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Pros and Cons of Outsourcing in the Travel & Hospitality Industry

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Pros and Cons of Outsourcing in the Travel & Hospitality Industry

By The Envision Team January 24, 2020


Companies in all industries have experienced the benefits of outsourcing specific functions of their business. A few common examples include law firms outsourcing their bookkeeping in order to reduce staff costs and consulting companies outsourcing their recruitment to drive down cost per hire.

Essentially, outsourcing, regardless of the function, reduces costs, increases efficiency, and improves your product or service offering. In the hospitality and travel industry, outsourcing is a common practice, especially in areas like food and beverage, marketing, reservations, and IT. Read below to learn about the advantages and disadvantages of outsourcing certain operations within your organization.

Advantages of Outsourcing

  • Enhanced Service Quality: Every hospitality business's top priority is service quality and guest satisfaction. Experienced outsourcing firms are familiar with industry service standards and possess the know how necessary to deliver services exceeding customers' expectations.

  • Core Business: Allowing an outsourcing partner handle certain functions within your operation allows your team to focus on growing business and delivering an exceptional guest experience.

  • Risk Sharing: Outsourced staff are employed by the partner firm, not your company, which effectively shifts legal risk associated with labor out of your organization. Additionally, your overhead is reduced as the back office expense is covered in the service fee.

  • Reduced Cost: Outsourcing can help an organization cut its operational costs by as much as 50%, which provides an overall cost advantage against competing hospitality operations.

  • Flexibility: Outsourcing allows your operation to adapt to demand and growth in real time and with minimal inconvenience.

Disadvantages of Outsourcing

  • Reduced Control: Shifting the responsibility of a certain function of your business to an outside firm does not necessarily mean you lose control of your service offering. A reputable, experienced outsourcing partner can deliver the services while allowing you to maintain control of your end offering.

  • Multiple Customers: Outsourcing firms cater to the needs of several clients simultaneously and may not be able to focus 100% of their attention to your business.