The discourse in this paper is about outsourcing facility management in the hospitality facilities design, management and maintenance. It includes a case study about outsourcing facilities in a national perspective of the hotel industry. Outsourcing facilities management in a business such as a hotel industry is a strategy which moves the tasks, developments, accomplishments and decision responsibilities from a company to its external providers. Outsourcing is carried out through negotiation about a contract where both the hotel company and the retailer or the vendors reach an agreement of conducting the services. The vendor takes the responsibility of hotel production services, management of the staffs, offers quality overhaul or services to the customers and manages the key assets in the hotel industry (Laura, 2011).
Outsourcing facilities management has various achievements in today’s economy. Most companies, such as the hotel industries, use it as a means of a strategic initiative in order to provide quality customer service. This process creates a great reduction of the operational costs in the hotel industry. The company is able to focus on the core business. Meanwhile, it can also generate competitive advantages over other organizations.
Outsourcing is done temporarily or permanently, and it bridges the gap between the staff members, which enable them to learn significant techniques that assist in improving their product design (Laura, 2011). Some of the interesting facts that make most organization outsource their services include operational efficiency, customer satisfaction and the resultant improved quality of the services to the hotel customers. Hotel management today is difficult due to the various risks involved. Some of these risks include lack of resources that are required to run a hotel, difficulties in the maintenance of sufficient qualified team of staff members and insufficient hotel management. This essay focuses on the ways of eliminating these risks through outsourcing the hotel facilities.
The national perspective of outsourcing facilities management in the hotel industry is the best because it avoids most of the negative effects that are involved in outsourcing. National perspective outsourcing is mostly not affected by language barrier problems. Most people in the same country have spoken a common national language. This eases the problem of communication while the vendor is transferring the message to the hotel customers since they both understand one another. If they both speak a different language, most probably the customer will be dissatisfied due to the problem of the language barrier. Outsourcing within a country enables the vendors to reach more customers who would request for almost similar services.
The national perspective of outsourcing a hotel industry is important because of the labour issues. Most of the services are more organized when they are done in their countries than when they are outsourced to different countries. Outsourcing hotel services to nations of fewer standards can negatively affect the workforce response and hence the hotel productivity. Outsourcing in the same nation is advantageous in terms of legal matters (Jones, 2010). Hotel services require management that ensures diligence in legal compliance and organization security. If outsourcing is nationally done, it will not incur the costs of payment of international taxes, and the business is more secure. When researching for outsourcing retailer, the company should think about the specific requirement and get proposals that ensure that the company gets the best value.
Outsourcing of facility management initiative that includes hotel facilities is on the increase. It is mostly driven by top hotel management. In most cases, the top manager is not involved directly in the first stages of outsourcing. Hotel facilities require new management and expertise in vendors so that they can outsource efficiently. The topic of outsourcing facilities management is important to discuss since most businesses today struggle with it. Most of the hotel management lack adequate staff governance which is one of the major negative factors that affect outsourcing (O’Fallon, 2010). It is also an important topic because hotel management needs to provide customized and quality services for the maintenance of good services in the very competing national prices.
Market fluctuations and pressures in the budget, especially in the deteriorating economy in most of the countries today forces most companies to change their operational strategies through outsourcing their facilities (Apollo Sindoori Hotels Limited, 2009). Most hotels make losses due to the increasingly high cost of living. The managing staff seeks services from people who can provide services to the hotel management staff before they are delivered to the customers. In this instance, the management divides the services offered in the hotel into departments. There are those experts who are chosen to offer dining services which are different from those providing managerial services and those in the cooking section. The team that is providing the service of inviting the customers to the hotel promises is also different.
Such division of labour to different experts ensures that every service is met and it is in the best way provided to the customer. The hotel expert is able to bargain with the customer about the cost of a particular item in the hotel, and as a result of that, the vendor converts the fixed cost to variable cost of the items (Oxbridge Writers, 2010). This encourages that buyer who later becomes a regular customer due to better attraction by the service providers.
Physical services in the hotel require excellent repair in their function and in the way that customers will notice them. Vendors make sure that they are outsourcing hotel facilities by maintaining excellent conditions of the hotel location as they manage the services. They offer comfort and preventative measure to the customers. Hotel companies reach the formal design of governance after the implementation step. Effective governance is normally critical to the success of the hotel services that are being outsourced (Oxbridge Writers, 2010).
