Financial Management For The Hotel Industry Assignment Sample

Introduction Of Financial Management For The Hotel Industry

Intercontinental Hotels Group (IHG) is a leading global hotel company that operates a wide range of hotel brands across the world. With a strong focus on guest satisfaction and quality service, IHG's Housekeeping department plays a crucial role in maintaining cleanliness, comfort, and overall guest experience. In this context, outsourcing the housekeeping department may seem like an attractive option due to potential cost savings and other perceived benefits (Group,InterContinental Hotels , 2023). However, upon closer examination, several arguments can be made against outsourcing, considering factors such as abilities of those employed, cost implications, results, sustainability, consistency, and guest experience.

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The primary argument made in this report is that Intercontinental Hotels Group should not outsource its housekeeping division. This study aims to show that insourcing the housekeeping team is a more advantageous and effective approach for preserving cleanliness, ensuring quality service, and enhancing the overall guest experience within the organisation. It does this by taking into account various factors, such as the skills of those employed, cost implications, results, sustainability, consistency, and guest experience.

Comparison of insourced housekeeping team Vs Outsourcing Housekeeping

Within the Intercontinental Hotels Group (IHG), a number of elements are taken into consideration when contrasting an in-house housekeeping crew with outsourced housekeeping services. The Housekeeping crew might be outsourced with benefits in terms of knowledge and skills. To ensure that personnel match its particular standards and criteria, IHG may personally hire and train them. Better quality control is made possible by doing this, and it also guarantees that the housekeeping crew is knowledgeable with IHG's policies, brand standards, and customer service requirements (Pesonen, 2015). The in-house workforce can be more readily managed, monitored, and given timely feedback, which will increase performance and open up prospects for professional growth. However, on contrary, when housekeeping tasks are outsourced, there may be a loss of knowledge and training. Because the outsourced personnel could not fully comprehend IHG's needs, there could be misunderstandings and poorer performance overall. Inconsistent communication might also prevent the team from regularly meeting IHG's requirements (Dixit,Surbhi , 2022).

Overall, it can be said that insourcing The IHG Housekeeping crew has a number of benefits over outsourcing. It guarantees a higher degree of control over resources, enables better cost control, encourages consistency in outcomes, and strengthens dedication to IHG's standards. These elements eventually improve the visitor experience and improve the organization's reputation.

Abilities of those employed vs outsourcing employees

When comparing the abilities of those employed in an insourced housekeeping team versus outsourced housekeeping employees within Intercontinental Hotels Group (IHG), again several important factors come into play (Iheriohanma, 2020).

Insourcing the Housekeeping team allows IHG to directly hire and train employees to meet the specific standards and requirements of the organization. This enables IHG to have better control over the skill set and capabilities of the housekeeping staff. IHG can tailor the training programs to align with its brand standards, service expectations, and specific needs of each property (Lee, 2019). This ensures that the employees possess the necessary skills and knowledge to provide high-quality service to guests. Additionally, an insourced workforce is simpler to manage and oversee, enabling continuous training, quick feedback, and performance reviews. This promotes continual improvement and guarantees that staff members are aware of the latest IHG standards and procedures(Robinson, 2016). Employees who have a direct employment link are more likely to feel devoted to the company and committed to its objectives (Ohnemus, 2020).

In contrast, contracting out your housekeeping needs could leave you with less control over the skills of your staff. When outsourcing, IHG entrusts the hiring and training of the housekeeping crew to a third-party supplier. The competency and skill levels of the outsourced staff may differ as a result. The outsourced workers might not be as familiar with IHG's policies and standards, which could result in inconsistent service quality. Outsourced workers might not be as proficient in IHG's official language or have a thorough grasp of the company's culture, which might create communication obstacles(J, 2020). This might make it more difficult to communicate effectively with visitors, which can lead to miscommunications or subpar service.

Additionally, IHG has more control over the prospects for the housekeeping team's professional growth because to insourcing. To improve the knowledge and abilities of the workforce, the organisation might spend in training courses, seminars, and certifications. This advances their professional development and strengthens the team's collective skills, which raises the calibre of the services they provide (Belcourt, 2006).

Cost implications

Cost is one of the major factors to be considered while considering both insourcing and outsourcing of the employees. The Housekeeping team's insourcing enables IHG to have complete control over labour expenditures. IHG can more properly estimate and budget for labour costs by hiring and managing the housekeeping personnel internally. Better financial planning and the flexibility to change personnel numbers in response to demand changes are made possible by this control over labour expenses(Kinkel, 2016). Additionally, it offers transparency in terms of knowing the actual cost of the housekeeping division. IHG is also given additional freedom to optimise workforce numbers thanks to insourcing (LINDH, 2016). IHG can scale back the amount of housekeeping personnel during periods of low occupancy, cutting labour expenses. In contrast, IHG can quickly raise employee numbers at times of high demand to fulfil the demands of guests. This flexibility in workforce changes may result in more effective cost control (Rodríguez, 2019). On the other hand, because labour expenses are reduced, outsourcing housekeeping services may at first seem economical. IHG could have little knowledge of how expenses are distributed throughout the outsourced firm. It may be difficult to monitor and control spending efficiently due to this lack of transparency (Najafi, 2019).

It's also important to note that insourcing gives IHG the chance to immediately apply cost-cutting strategies. For instance, IHG may teach its in-house housekeeping staff how to utilise eco-friendly cleaning supplies, conserve electricity, and produce as little waste as possible. These sustainability initiatives can support IHG's environmental objectives while also resulting in long-term economic benefits (Zhu, 2001). .

Results

It is critical to evaluate the effects on many organisational factors when comparing the outcomes of internalising the housekeeping crew vs outsourcing housekeeping services inside Intercontinental Hotels Group (IHG).

