Financial Management for the Hotel Industry Assignment Sample

Introduction Of Financial Management for the Hotel Industry Assignment

The largest international hotel firm Intercontinental Hotels Group (IHG) runs multiple hotel brands all over the world. IHG's maintenance division is essential to preserving hygiene, ease, and the complete guest experience since it places an enormous value on customer satisfaction and providing outstanding service. The possibility of reducing expenses and other advantages may make outsourced a cleaning function appealing in this situation. On further review, however, numerous arguments may be made opposing outsourcing, considering account things like the skills of the individuals engaged, possible expenses, outcomes, long-term viability uniformity, and visitor experience.

The main reason in this report is against outsourcing the housekeeping department of Intercontinental Hotels Group. The aim of this report is to establish that hiring in-house housekeepers is a more cost-effective and efficient strategy for sustaining cleanliness, providing excellent customer service, and improving the entire visitor experience within the business. It is this by taking into account a number of factors including the expertise of the employees, potential financial consequences, outcomes, sustainability, consistency, and the experience of visitors.

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Compare between insourced team Vs Outsourcing Housekeeping

When comparing an internal housekeeping team versus external housekeeping services at the Intercontinental Hotels Group, a variety of factors are taken into concern. There may be advantages to outsourcing the housekeeping staff in terms of experience and competencies. IHG may directly hire and train employees to ensure they meet its own requirements and criteria (Ozdemir, et. al. 2021). It also allows for better quality control and ensures that the housekeeping team is accustomed to IHG's regulations, brand norms, and customer service needs. The ability to more easily manage, monitor, and provide timely feedback to the internal staff will enhance performance and create opportunities for career advancement.

On the other hand, when housekeeping responsibilities are outsourced, around might be a loss of information and preparation. For the reason that the outsourced workers could not completely realize IHG's requirements, there could be misinterpretation and poorer performance in general (Sheel, 2019). Poor communication might also avert the group from frequently gathering IHG's needs. In all, it can be stated that the IHG Housekeeping team prefers insourcing over outsourcing for a number of reasons. It ensures greater resource control, enables better cost management, promotes stability in results, and reinforces compliance to IHG requirements. Over time, these fundamentals get better both the visitor experience and the company’s reputation.

Abilities of persons employed vs. outsourcing employees

Several important factors come into play when comparing the skills of persons employed by an insourced housekeeping group and those engaged by an outsourced team within Intercontinental Hotels Group. IHG is able to personally hire and train staff members to fulfil the particular requirements and standards of the organization by outsourcing the housekeeping crew. IHG is able to apply stronger manage over the knowledge base and talents of the housekeeping crew (Alvarez, et. al. 2021). The company may modify the training courses to meet the requirements of each property as well as its brand guidelines and service expectations. This guarantees that all team members have the skills and expertise required to offer customers excellent service. An insourced workforce is also easier to manage and manage, allowing for constant training, prompt feedback, and performance evaluations. This encourages continued growth and ensures that employees are familiar with the most recent IHG rules and regulations (Quan, et. al. 2022). Direct job connections increase an employee's sense of loyalty to the organisation and commitment to its goals.

In contrast to this, outsourcing housekeeping requirements may provide with less influence over the personnel's qualifications (Rusmingsih, et. al. 2021). When outsourcing, the company trust the employment and training of the housekeeping staff in the hands of third-party supplier. Moreover, abilities of the outsourced workforce can differ in comparison to the in-house team. It is possible that the outsourced employees are less familiar with company’s standards and expectations, which might lead to variable service quality. Outsourced staff members could not be as fluent in company’s standard language or possess a complete understanding of the corporate culture, which might lead to communication problems (The Pros and Cons of Outsourcing, 2023). This could make it more challenging to interact with guests in an effective way, which may result in misunderstanding or poor services.

Due to insourcing, IHG also has greater influence over the possibilities for the housekeeping staff's professional development. The company may invest in training programmes, seminars, and certifications to improve the skills of its employees. This increases the team's combined talents and creates their professional development, thereby raising the level of the service they offer.

Cost implications

Cost is the main factor to be measured while taking into consideration both outsourcing and insourcing of the workers. The Housekeeping group insourcing enable company to have entire manage over labour expenditures. IHG can more appropriately approximate and financial plan for labour costs by employ and overseeing the housekeeping workers internally. Enhanced financial planning and the suppleness to change workers numbers in comeback to insist changes are made potential by this manage over labour expenses (Mueller and Sensini, 2021). In addition, it offers lucidity in terms of significant the definite cost of the housekeeping distribution. The organization is also given further freedom to optimize personnel. IHG can extent back the quantity of housekeeping workers during periods of low possession, cutting labour expenses.

On the contradictory note, IHG is able to boost staff members swiftly to meet demand from guests during periods of high demand. This flexibility in labour could give rise to more effective cost management. On the other side, outsourced housekeeping services could first appear cost-effective due to lower staff costs (Úbeda-García, et. al. 2021). IHG may not be particularly acquainted with how costs are allocated all through the outsourced resources. The absence of transparency may make it difficult to efficiently track and handle spending.

