Outsourcing in Hotel Advantages and Disadvantages
Below are some of the services which is most commonly outsourced by the hotel
- Laundry
- Pool maintenance
- SPA and Health Club
- Saloon
- Housekeeping
- Equipment maintenance
- PR and marketing
- Revenue management
- Information technology
- Reservations / Call Centre / Central Reservations
- Project management
- Loyalty programme management
- Online Distribution management
Advantages Of Outsourcing:
- Outsource non-core activities and spend more time concentrating on the core business processes.
- Offshoring gives the business access to professional, expert and high-quality services.
- The organization can experience increased efficiency and productivity in non-core business processes.
- The company can streamline its business operations.
- Offshore outsourcing can help the business save on time, effort, manpower, operating costs and training costs, giving it overall cost advantage.
- Outsourcing can make the organization more flexible to change.
- Experience increased control of the business.
- Save on investing in the latest technology, software and infrastructure and let the outsourcing partner handle the entire infrastructure.
- Get the assurance that the business processes are being carried out efficiently, proficiently and within fast turnaround time.
- Offshoring can help the organization save on capital expenditures.
- By outsourcing, the company can save on team management problems as its offshore partner will be managing the team who does the work.
- Cater to the new and challenging demands of the business’s customers.
- Free up the cash flow of the company.
- Share the business risks.
- Give the business a competitive advantage – increase productivity in all the areas of the business.
- Outsourcing can help the organisation cut its operational costs by 50% if not more.
Disadvantages Of Outsourcing:
- While outsourcing services such as payroll processing services and tax preparation services, the outsourcing provider will be able to see the company’s confidential information and hence there is a threat to security and confidentiality in outsourcing.
- When a company begins to outsource its business processes, it might find it difficult to manage the offshore provider when compared to managing processes within its organisation.
- Offshoring can create potential redundancies for the organisation and the employees might express lack of interest or lack of quality at work.
- The outsourcing provider might not be providing services only for one particular organization.
- Since the provider might be catering to the needs of several companies, they will not be able to give a particular company 100% attention.
- Outsourcing, though cost-effective, might have hidden costs, such as the legal costs incurred while signing a contract between companies.
- The company might also have to spend a lot of time and effort in getting the contract signed.
- With outsourcing, the organisation might suffer from a lack of customer focus.
- There can be several disadvantages, such as renewing contracts, misunderstanding of the contract, lack of communication, poor quality and delayed services amongst others.