Outsourcing WITHIN THE Hotel Industry Business Essay

Chapter 1

1. 1 Introduction

Outsourcing is the opportunity for the business in hospitality industry plus some others industry as well which can offer service and product for the coffee lover and can enhance their success without producing things are internally. For example Hotels can outsource their food and beverage, marketing process, HR process etc. , using their company outsource specialist. By outsourcing businesses can have more opportunity in the market to run their business in a better way. Becouse it could be really risk free and more productive in conditions of the flexibility and availability. Corresponding to Good and Shaw (1997) abstract, outsourcing can be defined as the process of acquiring something that the company cannot produce internally. It engages delegating or replacementing an internal service or role with an external service which is provided by experts who are skilful in the condition of that service appropriately.

In one other way outsourcing is the way to operate a business with less management and procedure risk and within a period frame. It can increase the success within the organization and can boost the brand image in conditions of better service and efficiency. Since when firms prefer the outsource somewhat than doing things by won they can get some more option and even more trust and less risk which will make their service more effective and profitable.

1. 2 Problem Statement

In the new global overall economy, outsourcing has becoming a central concern among expert in the hotel industry. Outsourcing is a way, which includes been designed by various companies to provide various services to customers and employees. Another person, from an external resource, implements outsoaring. By using this method, it can help the company to lessen cost. Most companies use outsourcing/third party for better efficiency. Founded company use this method to improve their service quality. Freelancing provides specialised functions to help complete the task. In fact, many hotels are opting for the outsourcing business strategy to help the hotel business in maintaining their rival hotel and the same time cut on their cost.

In the research paper it mentioned that the benefit of hotels outsourcing of HR and Marketing section. So, the condition statement is

To what extant hotels are benefited by doing outsourcing -a review on Holiday Inn hotel.

In the study work, the researcher must have very clear knowledge of the topic or problem they are investigating. Without clear and sufficient theoretical knowledge it will become difficult to conduct any research work. For my research subject it is important to acquire theoretical knowledge about the functions of outsourcing in order to analyse the significance, impact and potential customers of outsourcing.

This research work could not be completed properly without collecting data and gathering information properly and with them appropriately. A whole lot of text catalogs, reference books, publications and information were consulted to get ready this research work in line of the aim and targets of the research work. The main activity was to get the principal data from the management team of Holiday break Inn Hotel.

1. 3 Research Question

It's absolutely essential to develop a research question that I enthusiastic about or value in order to focus my research and my newspaper. This study is set up to answer following research question

To do outsourcing is a good idea for hotel business?

Is Outsourcing more effective than doing things by own?

How outsourcing can provide some extra advantage for the business?

How outsourcing can decrease the cost and risk for the organization?

What are the primary known reasons for outsourcing HR and Marketing process?

How outsourcing has favorably contributed to the financial position of the hotel?

How correctly carried out outsourcing can boost the hotel's competitiveness?

1. 4 Value/scope of the research

This research can help individuals, especially decision-makers and organizers, as well as businesses identify the many components of outsourcing that may bring many potential benefits, such as cost decrease, performance improvement, overall flexibility, specialisation, and usage of innovation on the business of hotels by utilising it. It is a fact that a lot of companies are in under pressure to take up outsourcing as a major competition. The Hotel Industry is one of the thriving businesses on the globe. Actually, in this globalised world many hotels are deciding on the outsourcing business strategy to help the hotel business in keeping up with their rival hotels and at the same time cut on their cost.

For this case study I want to try to find out from what degree the hotels can benefit from outsourcing techniques their HR process and Marketing process from the analysis of Getaway Inn hotel in Brentwood, UK.

There are two types of outsourcing which is integrated in the hotel industry. This consists of selective outsourcing and complete outsourcing. Selective outsourcing concerns certain functions that happen to be chosen for outsourcing, which can be the repository of customers or accounts details of the hotel and etc. On the other hand, complete outsourcing identifies the whole function which is outsourced. Though hotels are recognising the importance of outsourcing, this does not imply that this business strategy does apply to all or any.

Outsourcing can be viewed as the procedure whereby activities traditionally carried out internally is contracted out to external providers. Outsourcing has turned into a significant element of modern hotel management. As the market for outsourcing grows, it will have a dramatic impact how businesses are organised, managed and viewed by owners, employees, and customers. In spite of fairly extensive coverage directed at hotel outsourcing management issues, there's been limited educational research in this area. Besides, no specific accounting centered studies worried about hotel outsourcing have been found in the books.

