Should You Outsource Your Hotel Accounting?

By David Lund Hospitality & Leadership Expert, The Hotel Financial Coach | August 06, 2017

Outsourcing your hotel accounting is an unintelligent move, that is my opinion and I am going to make my case right here. When I refer to outsourcing, I am talking about a third party provider, not a centralized function.

Any good decision comes down to more pros than cons.

I often work with clients on decisions and we often make two lists. Good things that can come from a decision and how we can amplify them, then the bad things that could and would happen and how we can minimize them. Here goes my list on outsourcing your hotel accounting. Rather than two lists I will alternate between pro and con.

One good thing that comes from outsourcing is being trendy. Many brands are doing it and it is the trendy thing to do. I spoke with a CFO recently and he explained that the board had decided on outsourcing.

"Why would they do that?" I asked. He smiled a little and said, “We need to keep up with our competition, other brands are outsourcing so we are going to as well.” Inside his smile I detected a slight amount of political discouragement. My take on this exchange: It is a political thing and the CFO was going to pick his battles. This was not going to be one of them. Why should he care? His company does not own the hotels; they simply manage them for someone else. He knows ultimately if there is a service problem it falls on the hotel’s lap, not the management company’s problem really.

In business, especially one that has multiple stakeholders, the pressure to keep up with the Jones’s is stiff. Companies feel compelled to move, to innovate, and sometimes these changes are not in their best interest. There is a quote that speaks very nicely to this, “If you enter a market and don't know what to do, watch what everyone else is doing, and then do the opposite. The majority is almost always wrong. " ~ Earl Nightingale

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Excellent customer service is vitally important in all businesses but it is especially important for hotels where customer service is the lifeblood of the business. Outstanding customer service is essential in creating new customers, retaining existing customers, and cultivating referrals for future customers. Employees who meet and exceed guest expectations are critical to a hotel's success, and it begins with the hiring process. It is imperative for HR personnel to screen for and hire people who inherently possess customer-friendly traits - empathy, warmth and conscientiousness - which allow them to serve guests naturally and authentically. Trait-based hiring means considering more than just a candidate's technical skills and background; it means looking for and selecting employees who naturally desire to take care of people, who derive satisfaction and pleasure from fulfilling guests' needs, and who don't consider customer service to be a chore. Without the presence of these specific traits and attributes, it is difficult for an employee to provide genuine hospitality. Once that kind of employee has been hired, it is necessary to empower them. Some forward-thinking hotels empower their employees to proactively fix customer problems without having to wait for management approval. This employee empowerment—the permission to be creative, and even having the authority to spend money on a customer's behalf - is a resourceful way to resolve guest problems quickly and efficiently. When management places their faith in an employee's good judgment, it inspires a sense of trust and provides a sense of higher purpose beyond a simple paycheck. The April issue of the Hotel Business Review will document what some leading hotels are doing to cultivate and manage guest satisfaction in their operations.