It is also vital to remember that an organization may instantly implement savings measures because of insourcing. IHG may instruct its in-house housekeeping workers to take advantage of environmentally friendly cleaning products, save power, and produce the least amount of garbage feasible, for example. The environmental goals of IHG may be expanded by these initiatives to promote sustainability, which will also have a positive long-term economic impact.

Comparing the results of internalised the housekeeping staff VS outsourced housekeeping services throughout Intercontinental Hotels Group, it is essential to evaluate the influence on several organisational elements (Kim, et. al. 2019). Through the utilisation of an external workforce, the business is able to exercise direct influence over the outputs and outcomes of the housekeeping division. For its own employees, the company maintains the authority to create and enforce specific quality criteria, operating rules, and customer service standards. As a consequence, quality control is made practical and guests are always given excellent service. In addition, timely feedback, evaluations of performance and opportunities for further development are made possible by direct supervision and monitoring of the housekeeping staff (Mohammad, et. al. 2022).

Results

Though, outsourcing cleaning tasks might result in inconsistent results. There may be variances in the standard of service since the outsourcing staff may not be as acquainted with company’s rules and standards. The inability to directly supervise personnel and the absence of effective communication may make it even more difficult to ensure regular output. IHG is also able to connect the goals and goals of the housekeeping staff with the overall organisational strategy through insourcing (Iannuzzi and Sacchetto, 2022). The internal employees may collaborate extensively with other agencies, such as Front Office and Facilities, to ensure efficient communication and collaboration. This combination enhances the overall visitor experience and boosts operational effectiveness.

Additionally, through insourcing, the company is able to quickly address any problems or problems that emerge in the housekeeping business. Rapid resolving issues and on-the-spot change-making abilities make operations function more efficiently and effectively. It allows IHG to react quickly to address any concerns and assure client satisfaction. Another advantage of outsourcing is that it provides IHG with greater influence over the career opportunities and training offered to housekeeping workers (Kaiser, 2021). IHG can invest cash on continuing education initiatives to raise worker efficiency. This continuous development results in better outcomes over time.

Sustainability

When comparing hiring an internal housekeeping staff contrary to contracting out housekeeping services at the Intercontinental Hotels Group (IHG), sustainability is an essential consideration to take into account. By contracting out the housekeeping staff, IHG has the ability to exercise full influence on environmentally friendly practises and efforts. IHG could put ecological practises into action and enforce them, such as employing environmentally friendly cleaning products, saving energy devices, and reducing waste methods. This is in line with IHG's commitment to sustainability, which benefits the environment as well (Adhikari, et. al. 2019). The internal staff may be coached and trained in sustainable practises to enable their incorporation into daily operations.

IHG can also assess and monitor sustainability outcomes in insourcing more efficiently. The company can gather data and analytics on the use of energy, water, waste, and emissions of greenhouse gases. An organziation could investigate this data to assess its impact on the environment and identify potential development sites. It makes it simple to carry out particular efforts to promote sustainability, such setting reduction goals, implementing recycling initiatives, and promoting conserving resources. Nevertheless, outsourcing housekeeping tasks may provide a challenge to establishing regular sustainable practises (Mohapatra, 2022). The staff members that were outsourced might not be as well-informed as they are of environmental precautions. Communication issues and the lack of direct monitoring may make it difficult for the company to monitor and evaluate its performance in sustainability and apply sustainable practises correctly.

Consistency

Consistency must be thoroughly taken into account when contrasting the in-house housekeeping staff with outside housekeeping services throughout Intercontinental Hotels Group. By hiring out the housekeeping staff, more control and consistency in the provision of services are assured. An organization may establish and enforce particular norms, procedures, and service expectations for its internal employees (Nam, et. al. 2021). Customers can encounter IHG hotels consistently as a result of this. To ensure uniformity in quality and service, these established standards may be utilised to assess, supervise, and educate the internal personnel. On the other hand, outsourcing housekeeping duties could result in errors. The level of customer service might vary since the outsourced employees may not be as acquainted with company’s norms and standards.

Poor communication as well as a lack of personal supervision may make it more difficult to keep up consistent service standards. Establishing an internal housekeeping team additionally allows for better collaboration and integration with other IHG divisions (Asadi, et. al. 2020). Strong collaboration between housekeeping, a Front Office, and Facilities enables effective management and consistent service delivery. The business's general uniformity and effectiveness are enhanced by the departments' alignment.

Guest experience

The guest experience would suffer if the housekeeping division within the Intercontinental Hotels Group was outsourced. Keeping the cleaning service in-house may enhance the visitor experience since it ensures greater oversight, uniformity, and quality. By outsourcing housekeeping, IHG can continue to directly supervise and manage the standards and procedures enforced by the housekeeping staff. As a consequence, IHG is able to set and maintain precise service standards that guarantee uniformity in the maintenance of the accommodation for guests (Shamsudin, et. al. 2019). Quality of service and sanitation may differ since the contracted staff might not be directly within direct control. Second, a cleaning staff engaged directly by the hotel may receive greater instruction and supervision to comply to IHG's specific requirements and brand rules.