1. 5 Research Objectives

The purpose of this research work is to examine and assess the effectiveness of outsourcing of the hotel.

The main aim of the research is to look at and discuss the impact the outsourcing of the hotel and its effect on cost and benefits. This research work also aspires to offer an understanding of how important the outsourcing is to improve the efficiency of the hotel.

Outsourcing provides significant implications for a hotel's cost structure and control strategies. In light of this, it's important that hotel accountants are properly equipped to experiment with an active role in outsourcing decision-making and control. The aim of this research is to give a management accounting point of view on issues encircling hotel outsourcing management. This work outlines the many costs and benefits that needs to be considered when deciding whether to outsource.

The goals are as follows

To criticallydiscuss the effect and effect the outsourcing of the hotel on business performance.

To study about how precisely does indeed outsourcing is maintained by the hotel.

To discuss and identify critically how it can help cut costs while controlling outsourcing.

To discuss about how exactly it help contend with other hotels in order to spend less and earn profits for the hotel.

1. 6 Honest Issues

In setting up my research study it is important that I need to consider with the moral conditions that will arise after i was collecting data and trying to make communication with people. I also consider seriously the individuals rights and wrong of what I might be undertaking and the moral values and key points that guide my activities.

I've done my communication section very plainly and sincerely for the understanding of the type and reasons for my research, whom it could benefit and how, and what costs or

risks are participating for informants.

I respect peoples even they are not cooperate with me at night, or

pull out from the project.

I also tried out to avoid, or at least acquire some ladder to reduce, pointless

Destruction, risk or false to the collection of people I was learning and

working with them as well as sourcing shame to them.

I tried out to safeguard the individuality of respondents where essential and

treat them with respect.

For the privateness I did not allowed any third gatherings access to very sensitive information I

may have obtain.

Regarding the confidentiality it was totally in memory space contracts with the person, the group, or an company, about what may be done with the data.

About the anonymity I could supply the certainty that there was a require of identifiers vis- -vis information that fundamentally show which individuals or organisations provided which data.

Consideration of the above issues clearly I could take it very critically when I need to handle the responsive information.

1. 7 Hypotheses

Successful implementation of outsourcing can lead to enhanced brand acceptance and profitable for the hotels.

Outsourcing can reduce cost and risk and can give some better feedback for the business.

Outsourcing can boost hotels competitiveness

Outsourcing can be considered a positive contribution for the financial position of the hotel

Chapter 2

2. 0 Literature review

2. 1 Advantages of Literature review

2. 2 Outsourcing

Contract with two company some may be outsource company and a different one is outsource holder. almost all of the best companies currently choose the outsource process because of their different type of service, such as call canter services, food and drink outlet-mail services, recruitment process, Marketing and HR process. Those handling can be deal with by the supplier and outsource holders can trust them fully because outsourcing providers basically more careful and aware regarding their obligations.

Knowles and also Davis. Lockwood, Pantelidis and Alcott (2008) define contract catering and food services management as functions that provide meals in shops that do not have the provision to create them. In addition Coates (1971 cited by Wilson, Murray, Black colored and McDowell 1998:74) define a deal caterer as

"A person or company, who in reputation of financial praise, will undertake to administer, control and immediate a specified wedding caterers operation within the guidelines stipulated by the [client] company. "

2. 3 Reasons of outsourcing

Although the key purpose of outsourcing is often cost reduction, many companies fail to realize any cost benefits. Specifically, Gartner is predicting that by 2007, 80% of organizations that outsource customer service projects with the primary goal of trimming costs, will are unsuccessful in that try out. Part of the reasoning behind this statistic is the high staff attrition rates at outsourcing companies, sometimes as high as 80% to 100%. Combine this added cost from attrition combined with the invisible costs of consumer loss scheduled to increased stress and it's really clear an outsourcing proposal, if not careful monitored, can easily fail.

Among the tons of reason of freelancing some key reasons are flexibility, cost reducing, supply, good quality etc. Those factors are influencing the organizations of hospitality industry to go for outsourcing. It could reduce the risk management for the particular corporation as well. Another important reason for outsourcing is the time convenience in terms of quick service.

