Hotels do not tend to make big, obvious losses. Their troubles start with minor leaks: an order placed over the phone without anyone checking the rates, an invoice that doesn’t match the delivery, a kitchen that reorders out of habit. One of the most enduring software solutions to that is Adaco. Here is an explanation of what it is, who will find it useful, and how to test your operation before watching a vendor demo.
What This Software Actually Is
Fourth says the platform is a mobile-based procurement, inventory and supply chain management solution for the hotel and resort industry that has over 30 years of experience in the hospitality industry. The original software company was based in Norwalk, Connecticut and was purchased by Fourth in September, 2012. There is a discrepancy in the year of founding (1984 on some profiles, 1985 on others) so take that with a grain of salt.
It has a narrow pitch on purpose. According to vendor materials, it’s aimed just at the hospitality industry, its best asset—and speed bump. The workflows will be familiar if you’re running a hotel, restaurant group or resort. A wider procurement suite will likely be more appropriate for a general retail or manufacturing business.
What You Get: Core Capabilities
Based on the self-promotion by the vendor and the list of third-party features, there are four groups:
- Purchase workflow: One software-review site touts automated purchase order creation and approval, requisition workflow and invoice processing.
- Control of inventory for all food and beverage, consumables, housekeeping, engineering and other purchasing functions.
- Open source recipe and menu tools with menu engineering and analytics modules and dashboards.
- Group-level visibility, which provides property-level detail and enterprise-wide roll-up reporting and integration for central purchasing power.
One integration warning: Product does not have an API (as mentioned in the same review listing). This is a third party statement, and could be inaccurate, so check with the vendor. This is something to decide before you sign a new lease or agreement, not after—if you need data to be automatically transferred to your accounting, point-of-sale or property-management systems.
Original Framework: The Procurement Maturity Ladder
Not every property needs dedicated software. We use a four-level ladder to judge where a hotel stands and whether a purchasing system would change anything.
| Level | Description | Typical signs |
| 1. Ad hoc | Phone, email and paper orders | No single record of what was ordered |
| 2. Spreadsheet | Shared sheets and manual reconciliation | Frequent price and quantity mismatches |
| 3. Digital per property | Software at each site, but each property buys independently | Strong local control, no group leverage |
| 4. Centralized | Group-wide catalogs, contract pricing, shared analytics | Negotiated rates actually get used |
The use of it: A system works best with the hotels at Level 1 and 2. Groups at Level 3 benefit from roll-up/centralization. If a property is already at Level 4, then the same should compare vendors based on analytics and integration level, not functionality.
Illustrative Savings Model (Hypothetical, Replace With Your Numbers)
Vendors adore to state a promise of “savings.” Here’s a quick formula you can use:
The annual leakage = the annual purchases multiplied by the leakage rate.
Recoverable savings = (Annual leakage) × (Capture rate)
A hotel group with an annual turnover of $2,000,000 on food, beverage and consumables could be losing $20,000 to $60,000 per year due to leakage from purchases off contract and mismatches on their invoices. If software can capture 50% of that, you compare the amount you can recover with the subscription, implementation and training costs and you’re done.
It’s the leakage rate that’s important and it should be measured prior to any demo. Get 3 months of invoices and check them against the contracted price.
The Pre-Demo Scorecard
For each of the following questions, rate each vendor from 1 (weak) to 5 (strong):
- Is it compatible with our accounting system? Is there an API?
- Do staff have access to materials on a phone or tablet to receive deliveries and to count stock?
- How and who updates supplier price files?
- Does the recipe costing adjust that changes in the prices of ingredients?
- What is the minimum number of spreadsheet exports required for head office to see all properties?
- How long is this implementation going to take in reality? and Who provides the staff time.
- What training and continuous support is provided?
- How much does it cost, including set-up fees, per property fees and add-ons?
A total of 32 or more is a good candidate. In writing, press for answers on items that are weak, from 24-31. Below 24, keep looking. Prices were not available in the literature consulted, and must therefore be quoted for question 8.
Alternatives Worth Comparing
Before making a decision, consider at least two alternatives. One company-profile database identifies BirchStreet Systems as a direct competitor, and numerous hotel groups compare the wider range of the procurement suites or their existing accounting vendors’ modules. Request the vendor to provide a reference customer with a comparable size and mix of brands, then call the reference customer.
The Takeaway
Adaco is designed for the hospitality operative that requires purchasing, inventory and recipe costing in one system, but for hotels, particularly multi-property groups, where they need to have a centralised purchasing system. It’s not for you if you need open APIs to integrate with, or if your purchases are small enough that they aren’t revealing any money. To start self-measure, for instance, run the scorecard and treat all vendor claims—including the ones above—with a demo.
