Hotel Industry Challenges & Opportunities

This assignment delves into the contemporary landscape of the hotel industry. It examines various challenges hotels face, including competition, technological advancements, evolving customer expectations, and sustainability concerns. The assignment also explores emerging opportunities for hotels to thrive in this dynamic environment, such as personalized experiences, revenue management strategies, and the integration of technology to enhance guest satisfaction.

Running head: RITZ-CARLTON OUTSOURCING OPTIONS
Ritz-Carlton Outsourcing options
Name of the University
Name of the Student
Author note

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Table of Contents
Overview of the hotel......................................................................................................................2
The Front Office function................................................................................................................2
The PMS function........................................................................................................................3
Guest Services.............................................................................................................................3
Data management and guest accounting..........................................................................................3
Role of the customer and the customer’s needs related to front office department.........................4
Steps that the Accommodation Manager takes to ensure customers’ needs are met.......................5
Outsourcing as a viable option for front office................................................................................6
The pros of outsourcing front office............................................................................................7
Cons of outsourcing.....................................................................................................................8
Recommendations............................................................................................................................8
References:......................................................................................................................................9

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Overview of the hotel
The Ritz-Carlton is one of world’s top rated hotels. In the accommodation industry, this
hotel holds a reputed position. Accommodation is one of the most sought after services by people
traveling to far off lands and looking for comfort. The Ritz-Carlton ensures a comfort that is
unmatched in its class. Formed initially in the 1940s, the Ritz-Carlton was fully established in
1983 as The Ritz-Carlton Hotel Company by Colgate Holmes and Horst Schulze alongside
others (Ritzcarlton.com 2018). The company has not looked back since. State-of-the-art
technology abound the hotel along with superior natural beauty. One of the premier objectives of
the hotel is to provide never felt before luxury to its customers notwithstanding their ethnicity,
religion or class. The hotel takes pride in claiming more than twenty franchises around the globe.
The Front Office function
A hotel comprises numerous departments that are managed by the staff every day around
the clock to ensure quality service. The front office department is probably the most crucial part
of a hotel as it is responsible for a customer’s first impression and further satisfaction. Apart
from that, other includes the human resource department, the banquet department, laundry,
grocery and food department and so on. As one of the best hotels in the world, it is undoubted
that the Ritz-Carlton would have the best front office department. A hotel’s most crucial tasks
are performed by its front office department that include reservations for guests, making
registrations, replying to queries, and receiving payments amongst others (Benavides-Velasco,
Quintana-García and Marchante-Lara 2014). Mainly, the front office department manages three
very significant areas that are, the Property Management System or PMS, accounting and data
management for guests and guest services (Bertan et al. 2016).

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The PMS function
The Property Management System can be explained as the function that involves looking
after other departments of the hotel (Chibili 2017). In recent years, the PMS has evolved greatly
integrating other departments like food and beverages, housekeeping, maintenance and sales and
catering, providing customers with complete and unmatched experience. This integration
includes the computerized program called Central reservations system or CRS records
reservations for guest rooms. (Koo et al. 2015), state that the inclusion of this state-of-the-art
system has revolutionized the way hotel industry is run. It has eased the pressure on staff greatly
and enhanced quality of service, they add further.
Guest Services
The Ritz-Carlton is renowned for the services it provides to its guests. Serving the guests
commences at the front desk with staff welcoming the guests warmly and attending to all their
queries. Guest services also include providing transportation facilities to the guests, helping them
with the luggage, playing the role of a tour guide, delivering newspapers and so on.
Data management and guest accounting
Under this process, the front office staff is responsible for carrying out night audit work
that involves examining for correctness and totality of transactions in a day. The process is
undertaken to end or close the sales information for the day (Kimes 2016). Data management
also involves the work of the PMS that keeps records of the guests’ name, their arrival date,
address, phone number and so on. In addition, the PMS also keeps record of the guests’
affiliation to the company and room types references.

