In the third episode of Espacios que hablan, Laura Huerta, Interior Design Director at U Interior Design, together with Pablo Gironés, marketing expert with a focus on industrial design, explore the complexities of the furniture market for the hotel sector. During the conversation, they reveal the challenges publishing companies face when trying to compete in this sector, particularly in hotel chains, and how margin management affects not only price, but also service.
The problem of discounting in hotel furniture
Pablo Gironés raises a crucial issue in the furniture design and marketing for the hotel sector: the impact of aggressive discounting in order to enter hotel chains. ‘Whoever wants to pay for it’ is often the mentality of many, but as he points out, ‘it doesn’t really work like that’. In order to enter this competitive market, publishing companies are often forced to offer significant discounts that significantly reduce their profit margins.
The problem is that these discounts affect not only profitability, but also the service that suppliers can offer. ‘They have no room to manoeuvre,’ he says, referring to how companies are left without resources to solve problems that inevitably arise during hotel installation or maintenance. The result is a situation where hotels receive less technical support and attention to detail, which affects the overall customer experience.
The impact of margins on service
This discounting approach to capturing large contracts not only creates financial challenges for publishing companies, but also has repercussions on service. When a furniture supplier does not have sufficient profit margins, it is almost impossible to offer a quality service. ‘It is impossible,’ emphasises Pablo Gironés, stressing that when the margin is so tight, any inconvenience or adjustment that the hotel needs during installation or use is neglected, because the supplier simply cannot afford it.
This creates a cycle where hotels, while getting lower prices on furniture, in the long run may face problems with durability, quality of service or even response to unforeseen problems. In a sector like the hotel industry, where customer experience is paramount, such compromises can be detrimental.
The strategy of the price quotation
One of the most interesting aspects is the importance of the design brief in industrial design and how it affects decision-making from product conception onwards. The cost estimate is a tool used to break down the production costs of a product, from the final selling price downwards, ensuring that each element fits within the allowed margin. ‘We do it from the top down,’ he explains, referring to the process by which they determine the retail price and then adjust the cost of production to maintain profitability.
This approach is key in hotel projects, where budgets are tightly controlled and where each piece must justify its value not only in terms of aesthetics, but also in terms of durability and functionality. For Pablo Gironés, knowledge of the prices and margins associated with different brands and suppliers is essential during the project planning process. ‘You already have that preconceived idea,’ he says, suggesting that as he designs, he already knows which products will fit within the budget and which will not.
Branding and positioning in hotel design
Another point highlighted in the episode is the relationship between brands and price ranges. When an interior design studio is developing a project, designers already know which brands they can use depending on the available budget. This association between brand and price range allows them to work more smoothly and efficiently, without the need to constantly review detailed rates or prices.
The value of a brand goes beyond its aesthetics; it also lies in the trust it generates among industry professionals. Designers need to ensure that the furniture they select is not only attractive, but also meets the durability and resistance requirements demanded by the hotel environment. This is why prestigious brands, although more expensive, often end up being the best option in high-end projects.
The sustainability of design in the hotel sector
During the conversation between Laura Huerta and Pablo Gironés in Espacios que hablan, a critical aspect of industrial design for hotels came to light:
The need to balance price, quality and service.
Although discounts can be a strategy to enter hotel chains, compromising margins not only affects the profitability of the supplier, but also the quality of the service that can be offered.
We invite you to watch this excerpt from episode 3 here.