IHG is able to exert direct control over the outputs and results of the housekeeping department by outsourcing the workforce. IHG can set and enforce certain quality requirements, operational guidelines, and customer service standards for its own staff. This makes quality control possible and guarantees that guests will always receive high-quality service. Direct management and oversight of the housekeeping crew also makes it easier to provide quick feedback, conduct performance reviews, and create possibilities for ongoing development.

On the other hand, outsourcing housekeeping services could produce uneven outcomes (Zhang, 2017). The outsourced workers might not be as familiar with IHG's policies and standards, which could lead to differences in the level of service. The capacity to guarantee consistent results might be further hampered by poor communication and a lack of direct supervision. Additionally, via insourcing, IHG is able to match the aims and objectives of the housekeeping team with the broader organisational plan. To guarantee smooth coordination and collaboration, the in-house staff may work closely with other departments, such Front Office and Facilities. The total visitor experience is enhanced by this integration, which also increases operational efficiency (Lamminmaki, 2003).

IHG is also able to immediately resolve any problems or difficulties that develop in the housekeeping division thanks to insourcing. The capacity to solve problems quickly and make modifications in the moment helps operations run more smoothly and effectively. It enables IHG to respond right away to fix any issues and guarantee customer happiness. A further benefit of insourcing is that it gives IHG more control over the training and career prospects available to the housekeeping staff. IHG can spend money on continuing education courses to improve staff members' work performance. Over time, better outcomes are produced as a result of this ongoing improvement (Chan, 2008).

Sustainability

Sustainability is a critical aspect to consider when evaluating the insourcing of the housekeeping team versus outsourcing housekeeping services within Intercontinental Hotels Group (IHG).

IHG is able to exert direct control over sustainable practises and projects by outsourcing the housekeeping crew. IHG may put into practise and enforce eco-friendly practises such using eco-friendly cleaning products, energy-saving tools, and waste minimization techniques. IHG's dedication to sustainability is in line with this, and it also has a positive influence on the environment. To ensure their incorporation into everyday operations, the internal staff might be instructed and taught in sustainable practises (Taha, 2020). Additionally, IHG can more efficiently monitor and evaluate sustainability performance thanks to insourcing. The company may gather information and analytics on how much energy, water, garbage, and greenhouse gas emissions are used. IHG can analyse this information to determine its environmental impact and pinpoint areas for development. It makes it easier to carry out specific sustainability activities, such establishing reduction goals, putting recycling programmes into place, and encouraging resource conservation. The problem of establishing consistent sustainable practises, however, may arise from outsourcing housekeeping services. The outsourced staff members might not be as knowledgeable and aware of environmental measures. The correct use of sustainable practises and IHG's capacity to track and evaluate sustainability performance may be hampered by communication gaps and a lack of direct supervision (Fierro, 2018).

Consistency

Comparing the in-house housekeeping crew to outsourced housekeeping services within Intercontinental Hotels Group (IHG) requires careful consideration of consistency.

Greater control and service delivery consistency are ensured by outsourcing the housekeeping personnel. For its internal staff, IHG can set and enforce certain standards, practises, and service expectations. This makes it possible for guests to experience IHG hotels consistently. These set standards may be used to evaluate, monitor, and teach the internal workforce, assuring consistency in quality and service. On the other side, outsourcing housekeeping tasks could lead to errors. The outsourced workers might not be as familiar with IHG's policies and standards, which could cause variances in the level of service. The capacity to maintain consistent service standards might be further hampered by poor communication and a lack of direct supervision. Additionally, having an internal housekeeping staff enables greater integration and cooperation with other IHG departments. Smooth operations and consistent service delivery are made possible by the strong cooperation between Housekeeping, Front Office, and Facilities. The departments' alignment improves the overall uniformity and effectiveness of the organisation (Voegtlin, 2016).

Guest experience

The Intercontinental Hotels Group's (IHG) Housekeeping department's outsourcing would be detrimental to the visitor experience. A better guest experience may be achieved by keeping the housekeeping service in-house, which guarantees better control, quality, and consistency.

First of all, IHG may maintain direct monitoring and control over the standards and practises followed by the housekeeping employees by outsourcing housekeeping. As a result, IHG can develop and enforce clear service standards, assuring uniformity in the upkeep of the guest rooms. Because the outsourced workers may not be under your direct supervision, service standards and cleanliness may vary. Second, a housekeeping crew that works for the hotel itself may be better educated and supervised to adhere to IHG's unique standards and brand guidelines. In order to ensure that the staff is knowledgeable of IHG's service philosophy, guests' preferences, and brand identity, IHG may give ongoing training and feedback to the team. With personnel that has been outsourced and may have had little exposure to IHG's unique standards and guest expectations, it might be difficult to obtain this level of training and knowledge. Additionally, an in-house housekeeping staff may promote improved communication and teamwork with IHG's Front Office and Facilities divisions. Through this cooperation, guests are guaranteed a smooth and consistent experience throughout their visit. Guest experiences may become fragmented as a result of communication problems and coordination issues brought on by outsourcing (Dixit,Surbhi , 2022).

Conclusion

In conclusion, this study highlights the importance of considering various factors when making decisions related to the housekeeping department within Intercontinental Hotels Group (IHG). By examining the key aspects of sustainability, consistency, and guest experience, it becomes evident that insourcing the housekeeping team provides greater control, consistency, and enhanced guest satisfaction. Insourcing allows IHG to maintain and enforce specific standards, provide continuous training, and foster collaboration among departments, ultimately resulting in a superior guest experience. These findings emphasize the significance of retaining the housekeeping function in-house to ensure optimal service delivery and uphold IHG's brand reputation in the competitive hospitality industry.

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