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Role of the customer and the customer’s needs related to front office department
Apart from the technological assistance that the front office provides to its customers, it
must also look after their basic needs. These include, showing care for customers, attending to all
their queries without worrying about the time and so on. Along with these, some technical needs
also have to be met by the front office department (Manhas and Tukamushaba 2015).
First, the staff needs to make sure that the customers are allotted registration cards at the
time of their arrival. The registration or ‘reg’ card includes details such as customer’s name, date
of arrival, rate, and date of departure and so on. The registration process involves five steps that
are,
 Greeting the customers
 Confirming details mentioned on the registration record
 Securing and receiving payment
 Assigning room
 Issuing room keys
Second is the communication need of the customer. The front office has to make sure that
they are available for all kinds of communication that is demanded by the customer. In addition,
the front office must take extreme care while communicating and make sure that they do not
sound rude or inattentive. Listening carefully is a key to good communication. Customers
communicate with front office staff to ask for varied services while their stay at the hotel.
Communication needs of the customers include,

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 Queries regarding reservation and registration
 Pick up arrangements, requirements related to housekeeping
 Arrangements for specific orders in case of special occasions
 In situations of emergency
 Queries regarding nearest tourist spots and so on
Apart from the above-mentioned needs, customers also have other basic needs that must
be addressed by the front office department. To be precise, most of the duties and responsibilities
that the front office has to perform, are all linked to the needs of the customers. Making
arrangements for safety deposit boxes, receiving messages on behalf of the customers, arranging
wake-up calls, delivering newspaper and other sources of entertainment are some of the needs of
the customers related to front office department. These needs come under the guest services duty
that the front office has to perform (Turner et al. 2017). Thus, it is correct to state that customers’
needs are the responsibilities of the front office.
Steps that the Accommodation Manager takes to ensure customers’ needs are met
Managers have the most important job to manage, control, direct and plan the activities
that take place in a hotel. A hotel has managers for different departments who ensure smooth
functioning and superior customer service (Kao, Tsaur and Wu 2016). Front office managers in
particular have the most difficult job to look after the operations of the front office department.
The manager needs to take certain steps to guarantee full satisfaction of the customer.
 First, the manager must check for any loopholes in the front desk and rectify those
prior to the guests’ arrival

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 Second, the manager must have all the information regarding the arriving guests
to ensure quality service
 Third, the manager must attend to any complaints made by the customers and
resolve those politely
 Fourth, he should make sure that the customers’ security is up to the mark and
there are no issues regarding it
 Fifth, the manager must carefully monitor each section of the front office to check
whether those are adept in meeting all kinds of customer needs (Mathe, Scott-
Halsell and Roseman 2016)
 Sixth and the most important, the manager should communicate with the customer
in a way that impresses them and in addition, conveys the culture of the hotel
The manager is entrusted with the task to achieve full customer satisfaction through
proper monitoring and controlling of other staff members and departments.
Outsourcing as a viable option for front office
Outsourcing has come to be recognized as the most viable and easy option for businesses
to run smoothly. In the sphere of hotel industry, outsourcing is rapidly occupying a crucial place.
In order to understand whether outsourcing is a feasible option for Ritz-Carlton hotel, one must
first have knowledge about the term. Outsourcing, as defined by Gerbl, McIvor and Humphreys
(2016), refer to the process of contracting out any section of the business to a third party for
better functioning. The process is largely used by hotel industry to manage budget and cut costs
while maintaining superior quality.

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The front office, as already mentioned is the most important department of any hotel and
outsourcing it would require proper planning and strategizing. It is important to note that while
many emerging hotels prefer outsourcing of the front office, some still prefer managing the
department with in-house staff (Sharma 2015). However, outsourcing is an effective method as
proven by its increasing popularity. In case of Ritz-Carlton Hotel, outsourcing of the front office
department can be a good option to manage its overall expenditure (Ibisworld.com 2018). The
pros and cons of outsourcing the front office must be elaborated clearly in order to understand
whether the hotel shall go ahead with it or not.
The pros of outsourcing front office
1. The first major advantage of outsourcing is the reduction in costs. Outsourcing the
front office would enable the hotel management to cut extra costs of paying
employees. In addition, the hotel can concentrate on increasing budget dedicated to
improved customer service.
2. Hiring professionals with expertise in handling front office responsibilities would
ensure better functioning of the department. Moreover, the company where front
office would be outsourced will be equipped with state-of-the-art technology that
assists works more easily and produces excellent outcomes.
3. Outsourcing the department would reduce the burden on the hotel of managing
numerous departments and complying with customer needs simultaneously. When the
management does not have to worry about a department, it provides great relief and
customers are satisfied as well.

