Outsourcing is a crucial factor in running a business. It is the process of delegating tasks to several out-house service providers to handle various operations in the business. In the hotels and tourism sector, it is very common to find that the building or the land is being outsourced or rented by an external supplier. Companies rely on outsourcing primarily to cope with the complex dynamic environment of the business world and to leverage the human resources specializing in individual sectors of operations. This has become highly relevant in both large scale and small businesses to enhance the service sector where external service providers are better trained and equipped to perform certain tasks (Jensia, 2008). Hence, this essay will highlight the benefits and problems faced by hoteliers in the short run and long run from an economic perspective. Businesses turn to outsourcing to reduce costs, improve the quality of service provided and enhance efficiency. By outsourcing firms to undertake non-core functions of the hotel, the efficiency and profitability of the business can increase substantially. Outsourcing firms provides hotel managers a short term cost advantage by saving time, human resources and training costs. The external service suppliers have their own staff with various different areas of expertise and equipment needed to carry out a given task. Once firms are outsourced, they are responsible for the quality and service they provide to their customers. Moreover, the out-house suppliers are required to develop, maintain and upgrade their systems in order to promote efficiency and productivity. Since these duties are taken up by the external service suppliers it fundamentally translates to less management worries for... ... middle of paper ... ...costs are staff training, recruitment of staff and hourly wages. Works Cited Jensia, I. (2008). Advantages and disadvantages of outsourcing. Retrieved from http://voices.yahoo.com/advantages-disadvantages-outsourcing-1921370.html Reiss, B. (2010). Outsourcing Turns Fixed Costs into Variable Costs. Retrieved from http://www.entrepreneur.com/article/217487 Hudson, K. (2010). Luxury Chain Cuts the Flowers, Sends Out Wash at Some Hotels. Retrieved from http://online.wsj.com/news/articles/SB10001424052748704366504575278450170941876. Sani, A., Dezdar, S. & Ainin, S. (2013). Outsourcing Patterns among Malaysian Hotels. International Journal of Business and Social Science, 4 (9), p. 134-142. Retrieved from http://ijbssnet.com/journals/Vol_4_No_9_August_2013/13.pdf. The Economist. (2009). Outsourcing as you sleep. Retrieved from: http://www.economist.com/node/13145889.
Outsourcing simply means acquiring services from an external organization instead of using internal resources (Butler, 2000). By using outsourced resources, organizations can gain a competitive advantage by utilizing contingent staff to accomplish strategic goals without incurring the fixed overhead. By focusing on the leading edge and highly specialized skill sets, outsourcing providers can often offer higher quality services, or at a lower price than the client organization. Typical reasons for outsourcing go beyond simple contingent staffing. Outsourcing providers are able to maintain economies of scale with regard to specialization (...
Recently outsourcing has been in the news, especially during political election years. It seems to be a phenomenon that is causing much concern among the population. But exactly how is outsourcing effecting both workers and businesses? And is it as big of a problem as politicians describe?
Offshoring the management of customer relationships not only enable business growth but also lowers operational expenses and associated labor costs contributing towards the financial savings of the company. The biggest benefit of outsourcing is that it comes at a contracted price and a predictable cost because the outsourcer or the client can utilize the best talent and expertise in a highly specialized area of the outsourcing service provider while need not bother to carry them on the firm’s
The proponents of contracting out assume that outsourcing in the IT sector is useful in strategic, technological, and economic reasons. (Gonzalez, Gasco & Llopis, 2009) They believe that outsourcing enables an organization to get the same or better services with lower cost. First, strategic advantages enable organizations to refocus on strategic and core functions, and provide flexibility for organizations because organizations need not to concern about routine tasks (Gonzalez, Gasco & Llopis, 2009). OPPGA (1998) also support these strategic advantages. It asserts that outsourcing can provide organizations with great flexibility in personnel and facilities in short-term projects. Outsourcing providers can provide better services for clients since they usually use new and developed technologies. Second, proponents think that outsourcing gives organizations opportunities to access to technology and reduce technological obsolescence without large investments (Gonzalez, Gasco & Llopis, 2009). Lastly, Pros assume that contracting out can save s...
