Outsourcing for Hotels 101

By Michael Doyle Managing Director and Executive VP, CHMWarnick | May 14, 2017

Hotels have historically outsource services to restaurant operators, parking and audio visual professionals, with resorts often outsourcing recreational services and landscaping as well. Today's options for outsourcing are much broader, as new firms have developed business models to provide expertise with greater efficiency at lower costs. Have you considered outsourcing your entire housekeeping operation? How about stewarding, overnight cleaning, or laundry operations? Other options could be banquet services, night cleaning, HVAC Services or Accounting Services.

As we develop this series of articles and focus on the evolving outsourcing opportunities, it is important to ask the question -- Why do Hotels outsource? Or, stated a little differently, Why should I challenge the traditional operations model and introduce uncertainties into my operation? Hotels outsource to meet the changing demands of the labor market, cope with high and increasing costs of benefits, better meet the needs of their guests, bring added expertise to the team and accomplish this at low cost with high margin benefits. In short, we outsource to maximize profitability.

Outsourcing does not necessarily mean a loss of quality or of control. The best firms bring expertise and talent to your team. Success is achieved when these third parties are fully integrated into the operation and not treated as outsiders. The successful operations have their third party partners participating in meetings both internal and external (yes – with clients), providing cost and revenue enhancement opportunities and being held accountable to the service delivery standards set by the Hotel Manager or Brand. Managers will also benefit from the additional resources from off-property leadership of these firms to fully leverage their expertise to drive performance.

Established third party firms have developed over the last several years and are dedicated in their area of expertise. They bring knowledge, experience and resources to meet the changes in demand posed by Hotel operations. These firms are the subject matter experts in their disciplines, often bringing capital resources in equipment and can be an excellent resource to Hotel managers in meeting changing needs, including the ability to flex with the business demands of the operation. Hotels have adapted and crafted over the years processes and practices to integrate these third parties into the operation and service culture. The benefit of this focus should result in a seamless experience for the client, complementing the efforts of the Hotel.

Integrating a third party into your operation takes careful planning and commitment. No matter the scale of initiative, it is critical to think through and identify the scope of their responsibilities.
Doing the homework up front will avoid unnecessary issues in not only the execution of the contract but more importantly the service to your guests – even if the outsourced service is not forward facing to your guests. Here are some steps to consider taking in the development of the scope of work:

  • Development of a detailed responsibility task list for each of the positions
    that will be outsourced

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Guest Service: A Culture of YES

In a recent global consumers report, 97% of the participants said that customer service is a major factor in their loyalty to a brand, and 76% said they view customer service as the true test of how much a company values them. And since there is no industry more reliant on customer satisfaction than the hotel industry, managers must be unrelenting in their determination to hire, train and empower the very best people, and to create a culture of exceptional customer service within their organization. Of course, this begins with hiring the right people. There are people who are naturally service-oriented; people who are warm, empathetic, enthusiastic, pleasant, thoughtful and optimistic; people who take pride in their ability to solve problems for the hotel guests they are serving. Then, those same employees must be empowered to solve problems using their own judgment, without having to track down a manager to do it. This is how seamless problem solving and conflict resolution are achieved in guest service. This willingness to empower employees is part of creating a Culture of Yes within an organization.  The goal is to create an environment in which everyone is striving to say “Yes”, rather than figuring out ways to say, “No”. It is essential that this attitude be instilled in all frontline, customer-facing, employees. Finally, in order to ensure that the hotel can generate a consistent level of performance across a wide variety of situations, management must also put in place well-defined systems and standards, and then educate their employees about them. Every employee must be aware of and responsible for every standard that applies in their department. 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.