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Cons of outsourcing
1. (Gunasekaran et al. 2015), believe that outsourcing destroys the very essence of a
hotel that is meant to treat customers as part of the establishment. When the hotel
outsources its front office, it loses control over that department and may have to
compromise on quality.
2. Alignment with the outsourced department is another issue that may arise for the
hotel management. A visible lack of communication with the outsourced department
might come as a disadvantage for the hotel.
Recommendations
It is clear from the pros and cons of outsourcing listed above that the hotel has to be extra
careful while taking the decision. However, it is recommended for Ritz-Carlton not to opt for
outsourcing as it has an established reputation already. Outsourcing one of the most important
departments of the hotel might prove a wrong step for Ritz-Carlton. Having a status of one of
world’s top hotel chains, Ritz-Carlton has already outsourced its housekeeping service. Further
outsourcing of the front office would devalue the hotel’s long held reputation.
It is recommended that the hotel focuses largely on the front office department a=since it
does not have to worry about its outsourced housekeeping department. Further, the hotel can
look for innovative techniques to lure customers like going out of the way and doing something
not inherent of the brand. In addition, the hotel management must concentrate on other important
services like providing tour guides to customers, arranging for added entertainment like holding
in-house parties or events.

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References:
Benavides-Velasco, C. A., Quintana-García, C., and Marchante-Lara, M. 2014. Total quality
management, corporate social responsibility and performance in the hotel industry. International
Journal of Hospitality Management, 41, 77-87.
Bertan, S., Bayram, M., Ozturk, A.B. and Benzergil, N., 2016. Factors influencing hotel
managers’ perceptions regarding the use of mobile apps to gain a competitive advantage. Asia-
Pacific Journal of Innovation in Hospitality and Tourism, 5(1), pp.59-74.
Chibili, M.N., 2017. Modern Hotel Operations Management.
Gerbl, M., McIvor, R., and Humphreys, P., 2016. Making the business process outsourcing
decision: why distance matters. International Journal of Operations & Production
Management, 36(9), pp.1037-1064.
Gunasekaran, A., Irani, Z., Choy, K.L., Filippi, L. and Papadopoulos, T., 2015. Performance
measures and metrics in outsourcing decisions: A review for research and
applications. International Journal of Production Economics, 161, pp.153-166.
Ibisworld.com 2018. Business Process Outsourcing Services (US) – Industry Report. [online]
Ibisworld.com. Available at: https://www.ibisworld.com/industry-trends/specialized-market-
research-reports/advisory-financial-services/outsourced-office-functions/business-process-
outsourcing-services.html [Accessed 25 Jan. 2018].
Kao, C.Y., Tsaur, S.H. and Wu, T.C.E., 2016. Organizational culture on customer delight in the
hospitality industry. International Journal of Hospitality Management, 56, pp.98-108.

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Kimes, S.E., 2016. The evolution of hotel revenue management. Journal of Revenue and Pricing
Management, 15(3-4), pp.247-251.
Koo, C., Gretzel, U., Hunter, W.C. and Chung, N., 2015. The role of IT in tourism. Asia Pacific
Journal of Information Systems, 25(1), pp.99-104.
Manhas, P.S. and Tukamushaba, E.K., 2015. Understanding service experience and its impact on
brand image in hospitality sector. International Journal of Hospitality Management, 45, pp.77-
87.
Mathe, K., Scott-Halsell, S. and Roseman, M., 2016. The role of customer orientation in the
relationship between manager communications and customer satisfaction. Journal of Hospitality
& Tourism Research, 40(2), pp.198-209.
Ritzcarlton.com 2018. Luxury Hotels & Resorts | The Ritz-Carlton. [online] The Ritz-Carlton.
Available at: http://www.ritzcarlton.com/ [Accessed 25 Jan. 2018].
Sharma, N., 2015. Hotel Revenue Management and Its advantages and Disadvantages to
Organization, its employees and customers. International Journal of Scientific and Research
Publications, p.531.
Turner, M.J., Way, S.A., Hodari, D. and Witteman, W., 2017. Hotel property performance: The
role of strategic management accounting. International Journal of Hospitality Management, 63,
pp.33-43.

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