A: Sustainability starts with the brand specifier, the owner and the specifier, but we are very conscious of it too. Most owners don’t want to pay a premium for sustainable products, but in flooring, especially with carpet, they don’t have to. Of all the different products in FF&E, the flooring industry is leading from a sustainability standpoint.
Q: The big guy is usually a target for the little guy, who will try to steal its relationships by offering lower prices. How do you defend against that?
A: The price for what we do is a disclosed fee. Because of our buying power and being number one or two in the world with our vendors, even if a competitor offers a $0 fee, our bid will still be the lowest and get the best price results.
If you had a concerning legal issue, would you go to the best attorney or the cheaper one? We are usually not the low or the high on the spreadsheet. But with opening properties on time, successful accounting closeouts and ensuring against cruel tax surprises, we are ten out of ten.
Q: What do you look for when hiring talent?
A: By far, the biggest thing I look for is fire in the belly-someone who wants to get up, work hard and be on a winning team. I believe that you shouldn’t be embarrassed to win if you outplayed your opponent mentally or physically that day. Today, many people are ashamed to win, even if it’s fair and square.
People who don’t fit with our culture at Benjamin West are generally free to go somewhere else pretty quickly, which is good for everyone. If they aren’t happy to be here, we don’t want them here. We like to create a can-do, positive, inclusive culture.
One thing I don’t do enough is celebrate the wins. I spend my days managing problems. It’s good to stop and acknowledge the successes. It’s a great thing when an experienced client, for which we’ve just finished a thousand-room project, points to one of Benjamin West’s employees and says, “We couldn’t have done it without them.”
Q: How do you balance your family time with the challenges of work?
A: If my wife were here, she would say that I don’t. When you start your own company and your name is on the door, you wake every day as a start-up, even when you are the largest in your field. The moment you don’t is when you are in trouble.
When I am in town, 99% of the time I am home for dinner. When I’m out of town, I’m doing my best to stay in touch. Fortunately, my wife likes travel, so we have taken many exotic vacations, and those are nice because you can completely check out.
Q: How do you stay sharp and fit?
A: Mountain biking, skiing, Pilates and vintage car racing, which I have been doing since 1992.
I race Porsches from the ’60s and ’70s. It requires total focus-mental focus, eye-foot coordination. I was part of the first-ever Porsche Club race in June of 1992.
Copyright 2021 Floor Focus
Related Topics:The International Surface Event (TISE)