It is important to have knowledge of outsourcing facilities in the management of a hotel. This is because it involves the creation of widespread national linkage of services and a trusted team of workers. These vendors are now experts in their work in terms of diverse capabilities and therefore the hotel customers rely on them to deliver their expertise. Tourism managers should make efforts in order to get familiar with this topic so that they get information on how to advance in business. They get acquainted with quality information on how to display their experience on how to outsource facilities for better management. Future managers also get conversant with standard menus and the most appropriate procedures that can be used to run hotel business nationwide. The most important lesson is the knowledge on how to make decisions. They make wise decision as they use their experience on how to come up with developmental strategies in hotel business.
Hotels in most of the countries run their services in 24 hours in the whole year. This requires the right maintenance of the services which are important in order to meet expectations of the customer. The management tries anything possible to make profit. Some hotels launch different branches in different parts of the country with affordable luxuries to the customers. The success of the hotel business is built in a manner that invents extra sources of services of the hotel company with its expertise. They seek for better services through consulting experts and specialists or organizations that can provide better services. The services that are provided by specialists are reputable and enable the survival of the hotel business.
Most hotels sometimes back were faced by challenges in their operation about their subsidiaries or companies that were using computers to run their business. Every hotel that was run in a national perspective had its finance system. This integrated back office system in the hotel headquarters and its fellow companies system making it excessively complex and exorbitant. Another challenge was the increasing requirement of a form of communication that was more efficient between the hotel branches in the country. Efficient communication about prices, local revenues and forecasts was very essential for the growth of the hotel industry (Laura, 2011).
This drove most hotels to start building a project on how to frame the business using IT architecture that has capabilities of integrating and Microsoft net that would ensure the use of programming and commands. Through this, every hotel in the country controls its price and its allocation strategies in its inventories. This gives the hotel management a chance to make adjustment of the system basing on needs of the customers. It also allows the management to access the local revenue updates in the country online and at any particular time. Use of computers enables most businesses that include hotel industry to link to booking online which is commonly referred as the e-booking (Outsourcing Center, 2012). This permits the hotels to put their prices online depending on the revenue in the country. This makes every hotel benefit from national booking by the customers.
These hotels that are run in the whole nation have a common parallel website, but every hotel has its own site. All these allow customers to get information and pictures about every hotel and make online arrangements. Nevertheless, some hotels have not made online payment systems, but have intentions of doing so as it reduces transaction costs and also saves commissions to especially travel agencies. Pricing reactions begin when every hotel change its prices according to the system of revenue management. Every hotel in the country reacts in accordance with the customer needs as every hotel can adjust the prices through the IT system despite the big national chain of hotel and team of different staff members involved.
One major issue about outsourcing of hotel services is the possibility of delivery of services to customers online. As some of the services to the customers are not online especially those that need the participation of the customer, there are those that can be delivered. In this instance, services such as booking of hotel rooms, obtaining airline tickets, radical car rental or a full travel package, all these are possible online. Hotel customers have got easier ways of enquiring, checking and ordering in a more convenient way of communication through the internet in the whole nation (Redding, 2009). Hotels are corporate representations which have become largest players in business industry.
Most of the groups that use online hotel booking services are business travelers who in spend most of their time travelling. As they target their great deals, they control their travel processes by booking online and claiming that they do so at cheaper costs as compared to other methods of booking such as the use of agents or phones. For example, there are those who spent at least 200 dollars to book a hotel room per night in New York (Jones, 2010).
Hotel industry is aware of outsourcing its facilities for better management and it is wholly enthusiasm to sharing of this effort. The industry used to consider online booking as a means of picking additional businesses that made hotel management to over-control that inventory with its pricing but now it has agreed to even take the restraints after the establishment of the early shopping designs. Almost every hotel that has outsourced its facilities nationally has developed its website where there can be bargaining customers that book rooms online. 50% of the nationally outsourced hotel managements earn double the profit they used to get before outsourcing online (Outsourcing Management Services, LLC, 2011). The industry also attempts to make changes to the early agreements into those of online travel agency. Hotels used to make roomsavailable to the travel agencies at wholesale prices. The agencies marked up these rates by 15-30% before they peddled them at fixed rates for a given time to the new model that enable hotel management to have total control of the rooms (Outsourcing Management Services, LLC, 2011).
Outsourcing of hotel facilities and management involves partnering with vendors who provide services in order to attain business benefits; aid improved working conditions and increase trust between the hotel management and the specialists. Improved relationship between the vendors and the customers is also enhanced however integration is much better than partnering (Morgan, 2012). This is because integration enables the company to get assurance of attaining its objective, goals and act according to its philosophies as failure to do that leads to adverse effects that are reflected to the customers.
