Each aspect of the business requires a prudent allocation of budget for smooth running. Therefore, hotel furniture, fixtures, and equipment need budget management. Whether it is due to the wear and tear of existing ones or a part of the hotel’s decoration, the FF&E budget segment counts the furniture, fixtures, and equipment. Since FF&E addresses a colossal cost, a separate budget section should represent this category.
What is Included in Hotel FF&E?
When it is about the hotel structure, the FF&E budget might include categories that deal with the expense of decorative items, such as hotel room furnishing, restaurant bar, common area furnishing, and storage equipment.
On an expanded level, the FF&E budget in hotel construction projects can include the expense of fixed or loose furniture. Consequently, the FF&E budget encounters each major/minor accessory or facility of different types required in a hotel construction project.
FF&E Reserve of FF&E Budget in Hotel Furniture Project
FF&E Budget encourages the consumption of reserves, especially accumulated for this purpose. Therefore, instead of allocating an amount from the budget reserved for other things or managing a different amount, it is better to dedicate 3% to 5% annually from the annual revenues.
In the early years of the hotel’s construction, reserving 1% to 2% might be enough as an FF&E reserve. The renovation is not needed in the early years, and allocation of budgets is made only considering the demand of FF&E. Nevertheless, in the 3rd or 4th year, the renovation needs might be recurrent based on FF&E renovation or replacement requirements. In that case, allotting 3% to 5% may be needed to meet the required funds.
How to Estimate Initial Cost of FF&E Budget?
As an initial step, the estimation of cost appears to be critical. The nature of your business hugely influences the assessment of initial costs because cost estimation for the FF&E budget is different due to the difference in the hotel level. For instance, according to the experts, if you are estimating the FF&E budget for your hotel, it should be 12% to 16% of the total financial investment reserved for the construction and other expenditures of the hotel.
Furthermore, the cost-per-square-foot is a well-known approach to estimate the initial costs of the budget for FF&E. For example, the FF&E budget ranges from 9 to 12 US dollars per square foot of space for a gym or sports complex in the hotel. But then again, this estimation cost depends upon certain factors that include inflation, labor wages, etc.
How to Reduce Cost in FF&E Purchasing?
Reducing the cost of FF&E purchasing can save a significant amount of investment. Along these lines, there are three ways used to reduce the cost of FF&E purchasing:
1. Compare Vendors
Cost estimation is an essential part of allocating the FF&E budget, which is the defining part of the FF&E purchasing. Typically, investors consult with different contractors and put their estimation for the cost. So, the vendor with the least cost can bring down the FF&E purchasing.
2. Teams Matter
Secondly, the team that works on the FF&E purchasing matters a lot. Earlier, the planning team should only put the necessary items on the list, and later, the team should better investigate the number of items listed. Here it is needed to delist the things that are not necessary.
3. Purchase through FF&E Furniture Wholesale
The primary advantage of purchasing through FF&E furniture wholesale is the economy. As some FF&E furniture suppliers have formed a complete production and supply chain, it will be relatively cheap to buy furniture from them. For example, IFC FF&E is located at China, the world’s largest centralized furniture market. You can reduce costs by purchasing FF&E furniture in these places.
Apart from this, with regards to purchasing new furniture pieces for hotel construction projects through wholesale, customers enjoy different benefits, including an opportunity to customize unique furniture for their program, safe delivery of products, and amazingly unrivaled quality.
IFC FF&E is a professional hotel furniture manufacturer that deals in supplying furniture for hotels. Even now, there have been around 1000 luxury hotels worldwide whom IFC FF&E has served. IFC FF&E manufactures furniture for resorts, hotels, and apartments and offers turnkey project solutions, such as FF&E furniture and decoration fittings and customized services like FF&E budget consultation. Henceforth, if you want to add in the grace of your hotel, it is time to consult with IFC FF&E.