IHG may provide on-going training and team feedback to ensure that the workforce is cognizant of company’s service philosophical thought, customers' choices, and brand identification. It could be challenging to get this sort of training and understanding with staff that has been outsourced and might have had limited exposure to firm’s distinct standards and requirements for guests. Additionally, better collaboration and communication between company’s front-office and Amenities divisions may be encouraged by having internally housekeeping personnel. This collaboration ensures that tourists have a seamless and uniform experience through their stay. Outsourcing can cause communication and coordination concerns, which may result in fragmented guest experiences.

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Conclusion

The report emphasises the importance of taking into account a range of aspects when making decisions about the housekeeping division of Intercontinental Hotels Group. It becomes obvious that outsourcing the cleaning service provides more control, uniformity and improved visitor pleasure by looking at the essential areas of long-term viability reliability, and comfort. IHG can maintain and enforce certain standards through insourcing, as well as offer on-going training and encourage departmental cooperation, all of which contribute to a more positive guest experience. These results demonstrate how important it is to keep housekeeping in-house in order to preserve company's brand name in the cutthroat hospitality sector while providing the best possible services.

Reference

Books and Journals

Adhikari, S.D., Hoffman, S. and Lietke, B., 2019. Six emerging trends in facilities management sourcing. McKinsey & Company. Disponível em: Six-emerging-trends-in-facilities-management-sourcing. pdf. Acessado em, 25.

Alvarez, T., Sensini, L., Bello, C. and Vazquez, M., 2021. Management accounting practices and performance of SMEs in the Hotel industry: Evidence from an emerging economy. International Journal of Business and Social Science, 12(2), pp.24-35.

Asadi, S., Pourhashemi, S.O., Nilashi, M., Abdullah, R., Samad, S., Yadegaridehkordi, E., Aljojo, N. and Razali, N.S., 2020. Investigating influence of green innovation on sustainability performance: A case on Malaysian hotel industry. Journal of cleaner production, 258, p.120860.

Iannuzzi, F.E. and Sacchetto, D., 2022. Outsourcing and workers' resistance practices in Venice’s hotel industry: The role of migrants employed by cooperatives. Economic and Industrial Democracy, 43(2), pp.877-897.

Kaiser, A., 2021. In-House, yet “Standing Somewhere off”: Spatial Reflections on the Enduring Marginality of Cleaning Staff in High-Ranking London Universities. New Sociological Perspectives, 1(1).

Kim, Y.H., Barber, N. and Kim, D.K., 2019. Sustainability research in the hotel industry: Past, present, and future. Journal of Hospitality Marketing & Management, 28(5), pp.576-620.

Mohammad, K., Lathwal, A., Koushal, V. and Sharma, D.K., 2022. Identification of environmental cleaning and managerial best practices for integration in competitive bidding documents for outsourcing of housekeeping services in tertiary care hospitals in India. International Journal of Environmental Health Engineering, 11(1), p.1.

Mohapatra, N., 2022. Don’t Tender Librarianship: Outsourcing of Library Staff Degrades the Profession. Annual Issue of lisforum_orissa, 16(1).

Mueller, A. and Sensini, L., 2021. Determinants of financing decisions of SMEs: evidence from hotel industry. International Journal of Business and Management, 16(3), pp.117-127.

Nam, K., Dutt, C.S., Chathoth, P., Daghfous, A. and Khan, M.S., 2021. The adoption of artificial intelligence and robotics in the hotel industry: Prospects and challenges. Electronic Markets, 31, pp.553-574.

Ozdemir, O., Dogru, T., Kizildag, M., Mody, M. and Suess, C., 2021. Quantifying the economic impact of COVID-19 on the US hotel industry: Examination of hotel segments and operational structures. Tourism Management Perspectives, 39, p.100864.

Quan, L., Al-Ansi, A. and Han, H., 2022. Assessing customer financial risk perception and attitude in the hotel industry: Exploring the role of protective measures against COVID-19. International Journal of Hospitality Management, 101, p.103123.

Rusmingsih, D., Widarni, E.L. and Bawono, S., 2021. Human psychological factors in the success of human capital investment in driving financial performance, case study of the hotel industry in Indonesia and Malaysia. HOLISTICA–Journal of Business and Public Administration, 12(1), pp.69-75.

Shamsudin, M.F.M.F., Esa, S.A.S.A. and Ali, A.M.A.M., 2019. Determinants of customer loyalty towards the hotel industry in Malaysia. International Journal of Innovation, Creativity and Change, 6(9), pp.21-29.

Sheel, A., 2019. Hotel Industry Performance in 2018-2019 and the JHFM Index. Journal of Hospitality Financial Management, 27(2), p.1.

Úbeda-García, M., Claver-Cortés, E., Marco-Lajara, B. and Zaragoza-Sáez, P., 2021. Corporate social responsibility and firm performance in the hotel industry. The mediating role of green human resource management and environmental outcomes. Journal of Business Research, 123, pp.57-69.

Online

The Pros and Cons of Outsourcing. 2023. Online. Available through: < https://www.americanexpress.com/en-us/business/trends-and-insights/articles/pros-cons-hiring-house-vs-outsourcing/>.