Outsourcing can be an important occurrence in hotel sector. It is changing from a tactical to a proper perspective, with higher opportunity and relevance to the creation of competitive advantages. The checking of hotels to outsourcing and strategic alliances improves specific competitiveness, but also offers strong repercussions on locations, especially those in a level of maturity and demanding new approaches to improve competitiveness. This change in inter organizational interactions to a proper point of view requires new theoretical and practical frameworks to make it easier for hotels to outsource their operations with greater prospect of competitive benefits.

2. 4 Outsourcing and organizational performance

Outsourcing is of interest to older management since it improves a few of the

Dimensions of organizational performance (Lilly et al. , 2005). Based on the study, conducted by Accenture and the Economist Cleverness Product, two-thirds of the respondents - most of whom have been outsourcing a significant business process for at least 2 yrs - decided that outsourcers who know how to manage the procedure can boost their company's performance and achieve a high degree of satisfaction with the results (Lacey and Blumberg, 2005). Gilley and Rasheed (2000) proposed that organizational performance in hotels improves for three reasons. First, an increased focus on a firm's primary competencies can be an important profit associated with outsourcing (Dess et al. , 1995; Gilley and Rasheed,

2000; Kotabe and Murray, 1990; Venkatraman, 1997). The evolving books on main competencies has been concerned with the "make-or-buy" decision that every firm encounters. Should a hotel run its restaurant, clean its rooms and common areas, and trim its own trees and shrubs, or should it outsource these tasks to vendors that specialise in catering, janitorial services and grounds keeping (Espino-Rodr±guez and Padron-Robaina, 2005; Taylor, 2005; Walker and Weber, 1987)? Ronald Coase (1937) first tackled this question 70 years ago in a vintage article. His broad argument was comparable to Adam Smith's: if another party can do the task more proficiently and inexpensively than can the organization itself, then the outside party ought to do it: if the firm's employees can do the job better, then the work ought to remain in-house (Bahli, 2002; Espino-Rodr±guez and Padron-Robaina, 2005; Taylor, 2005).

2. 5 Bottom line of literature review

There are lots of studies that concentrate on explaining the effect of outsourcing. Abraham and Taylor (1996) discover that firms "contract out" services with the objectives of smoothing development cycles and profiting from specialisation. Raa and Wolff (2001) find a positive association between your rate of outsourcing and output expansion (Jiang and Qureshi, 2006). Elmuti (2003) also provided support for empirical facts for an outsourcing-productivity romantic relationship. He discovered that outsourcing accounted for approximately 40 % of the variance in efficiency.

Many outsourcing studies in hospitality industry question advantages and disadvantages builder wedding caterers and food service management operations. This research critically discuses to what extent hotels can reap the benefits of outsourcing their food and drink procedure. A hotel may reap the benefits of outsourcing techniques their Food and drink facility because professionals can give attention to their main competency. Also, it brings to the hotels exterior suppliers investment and with it innovation at bare minimum financial risk. Because of this reasons hotels are likely to gain better competitive advantages.

Chapter 3

3. 0 Methodology

3. 1 The type of study

In light of the significant international literature talking about hotel outsourcing, it would appear that outsourcing in hotels is relatively limited. Like there are some key portions for outsourcing for the hotel Industry those are HR process, marketing and pay roll.

3. 2 Way to obtain Data and Data Collection Procedure

The research has been conducted with main data. For the principal data collection process I used the qualitative particular date collection process which is interview platform. For my analysis I chose framework interview and well prepared a set of question. Based on my question I have done my interview through requesting question step by step which helped me to get consequence very clearly.

3. 3 Population and Test Size of the Study

Holiday Inn is the UK's most significant and fastest-growing hotel brand with over 580 budget hotels and more than 40, 000 rooms over the UK and Ireland And from most of them my research area is Holiday break Inn Brentwood, UK, were regarded as the population for this study. From your management team 8 to 10 were preferred as the respondents for collecting the info for my research.

The replies of the respondents interviewed were analysed to get insights into qualitative aspects of the outsourcing activities employed by their companies. Qualitative research of the gathered data from the respondents' companies has been made.