Lim, W., & Tan, S. (2010). Outsourcing suppliers as downstream competitors: Biting the hand that feeds. European Journal of Operational Research, 203(2), 360-369. doi:10.1016/j.ejor.2009.08.006.
Kesavan, R., Mascarenhas, O. A., & Bernacchi, M. D. (2013). Outsourcing Services to India: A Review and New Evidences. International Management Review, 36-44.
Hilton Worldwide carries out business through three segments: (1) management and franchise; (2) ownership; and (3) time-share. These business segments enable management to capitalize on strengths like brand recognition and economies of scale. The company focuses primarily on the management and franchise segment which consist of 3,918 hotels with 610,413 rooms. Managing the properties, rather than owning them, allows the company t...
The hotel industry performs within a saturated market, driven by customer loyalty and competitive pricing to stand-out. This competitive nature makes it extremely important to capitalise on strengths while improving on
Outsourcing is a technique for companies to reassign specific responsibilities to external entities. There are several motivations for outsourcing including organizational, improvement, cost, and revenue advantages (Ghodeswar & Vaidyanathan, 2008).
...urcing services, the company operation will be became a mess. This is because one organization can’t run a lot of task or project at one time. Therefore an organization need outsourcing in the way to help their organization run smoothly.
Thanks to these factors, pricing becomes one of the primary uses with which hotels attract customers. However, due to customers’ independent nature, there influence over industry players is limited. In the high-end segment of hotels, price influence becomes even less as hotels find it easier to differentiate themselves from the competition and customers become less price sensitive coming to expect higher prices as a symbolism of superior quality and services. Lastly, corporate business and tour operators can exert more influence due to their large purchases but this affect is of a limited nature and does not extend across the whole
The Hotel industry has become very important in the past years due to immense traveling and growth of international business. Hotel industry not only plays an important role in the life of people but as well as the economy of the country. Development and advancement in the Hotel industry have rapidly been taking place and especially since the rapid change in technology, it is very important for hotels to be promptly keeping up to date. When the hotel industry is spoken of, there are many famous hotels but one hotel company that has been outstanding in growth and other aspects of business, like in Leadership, Teamwork (Employee turnover), Motivation (Customer retention and satisfaction, Goals and objectives, (changing the way hotel business has worked), and Change within the company; structurally inside and physically outside, adding elements, like entertainment, gaming, and outdoor activities, is the Hilton Hotel Company.
The hotel industry is by far one of the biggest business industries known to man in this era. The businesses of this industry are affected by many factors. The businesses environmental factors in external factors are demographic, economic, global, political, sociocultural and technological.
The pricing factor is almost hard to match by the hotel industry, as the consumer is becoming more demanding but also exigent in terms of low pricing. Switching costs range from negligible to high, but a factor that motels can’t substitute are the various benefits including spas, restaurants, or a community holiday feel brought with the package of any chosen hotel/motel. But the consumers in the US, for example, see the switch as more of a necessity rather than a choice, this puts them in an affluent position and the threat from substitutes is likely to diminish. The solution then lies in expansion where mitigation usually takes place, and therefore in turn threatens the substitutes by expanding in the new low cost and service field. Some of these low-cost hospitality choices have expanded thanks to technology and brought to life a new era of cost comparison.
The Hotel industry has become very important in the past years due to immense traveling and growth of international business. The Hotel industry not only plays an important role in the life of people but as well as the economy of the country. I spent an hour of my day relaxing in the lobby at the Fontainebleau resort in Miami, while on vacation with my family visiting from out of state. It was my first time staying at the resort so I was eager to check it out, after seeing such great reviews on Yelp and hearing great things from friends who have been there in the past. The employees working at the resort were very welcoming, professional and willing to go above and beyond to help their guests. The check-in process was very quick due to having