Ms. Fields

Sales & Marketing

Outsourcing: A Prime Example of 'The Sum of the Parts is Greater than the Whole'

By Brenda Fields, Founder, Fields & Company

Outsourcing over the past several years, has taken on a negative perception in the market place. It has recently been associated with the idea that big businesses outsource some of their support services and functions in foreign countries in order to reduce expenses, and that this is invariably at the expense of customer satisfaction as well as local jobs. An example of outsourcing gone bad is technical support services moved to foreign countries where the technicians who are not fluent in the customer's native language, try to communicate complicated technical information and provide solutions to problem. And, to make matters worse, the service is also priced at a high rate per minute; so inefficient problem solving is very, very costly to the customer. But, in the case of small independent hotels, outsourcing can provide major benefits which would allow these properties to provide specific services and expertise that they would not be able to offer because of the costs associated. As selling rooms is the primary goal, these enhancements only create an opportunity to increase demand for your property.

Small, upscale independent hotels are faced with the challenge of competing with the chain hotels which have much greater marketing resources and marketing funds as well as the advantage of the economy of scale. Outsourcing various functions allows a property to get a "big bang for the buck" when used effectively and wisely. By tapping into outside resources which make their living by specializing in specific areas, a hotel manager or owner can potentially add value to their property and benefit from greater expertise, more cost effectively than providing on their own. Therefore, when putting it all together, the sum of the parts is truly greater than the whole.

Employee Recruitment

Most small, independent hotels do not find it cost effective to hire a staff member or to create a department dedicated to the recruitment of personnel, even though the identification and recruitment of qualified candidates is crucial to the overall performance of the property. That function, more often than not, falls on the shoulders of the general manager. Therefore, it may be beneficial to consider the services of an employment recruitment agency which has an up-to-date database of qualified candidates in all positions and provides quality reference checks and background checks. Depending on the size of the property and the number of employees, this service, if warranted, can be contracted on an annual retainer basis, which specifies the number of positions per month as well as the terms for any replacements. Outsourcing this area may allow a manager or an owner to improve the efficiency of hiring well qualified and well referenced employees, and freeing up their time to attend to planning, sales, and operations.

Sales

A dedicated sales position on your property is ideal as there is no conflict of interest and no chance of a sales call being made for another client at your expense. But, the downside is that if the sales process is not expertly devised and implemented, then the cost of sales can surpass what is actually realized. There are companies which specialize in providing outside sales solicitation services on behalf of your property. These companies typically handle multiple clients. Therefore, if this function warrants outsourcing, it is important to ensure that systems and procedures are set up with an outside sales company to ensure that quality sales calls are made on your behalf and that the annual revenues generated are approximately ten times the cost of hiring the company. Additionally, it is important to have consistent reviews with the company to ensure that they are selling your property properly and that they have up-to-date information on the property, promotions, demand periods, and the competitive set.

Marketing

A small independent property is challenged with maximizing exposure in the local, domestic and international marketplaces. A well optimized web site is a great equalizer and can cost effectively help an independent property gain equal exposure online against its chain-affiliated competition. But, outside of the web site, the costs to accomplish this goal far exceeds the industry standard of marketing expenses, which is typically six percent of revenues. Therefore, a marketing representation companies can insure that your property is represented in trade shows, mailings, advertising, and advertising. Costs vary significantly based on which services are provided and how well established the representation company is. So, it is important to evaluate your needs in the long term as well as the short term, and evaluate the ROI of the company considered.

Reservations

Typically, reservations are handled by the front desk staff in small, independent hotels. But in a busy property, reservations usually take a back seat to the person standing across from the front desk staff. In addition, if there is an on-property reservationist, the hours are usually limited to eight hours per day, five days per week. So if it is determined that revenues are lost as a result, this area could be outsourced to a marketing representation company. One advantage of outsourcing is that the exposure and ease of booking are greater than what could be accomplished in a cost effective way in a small property. Voice reservations can be provided 24/7 to ensure that every time zone is free to book your property at their convenience, increasing the likelihood that your property will be booked.

Restaurant/Bar

Given the margins in food and beverage, it requires great planning and expertise to ensure profitability. Many times, in a small property, it is not profitable to provide a restaurant and/or bar. Therefore, it may make sense to outsource this to established restaurateurs who have all the elements in place to provide this service. They have the responsibility to run the business, based on your needs and objectives, and you have provided an additional service to your guests at no expense to you.

Health Club

As with a restaurant/bar, health clubs, if done correctly, are costly to develop and maintain due to cost of equipment, staff and insurance. Therefore, if a health club could add value to your product, consider outsourcing this by finding a well established health club business to provide this service either in your property or in one of their nearby clubs.

Lastly, as with any company or service, there are varying levels of professionalism and expertise. So before choosing what is best for your needs and your property, a careful evaluation is necessary to ensure that you are getting the best match to accomplish your goals. By understanding what resources are available and how to effectively use them, an owner or manager is in a great position to determine the best course of action for his/her property.

Brenda Fields is a strategist and sales and marketing expert honed from a successful track record in the hospitality industry. Brenda is a member of the prestigious ISHC, recently served on the Americas Board of Directors for HSMAI, and is Immediate Past President of the Hospitality Sales & Marketing Association International. Brenda was honored as one of "The Top 25 Most Extraordinary Minds in Sales and Marketing" by HSMAI as well as the "Leadership Development" award. She is an industry leader and spokesperson; a member of the Editorial Board of HotelExecutive.com; contributes regularly to international publications Hotel News Now; Hotels Online, Hotel Resource Weekly Network News, eHoteliers, and many others. For more information visit www.fieldsandcompany.net Ms. Fields can be contacted at 518-789-0117 or brenda@fieldsandcompany.net Extended Bio...

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