3. 4 Interview Question

The research data were accumulated using Interview Question. At first a request notice were e-mailed to all or any the operation management team of the vacation Inn Hotel, a population greater than 8 associates in total. In all, 3 reactions were received, representing a response rate of over 40%. And lastly got the session for the interview with the Procedure Manager of Vacation Inn Hotel and two of the members from other management team. Non-response bias may also possibly have affected the results.

Respondents were asked to answer their question step-by-step. interview question was divided into three portions, each of which is detailed below. A copy of the questionnaire is included as Appendix 2.

Interview with Procedure Manager

It was a in person interview and the period of time was one hour. There was a sample question which contains 3 sections. All regarding outsourcing of Holiday break Inn hotel. First section was regarding outsourcing functions and benefits; second section was regarding the suppliers and quality of outsourcing and the 3rd section was the view area of the respondent.

Interview with the management team members

It was also a face to face group interview with two management team members. It had been more than 30 munities debate and was a very effective treatment for my research.


The interviews were in Holiday Inn Brentwood M25, Jct. 28, and Brook Streets, Brentwood, CM14 5NF UK.

Other details

The research was conducted between 5th December and 6th Dec 2010. Respondant was Ujjal Chwdhury the procedure Director, Ashfaq Khan and Azaz Bhimani the management associates. The researcher is Farhana Sorker.

4. 0 Finding and Analysis

4. 1 Backdrop of the organization

The first Getaway Inn opened up in Memphis, Tennessee in 1952. The chain was proven to provide inexpensive accommodations for individuals and travelers within the US. It was acquired by the Intercontinental Hotels Group (IGH) in 1990.

In Oct 2007, IHG released a worldwide relaunch of the Holiday Inn brand including a redesigned "welcome experience" along with personal home bedding and bathroom products.

Included within the vacation Inn brand is Trip Inn Express, a mid-priced chain of "express" hotels which focuses on value and convenience for business travelers who don't require more than the most standard amenities.

4. 1. 1 Brand Image of Vacation Inn Hotel

One of the world's most recognized hotel brands with a global reputation for service, comfort and value. Holiday Inn offer today's business and leisure tourists' dependability, friendly service and modern attractive facilities at a great value and at convenient locations throughout the world. Since 1952 Getaway Inn Hotels have provided the services business traveller's need, while also offering leisure travelers a comfortable, everyday atmosphere where they can relax. And now, a global relaunch of the Holiday Inn brand family is in its final stages and is also expected to be complete by the end of 2010. The relaunch will improve quality and service levels, and drive reliability, creating a new, more contemporary brand image by any means Holiday break Inn hotels surrounding the world.

4. 2 Summation of findings

4. 2. 1 Outsourcing Function in Holiday Inn Hotel

Holiday Inn Hotel dealing with Hcareers to outsource their recruitment process which is actually doing work for their labor force. Hcareers employ a good image on the market as a outsource company. And they're providing the accurate one in the appropriate place for theorganization. Presently Hcareers working their business among three countries, those are US which is Hcareers. com, Canada which is Hcareer. ca and Hcareers. co. uk in UK. And all are working for the hospitality related company. Who are looking for the work in the hospitality sector they can go and start the page and can apply over their.

Hcareers trying to provide more flexible system for the work seeker. According to the operation director of Getaway Inn Hotel it is clear they are really happy with Hcareers service and they're getting the right person in the right place for his or her organization.

Also they are working with caters. com because of their outsourcing

And because of their marketing process they are employing HS company and getting all the services for their advertising process.

4. 2. 2 Benefits of Outsourcing

Outsourcing is the exercise of getting service from external firms to maintain work usually performed within an organization that can be a familiar theory. Holiday Inn presently outsources their recruitment control and marketing as well.

Most of corporation do not concern about the benefits associated with outsourcing. Freelancing can reduce cost and spend less, that can be a big reason to visit for outsourcing but there are a few more reason as well. outsourcing can reduce the management risk for the organization and can provide a financial support as well. Overall flexibility and option of service or product can be an good example as well. And Trip Inn is one of the firms getting the following advantages from the outsourcing.

Control capital costs: lowering cost for the organization isn't only the good point to outsourcing but also it is a really major factor. Outsourcing techniques exchange fixed expenses into changeable expenses, which will make complimentary possessions for savings somewhere else in their industry, and allows them to remain from huge expenditures in the first phases of the business. Outsourcing techniques also makes their firm more attractive for the shareholders, since they are able to drive extra belongings in a direct collection into revenue-producing performance.

