How Tariffs Are Shaking up the Hospitality Industry

from hospitality design on Apr 11, 2025

Procurement and manufacturing experts weigh in on how to stay nimble amid global uncertainty

As shifting tariff policies continue to disrupt global trade, hospitality developers and procurement teams are facing tough decisions when it comes to sourcing furniture, fixtures, and equipment (FF&E). 

1.A broader, smarter supply chain emerges 

Sourcing from China carries major cost and risk.  Havng [China] be the only place, doesn’t make sense. Sourcing is diversifying. Canada and Mexico, remain favorable under the U.S.-Mexico-Canada Agreement (USMCA), which includes protections around furniture manufacturing. A possible resurgence in U.S.-based manufacturing.  A clear shift in client behavior toward domestic sources and simplified supply chains. It’s not just about cost savings—it’s about certainty, Clients are actively seeking U.S.-based manufacturers who can offer consistent quality and predictable timelines.

2.Uncertainty is the new cost driver  

With policies changing by the day, many developers are choosing to delay rather than make potentially costly decisions. Clients are looking to manufacturers to absorb as much of the tariff impact as possible before they can even consider passing it along to their customers.

3.Understand every part of the supply chain 

With tariffs applied not only by country but by component origin, manufacturers and procurement firms must stay agile and transparent.  It’s incumbent upon purchasing companies to take that extra step to talk with vendors to ask. Don’t make snap decisions. Evaluate the impact on a vendor-by-vendor, country-by-country, product-by-product basis

4.A new price baseline is here.

The bidding process will still happen—but set at a higher base. The new baseline of costs will be higher, but as manufacturing and alternate sources become more viable, those costs have a net benefit to everybody that touches it along the way