This essay explores the topic of outsourcing facilities management of hotels. It begins at giving the meaning of outsourcing of facilities. It outlines the content of the case study that focuses on outsourcing hotel facilities at a national perspective. Achievement of outsourcing facilities management is that this service is normally done by many businesses to reduce expenditure cost. The essay outlines the most probable reasons as to why most hotels outsource their services nationally. It gives advantages of a national perspective over international perspective. The major national perspective outsourcing advantage is that hotels do not pay legal payments such as international taxes as they carry out their services. These reasons are followed by risks and advantages of outsourcing in general.
This is followed by reasons as to why the process of outsourcing facility management in most industries that include hotel services are at the increase. The major reasons are fluctuations in the market that have brought diverged changes in market demand and supply. In particular, the essay focuses on why most hotels outsource their services. Another reason is due to the failing economy globally. Such economy pushes hotel industries to pursue their services from other organization that are ready to bring more profitable services and that would meet the demanding needs of the customers. It also outlines the benefits that future tourism managers can get out of outsourcing. The major benefit is the experience of the ways of advancing in business and they advance in business management skills. They also become familiar with the major challenges involved in outsourcing.
The essay continues to explore the challenges that encourage management in most businesses to outsource their services. The major challenge encountered by hotel businesses while outsourcing is communication. Online services via the internet ease the problem of passing information as businesses are outsourcing their services. One of the major services that are done online is booking of hotel rooms and services which are commonly known as e-booking.
Outsourcing facilities management in most countries is a diverse profession that aims at providing brilliant environment that fits the purpose they have been designed to accomplish. For outsourcing of hotel facilities, total Excellency or quality approaches are expected that sustain operating environment that supports hotel services that meet strategic needs in the company (Morgan, 2012). Management of hotel facilities contributes to its performance in various ways that include culture in hotel management, strategy of controlling the operations, delivery and supply services. Performance measurement in the hotel facilities management is not well established or standard. Historically, the approach of performance measurement tended to put a lot of concentrations on financial cases then it broadenedit into emphasis about the satisfaction of the customer. It focused on the latter because it noticed that financial measures were inadequate due to lack of satisfying customer services.
The cost of hotel operations and market competition has pushed the management in the hotels to identify ways to develop their business and attain customer demands. The ways and means are meant to intensify the profits of hotel industry and reduce operational cost. Outsourcing facilities and management of the hotel industry is the most common wayused. This enables hotels to improve financial conditions through selling to the right customer, at the appropriate price and time. Most hotels have succeeded in the implementation of revenue system that is electronically managed therefore tying with electronically managed hotel operations (NetScape, 2010). This has made remarkable improvement in hotel market performance easing the ability to foresee the emerging trends and developments in the market. Through linking hotel services and revenue updates, most hotels develop forecasts that enable them to optimize their sales, strategies of deciding prices and allowances. The management in the headquarter hotel has opportunity to follow very closely to the development in the market and adjust the sales according to the changes in the demand and supply rule.
Hotels that operate online save the cost of commission for most customers that include travel agents through booking directly to the hotel of choice. Meanwhile, this e-booking is traceable by the in-house financial system that saves transaction costs and time. Outsourcing specialists provide special services that hotels cannot provide internally. Every specialist exercises his expertise and is capable of responding to the changes that are raised by the customers. The vendors major in the departments that they are well aware of and this enables the company to make considerable profits.
Apollo Sindoori Hotels Limited. (2009). Hospitality Outsourcing Services. Apollo Sindoori Hotels, 6(2), 26-34.
Jones, C. (2010). Facilities management in medium-sized UK hotels. Emerald Research. Web.
Laura. (2011). Outsourcing of Business. HotelMule, 12(4), 50-52.
Morgan, S. J. (2012). The Human Side of Outsourcing: Psychological Theory and Management Practice. New York: John Wiley & Sons.
NetScape. (2010). Facilities management. Dmoz. Web.
O’Fallon, M. J. (2010). Hotel Management and Operations. New York: John Wiley & Sons.
Outsourcing Center. (2012). Facilities Managgement.Outsourcing Alert. Web.
Outsourcing Management Services, LLC. (2011). Ensuring outsourcing success.Outsourcing Management services. Web.
Oxbridge Writers. (2010). Outsourcing Within Hotel Industry. Oxbridge Writers. Web.
Redding, M. (2009). Managing Risk in Facility Management Outsourcing. Mc Marrow Report. Web.