Last October, a mid-sized hotel owner in Arizona locked in furniture, fixtures and equipment pricing for a property improvement plan scheduled to deliver this spring. The numbers looked reasonable. However, six months later, when the containers cleared customs, the cost rose by almost 20 percent. The culprit wasn’t poor financial management: It was a new tariff environment that fundamentally shifted between order and delivery.
This is the reality of hotel development in 2026. The procurement decisions you make today will be subject to trade policies that may not exist when your furniture clears the port.
Tariffs as a Moving Target
Hotel FF&E and case goods are facing a remarkably complex tariff landscape. Since early 2025, furniture imports have been subject to layered duties that vary dramatically by country of origin. Vietnam, which was once viewed as the natural diversification play away from China, is now facing tariffs as high as 46 percent. They’re even higher on upholstered goods and cabinetry under reciprocal trade measures.
China, depending on product category and timing, has seen effective rates range from 34 percent to over 50 percent. Even products from traditional allies such as the European Union carry baseline tariffs of 10-20 percent.
For a 150-room select-service renovation with an $8 million FF&E budget, a 25 percent tariff swing translates to $2 million in unbudgeted costs. Enough to kill project returns or force painful value-engineering that compromises brand standards.
The challenge is more than just the tariff rates themselves: It’s the volatility. Tariff policies have shifted multiple times within single procurement cycles.
In April 2025, a 90-day tariff pause was announced. This created a mad scramble to accelerate orders, only to leave projects with longer lead times exposed when policies reverted. This resulted in a procurement environment where the most expensive risk isn’t necessarily the tariff rate itself, but rather the inability to predict what that rate will be when your goods actually arrive.
Supply Chain Realities
Hotel casegoods and FF&E procurement centered on Asian manufacturing, particularly China and Vietnam, for three decades. The logic was compelling: skilled craftsmanship, established quality systems, and pricing that made sense even with long lead times and ocean freight.
However, that calculus is now under severe stress.
China remains the world’s deepest furniture manufacturing ecosystem, with unmatched capacity for complex custom work and shorter production runs. Yet, current tariff exposure makes Chinese sourcing viable only for products where quality, customization, or speed justify premium costs. A small number of manufacturers have offered to absorb portions of tariff increases through thinner margins or government rebates, but these accommodations are temporary and unreliable as a long-term strategy.
For years, Vietnam was positioned as the China alternative, but it is now facing its own complications. While infrastructure has improved and many factories have scaled successfully, the 46 percent reciprocal tariff rate that took effect in April and the current 29.9 percent tariff rate have largely eliminated Vietnam’s cost advantage. Additionally, many Vietnamese furniture operations still rely on Chinese components and raw materials, creating hidden tariff exposure even when the final assembly happens outside of China.
Diversifying your sources from countries such as Indonesia, Malaysia or Mexico or regions like Central America sounds straightforward. However, it’s far more complex in practice. Not every country has the manufacturing infrastructure to produce hospitality-grade casegoods at scale. Lead times stretch, and quality control systems aren’t always mature. You also can’t easily shift a 200-room casegoods package to a new factory mid-project if tariff policies suddenly change.
The uncomfortable reality is that true supply chain resilience requires relationships, capacity, and lead time that most procurement cycles don’t naturally accommodate.
Project-Level Consequences
You can develop a game plan that can help alleviate the challenges. When it comes to tariffs, it’s important to practice a proactive approach rather than reacting once they hit. Don’t stress about the number, rather the change that comes with it.
Forced value-engineering: Something has to give when budgets can’t absorb the full tariff hit. Owners are downgrading from custom casegoods to catalog options, reducing guestroom fixture counts, or eliminating common area upgrades altogether. These are more than just marginal adjustments; they’re material changes that affect the guest experience and long-term asset value.
Extended timelines and delayed openings: Developers are building additional buffer time into project schedules to account for potential customs delays, tariff-related shipping route changes, or the need to pivot suppliers mid-stream. A renovation that once took 14 weeks from order to installation now requires at least 20 weeks, assuming nothing goes wrong.
The Supreme Court Wild Card
Amid all this operational complexity sits a legal question that could reshape the entire landscape overnight: Does the president have the authority to impose these tariffs?
In November, the United States Supreme Court heard arguments challenging the administration’s use of the International Emergency Economic Powers Act (IEEPA) to impose sweeping tariffs on imports.
Lower courts ruled that IEEPA, a statute designed for financial sanctions during national emergencies, can not authorize broad tariff powers, particularly when Congress has created specific, limited trade authorities elsewhere in federal law.
The constitutional concern is fundamental: tariffs are taxes, and the power to tax belongs to Congress, not the executive branch. If the Court agrees, it could invalidate billions of dollars in currently imposed tariffs, potentially triggering massive refunds to importers and fundamentally altering the trade policy landscape.
What This Means for Hotel Owners
The court is expected to have a decision by mid-2026. If the court strikes down the IEEPA tariffs, owners who paid elevated tariff rates could potentially seek refunds; however, the administrative process would be complex and uncertain. More importantly, the administration would likely pivot to other statutory authorities, such as section 301 of the Trade Act, targeting unfair trade practices, or section 232 of the Trade Expansion Act, to reimpose tariffs, potentially at lower rates or with more procedural constraints.
If the court upholds the tariffs, it cements an expansive new presidential power to adjust trade barriers quickly and un unilaterally, with few congressional checks. This doesn’t make the environment more predictable but rather increases long-term volatility.
The Supreme Court decision represents a wild card that could materially shift FF&E costs with virtually no notice. It’s another variable that owners cannot control but must plan around. This demonstrates the perfect illustration of why uncertainty has become the defining procurement challenge of 2025.
Building Resilience and Diversifying Your Manufacturing
Waiting for policy clarity is not a viable strategy. The owners who will navigate this successfully are those building resilience and flexibility into their procurement approach now.
Partner with flexible suppliers: Single-country sourcing is a vulnerability masquerading as simplicity. The goal isn’t to eliminate Asian manufacturing but rather to avoid total dependence on any one jurisdiction. Work with suppliers that have production capabilities across multiple countries. They can shift if geopolitical conditions change. Rather than a backup plan, it’s important to have parallel capacity established.
Place orders early and lock pricing windows: Owners who can commit designs and place orders 6-9 months before installation, rather than the typical 4-5 months, have more negotiating leverage to lock pricing and secure production slots before tariff environments shift.
Build meaningful contingency into FF&E budgets: Owners are budgeting 15-20 percent contingencies rather than 5 percent, specifically for tariff exposure and related supply chain costs. An unused contingency is infinitely preferable to a project that stalls mid-construction because the budget can’t absorb actual costs.
Consider phased procurement with optionality: For larger projects, consider breaking FF&E procurement into phases with decision points built in. Order long-lead items early and secure pricing, but maintain flexibility on shorter-led categories that could be sourced differently if tariff conditions shift. This requires more active management but can save high costs when policies change mid-cycle.
Recognize that procurement discipline in an uncertain tariff environment looks different than it did five years ago. It means questioning assumptions about country of origin, lead times, and cost structures. It means paying for flexibility you hope you don’t need and building relationships with suppliers who can execute when conditions change.
The hotel industry has successfully navigated plenty of external challenges, such as recessions, pandemics, and labor shortages. This one is different because the uncertainty isn’t temporary: it’s structural. The owners who adapt their planning accordingly, who build resilient procurement strategies rather than hoping for favorable policy winds, will be the ones still developing profitable projects three years from now. The others will still be waiting for clarity that never comes.
Anand Patel is the principal at FF&E and casegoods supplier Eclipse Hospitality.
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