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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Coming up in February 2019...

Social Media: Getting Personal

There Social media platforms have revolutionized the hotel industry. Popular sites such as Facebook, Twitter, Pinterest, Instagram, Snapchat, YouTube and Tumblr now account for 2.3 billion active users, and this phenomenon has forever transformed how businesses interact with consumers. Given that social media allows for two-way communication between businesses and consumers, the emphasis of any marketing strategy must be to positively and personally engage the customer, and there are innumerable ways to accomplish that goal. One popular strategy is to encourage hotel guests to create their own personal content - typically videos and photos -which can be shared via their personal social media networks, reaching a sizeable audience. In addition, geo-locational tags and brand hashtags can be embedded in such posts which allow them to be found via metadata searches, substantially enlarging their scope. Influencer marketing is another prevalent social media strategy. Some hotels are paying popular social media stars and bloggers to endorse their brand on social media platforms. These kinds of endorsements generally elicit a strong response because the influencers are perceived as being trustworthy by their followers, and because an influencer's followers are likely to share similar psychographic and demographic traits. Travel review sites have also become vitally important in reputation management. Travelers consistently use social media to express pleasure or frustration about their guest experiences, so it is essential that every review be attended to personally. Assuming the responsibility to address and correct customer service concerns quickly is a way to mitigate complaints and to build brand loyalty. Plus, whether reviews are favorable or unfavorable, they are a vital source of information to managers about a hotel's operational performance.  The February Hotel Business Review will document what some hotels are doing to effectively incorporate social media strategies into their businesses.