Increase efficiency: Doing everything by own the firms need to check out even more investigate, expansion, promotion, and delivery fee. That's why Holiday break Inn chooses to do the outsourcing process. By outsourcing they are getting more efficiency in their business.

Reduce labour costs. Keeping the HR office by own can be very costly for a business, and its own also been told to get feedback on right time by the temporary employees. In order that Hiloday Inn dealing with Hcarear and caters. com and this Outsourcing by which they can focus their human resources where they require them mainly.

Start new assignments quickly. Vacation Inn getting the best service and facilities using their company outsourcing firms. Due to the flexibility, efficiency and availableness they can start a new task within a very short time and can have the services from their outsource providers as their need.

Focus on your main business. All business has limited capital, and all managers has inadequate time and amount which is not different for Trip Inn. Outsourcing assisting them for their business to move its center point from tangential performance toward work that hand out the customers outsourcing helpful for managers to place their precedence's extra evidently.

Reduce risk. All business has some risk plus they have to handle it when they operate their business. Almost everything can change very quickly nowadays. Outsourcing providers take for granted and manage this risk for the Holiday Inn Hotel, which normally a sizable amount better for come to a decision how to prevent risk in their section of proficiency.

4. 2. 3 Suppliers

Hcareer and caters. com and HS company will be the outsource suppliers for Holiday break Inn Hotel. Hcareer and Caters. com is for his or her recruitment process and HS Company is good for Marketing strategy.

4. 2. 4 Quality maintain by outsourcing

The Product Standards & Quality Requirements ("PSQR''), The best goal of

The PSQR is to do something as a central indicate assemble, share and check critical information related to the merchandise. The Product Specification (PS) details the product's expenses of materials, packaging and other physical components and their assembly or relationship collectively. THE PRODUCT QUALITY Requirements (QR) details what's expected from the merchandise in conditions of appearance, craftsmanship, performance, testing and packaging. Jointly they form the complete PSQR, which becomes a manipulated file, and becomes the marching orders for the product quality Team at the outsourced manufacturer's center to notice that the product produced and transported is the same as everything discussed and complete in the PSQR. Typically, the introduction of the PSQR is a cumulative and additive process with a concentrate on continuous improvements over a reasonable amount of time. Team involvement is vital to make the PSQR complete and relevant for those users. Seldom could it be perfect from the start. It is merely after considerable efforts and showing / debating by various personalities and disciplines within the machine a PSQR can be at its optimum of effectiveness and relevance. All individuals in the PSQR development process must pay very close focus on details to have success. The next template has been developed and enhanced over a number of years in practice of managing the grade of products at outsourced supplier's facilities. Designed to prepare yourself in close collaboration with the outsourced company it presents a standard format for compiling the merchandise Technical specs and Quality Requirements and could easily be designed to meet special requirements as needed. In this manner Trip Inn getting the greater quality service from other supplier and managing the grade of their company.

5. 0 Recommendation

The key things for outsourcing which may have to have a good negotiation vitality when a business opt to do any outsource, need to have a right people in agreement admiration to details to be actually tern on the negotiation basis and the contract have to be actually followed up so ether way in conditions of breach of contact than both get together should know in respect of what's can do things and what cant do things in respect to the both of the organization (Outsourcing service provider and outsourcing holder) to help.

And once the cost element effect company can subsidise quite a bit because the delivery will be promptly.

So based on that its better for organization to move forwards and also to get a much better product and resource its better to go for outsourcing.

6. 0 Conclusion

At the finish of the research it evidently understandable that hotels are actually benefited by doing outsourcing in terms of management risk and cost & quality control process. It could enhance the hotels competitiveness and can reduce the operational risk which indicate that outsourcing has positively contributed to the financial position of the hotel.

By outsourcing when a business can have more benefit somewhat than doing things by own, so that it can be happen that most organizations are actually reliant on outsourcing. From hospitality industry hotels are like Trip Inn hotel getting a major amount advantage which is aiding them to use their business very frequently with a good quality and guaranteed them to keep carefully the business for long time. By this kind of facility company can perform their goal promptly.

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